The server market is sliding into the doledrums just like the consumer PC market, according to beancounters.
Apurva Patel, a financial analyst at Ticonderoga Securities, said that in the short term weak PC trends and server-related customer consolidation could lead to weak server orders. Punters are a little uncertain about current server suppliers' existing and future product road maps and are not buying.
Top PC and chip makers so far have highlighted weakness in the home PC market, but not looked at the server market. The fear is that OEMs could tighten up supply if the market slows down too much and this will reduce the chip demand. In response to reduced demand from server makers, chip makers may also try to cut down on inventory.
Intel and AMD have both lowered revenue expectations for the third fiscal quarter on weak PC demand in mature markets. Apparently AMD is sitting on shedloads of its 12-core Magny Cours chips and has failed to make a dent into Intel's offerings. AMD is due to release new 8- and 16-core chips based on the Bulldozer architecture, which could reach servers early next year.