Who is more hurt by Intel’s “break of supply”?

Just as the people reversed the “true and false advertising contracts” for Tencent and Laoganma, and then reversed eating, a major event in the To B industry was quietly causing shocks. Recently, a number of foreign media have disclosed that the US “Export Management Regulations” have been upgraded, and the members of the entity list companies are constantly adjusting.

Affected by this, Inspur Group became another “giant” enterprise after Huawei’s cessation of supply. It is understood that Intel suspended the export wave at 11:59 on June 29. Unless authorized, Intel products are not subject to the “Export Management Regulations”, or the US Department of Commerce determines that Inspur Group is not subject to this requirement.

In this regard, Intel clarified to Geek Park (ID: geekpark) that it was only a temporary suspension, not a supply cut. “Intel needs to make some corresponding adjustments to our supply chain in accordance with relevant US laws, so we have to temporarily suspend supply to this customer. This temporary suspension is expected to be within two weeks, when we will resume this customer Supply.”

Industry insiders then told Geek Park that some media set the matter as a “wave of supply cut” with the wrong rhythm, which can be said to be “supply suspension”. Inspur Group told Geek Park that the company is currently operating normally, but Inspur information declined to comment.

One is the world’s largest PC and cloud service X86 architecture CPU supplier, and the other is the largest domestic server manufacturer. The development of the two will have a greater impact on the entire cloud computing supply chain, as well as the industrial chain and digital enterprises. It will also receive continuous attention from industry insiders.

After the gunshot, there is no winner

In fact, the restrictions from the 5G communications field to the server, high-performance computing field have traces. In mid-June, including the “Wall Street Journal” and other media disclosed that the development of the matter is one step further. The US Department of Commerce has aimed to enter the field of high-performance computing. Five companies such as Zhongke Shuguang have been “blackened”. At the same time, The export of chip manufacturers such as Intel, NVIDIA and AMD will be regulated.

Therefore, this time, Inspur Group, as the largest server manufacturer in China, has become a new “off supply” manufacturer, which is expected.

Perhaps, many people do not know much about the business composition of Inspur and Intel’s two B-end giants. There are many business segments under Inspur Group, Inspur Information, Inspur Software, Inspur Cloud (ERP Cloud, HCM Cloud, Government Cloud, Digital Central Office, Data Center), etc., and this server belongs to Inspur Information’s business.

Although, in the past two years, Inspur has been constantly transforming its management software, ERP cloud, data center and other fields, and related products have been introduced, but Inspur Information is still the “absolute main force” of Inspur Group’s revenue. In 2019, server product components account for Inspur Information. The total revenue is even as high as 99.51%. Inspur Information has also received considerable attention from the capital market due to the rise of concepts such as 5G, new infrastructure, and edge computing.

Inspur information product line includes four categories: general server, storage, key application host, and AI meta-brain system. For example, according to the detailed understanding of the differences in product foundation, it is roughly divided into X86 servers, AI servers (GPUs, FPGA servers, etc.), non-X86 servers, and professional storage.

In recent years, Inspur General Server has been ranked first in China, second to Dell and HPE, and third in the world. Among them, the most shipped servers are X86 servers. In terms of AI servers, revenue is inferior to general servers, but it also ranks first in China.

At the beginning of this year, the person in charge of Inspur once vividly made an analogy. One out of every three servers installed in China is from Inspur, and one out of every two AI servers in operation is manufactured by Inspur. It can be seen that whether it is a server or an AI server, Inspur is in the “leading” position in the domestic market.

Looking at Intel’s main business, there are two main parts, the client computing business unit and the data center business unit. In layman’s terms, the PC side provides CPU services, and the cloud computing and data center areas provide X86 architecture CPU services.

As we all know, Intel has been making unsatisfactory progress in the mobile communications market. In the early 3G era, it was wrong to bet on WiMAX technology, and the 5G era retreated from the baseband chip market. Recently, the PC market has also started to lose ground, and Apple turned to the ARM architecture, which has severely set back Intel’s business.

5G Internet of Everything, massive data concurrent, many chip manufacturers have seen the potential of cloud computing and data centers. Undoubtedly, the future data center business is the top priority of Intel’s strategy.

Intel is the largest supplier of Inspur, accounting for more than 30%, and Inspur is one of Intel’s largest customers. The changes in the business of the two have a two-way impact on the performance of both parties, and they are “barometers” of each other. Qin An, director of the China Cyberspace Strategy Research Institute, told Geek Park that “chips are irreplaceable.”

At present, although the export is temporary, Intel is making emergency adjustments to the supply chain according to regulations, but no one can guarantee that things will not go to the worst step. If Intel’s export restrictions take shape, it means that the wave of the core business server chip supply chain is blocked, and Intel’s data center strategic business revenue has lost an important source.

What is the impact of the cloud computing industry?

In addition, cloud computing and data centers as servers and chips downstream industries will also be affected. A considerable part of domestic cloud computing vendors, such as Alibaba Cloud and Baidu Cloud, come from Inspur. For AI servers, relevant data shows that more than 90% of cloud service providers such as Alibaba Cloud, Baidu Cloud and Tencent Cloud come from Inspur.

A third-party independent cloud computing vendor staff told Geek Park, “The supply cut off will definitely have an impact on cloud service providers. However, because we are an upstream company after all, we have a wide range of options. The impact on us It may be the impact of cost. Server shipments are generally smaller than before, and server costs may increase.”

However, Duan Meng, senior analyst at IDC China, is more optimistic. “Mainstream domestic OEM server manufacturers and ODM server manufacturers are the main suppliers of domestic cloud computing vendors. If a certain supplier is affected by uncertainties, domestic cloud computing Manufacturers have the ability to flexibly adjust their supply chain in the short term to balance the stable demand for servers.

IDC believes that the impact on domestic cloud computing vendors will be relatively small. Among the cloud computing vendors, Huawei Cloud and Inspur Cloud can independently provide servers due to the group’s own server business. Other cloud computing vendors purchase from server vendors. “

It is understood that the domestic cloud computing vendors Alibaba, Tencent, Baidu, and third-party independent cloud computing vendors server composition is roughly divided into two channels, one is a self-developed server, OEM production, and the other is with Inspur, etc. Server manufacturers cooperate to provide customized services based on demand.

Although, if Inspur’s supply is cut off, cloud computing vendors can produce servers through OEMs, OEM servers, or purchase servers from foreign manufacturers, but Inspur servers have obvious advantages in comparison.

“Inspur servers are relatively cheaper. The second is better services. In the third aspect, Inspur has done customization earlier. These advantages are the reasons why cloud service providers choose Inspur.” The aforementioned third-party independent cloud computing Manufacturer staff said to Geek Park.

In addition, in terms of AI servers, in recent years, including Amazon AWS, Google, Alibaba Cloud, Huawei Cloud, etc. have researched AI cloud chips, but they are mainly focused on cloud inference, as well as some specific scenarios of business, and a large number of scenarios. It still needs the supply support of AI server manufacturers, especially GPU-type AI servers.

IDC China Senior Analyst Duan Meng also believes, “At present, the demand for AI servers is growing very fast, and cloud computing vendors still need a lot of supply.”

A company’s supply cuts often cause a chain reaction. Under the butterfly effect, any industry chain company cannot be alone. Looking for certainty under uncertainty may be a major strategic “proposition” for some companies in the future.

Andrew Beck

Andrew Beck is a 28-year-old writer who enjoys playing football and reading books. He is smart and creative, but can also be very sneaky and a bit lazy.

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