Cloud Revenue Differs Greatly Between Search and IaaS as 2Q20 results Affirm 650 Group Forecast Projections

Over the next five days, we will highlight each of the US Hyperscalers and the results they had during 1H20 and 2Q20. Today we will start with the overall trends in the market. US Hyperscaler revenue grew 20% in 2Q20 compared to a year ago, setting a new record.

US trade war activities, mainly against Huawei, caused significant lead time increases in many critical components for Cloud data center build-outs during the quarter as the 5G battle against China is having ripple effects into the Cloud supply chain. Custom ASIC and semi-custom ASIC development in the Cloud continue to expand with multiple new initiates around #AI #ML., #SmartNICs, accelerators, and #CPUs underway. This is not to mention Amazon Web Services (AWS) getting into #6G with a $10B investment in project #Kuiper for low earth satellites in direct competition with @SpaceX Starlink. There are over 50 custom ASIC projects in the Cloud. Each one has implications on the supply chain and immediate potential to shift market share from each Cloud provider.

Our overall projections for data center spend in switching, servers, and storage remain relatively unchanged since our previous forecast. Current results affirm our forecasts as we shift to vendor performance over the next two weeks, which we expect to be dependent on each company’s vertical and enterprise exposure.