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Year of writing: 2021
Author: Tony
Related stocks: Quanta (2382) , Wivy (6669) , Inventec (2356) , Mitac (3706) , Hon Hai (2317)
Data Center Data Cente r Part 4
The world's five largest server foundries PK in the same field
I have introduced many server supply chains. This article will focus on foundries. The foundries produce a dazzling array of products. From the largest iPhone foundry Hon Hai to the largest laptop foundry Quanta, many hardware products in the technology industry are now looking for OEMs assist in production, and servers are of course no exception. However, each OEM specializes in different areas. For example, Inventec is good at branded servers, Quanta is good at white-branded servers, and Wiviin is good at white-branded servers. Born. White-brand servers account for different proportions of the company as a whole. In an era when white-brand servers are growing and brand-name servers are shrinking, one needs to pay attention to the rapid growth of white-brand servers. The proportion of overall revenue, otherwise, other products such as laptops, mobile phones, smart wearable devices, smart audio and even future electric vehicles will dominate the company’s future even more. Below are the proportions and comparison charts of several major EMS factories, and I will introduce them one by one.
1. Quanta Quanta (2382)
Quanta is the world’s largest notebook foundry, and it has a market share of more than 70% of Chromebook foundries. However, these Quanta’s main sources of revenue are the reason for the low gross profit margin of the third to fourth gross, so the development is high Maori white-label servers have also become one of Quanta's important strategies. In the company, "BU9" and "Yunda" are responsible for the white-label server business, producing and designing data centers with powerful computing performance for global customers. Its customers include first-tier manufacturers Facebook, Microsoft, Google, Amazon and many second-tier customers With unicorn companies, they have won more than half of the orders from Google and Facebook among the first-tier factories, and even joined with Lotte Telecom to enter the difficult-to-enter telecom equipment market, establish the first cloud data center telecom equipment, and create more possibilities in the future Compared with other competitors, Quanta's cloud business customers are more scattered, so it can also effectively reduce the impact of industry cycle fluctuations, and it can be regarded as a white-brand server index company.
Quanta Chairman Lin Baili described it as an airplane in his speech. 5G is the engine and the key to driving the operation of the entire industry; AI is driving and mastering the overall direction; the cloud is the aircraft itself, because all this will happen on the cloud , The service is carried by the cloud; IoT is the passenger and the main source of payment. The Internet of Things will become the main application. These innovative applications will bring considerable revenue to the overall industry. The picture below simply links this In the past few years, the relationship between the most compacted industries.
Quanta 5G + AIOT + Cloud strategy (taken from speech fragment)
2. Wiwynn (6669)
Wivy, as a subsidiary of Wistron Group, enjoys the parent company's huge production and order-taking capabilities. It has captured the three largest cloud customers including Facebook, Microsoft, and Amazon, which has gradually increased its shipment ratio. However, the distribution of customers is relatively concentrated. It is very important for Ying to grab other customers. Despite this, Wisdom is still the second largest server manufacturer in the world, with a market share of approximately 30% of the white-brand server shipments, and it is also the only source of 100% of its revenue. Data center companies can be regarded as pure data center equipment vendors. In the era of rapid growth of cloud data centers, Wisdom will be able to grow at a synchronized or even faster rate. From a financial point of view, Wivy’s gross profit margin is about 7-9%, which is already higher than other foundries by about 3 percentages and nearly half higher. This shows the high gross profit of white-brand servers, and Wivy’s remaining financial performance is also extremely high. Excellent The ROE in 2019 is as high as 40%, and it is a very profitable company.
3. Inventec (2356)
Mainly focusing on brand servers, it is the foundry for HP and Dell. It is also the world's largest brand server foundry. Its shipments are also among the best. 65% of the company's server business is branded servers. Unfortunately, it is the brand in recent years. The weakening of server demand has caused Inventec’s server business to grow less than other competitors. White-label servers account for only 12.3% of the company’s overall company. Recently, it has gradually moved towards white-label servers. Transferring the honed design ability to the white-label server should speed up the development time, and the company should speed up the pace of entering the white-label server, otherwise the gap with the competition will gradually widen.
4. MiTAC (3706)
MiTAC’s Shenyun Technology focuses on server-related businesses, and also allows MiTAC to have a very high proportion of its revenue from servers. Currently, about 75% of its revenue is expected to increase to 80% in the next one or two years, of which 50% will come from white-branded servers. The other 50% comes from branded servers. In terms of branded servers, Mitac has a large customer for the wave of China’s largest server brand, which has also allowed Mitac to become a first-line server foundry in recent years; , Mitac only manages companies such as Microsoft and Oracle that also ship first-tier products, but because the scale is not as large as that of other competitors, the white-label server still mainly aims to obtain orders from second-tier cloud suppliers in the short term.
Five, Hon Hai Foxconn (2317)
Hon Hai’s customers come from all directions, and the products are even more dazzling. The main foundry products include iphone, Sony game consoles and future automotive electronics. Although Hon Hai with a large business has a relatively low server revenue, it is more expensive if you look at the amount. It should not be underestimated. Among the servers, branded servers are still the main ones. Customers include Dell, HP, etc., and recently, the business of cloud data centers has gradually expanded. Customers include Microsoft, Amazon, etc. With a huge supply chain ecosystem, Hon Hai has established a strong connection with servers, including its own Industrial Fortune Union and Hong Bai’s independent research and development of cloud servers. These will strengthen Hon Hai’s future tools for improving data center business, but it is a pity that it continues to divide The demolition caused the parent company's share price to be relatively weak.
The above five companies have formed a strong server cluster in Taiwan, allowing peripheral components to flourish. These companies have accounted for more than 40% of global server orders, and have obtained more than 80% of the cloud from Amazon, Microsoft, Google, and Facebook. The server order also forms another sacred mountain for Taiwan to protect the country.