Compal Electronics president Martin Weng expects the company's server business to achieve double-digit percentage on-year growths in both 2019 and 2020 as the company has obtained orders from major enterprise server vendors.

In 2018, Compal's non-PC businesses contributed 30% of the company's revenues, while server, car-use electronics and Internet of Things (IoT) devices commanded 4-6%.

Compal did not provide any detail on its server clients, but some market watchers revealed that the orders are likely to be from Dell. At the moment, Over 70% of Dell's notebook orders are handled by Compal. In addition to enterprise models, Compal is also providing assembly services for Dell's Alienware gaming notebooks and desktops. Dell's server orders are expected to be processed at Compal's plants in Taiwan to avoid the US tariffs on China-imported products.

Currently, the main growth driver of the server industry is demand from cloud computing service providers and their orders have already been competed fiercely by major suppliers including Foxconn Electronics (Hon Hai Precision Industry), Quanta Computer, Wiwynn and Inventec with channel system integrators including Supermicro, Hive and ZT also aggressively looking to expand into the area.

At the moment, Compal is still primarily focusing on supplying servers to brand vendors.

And the need to invest resources into participating in different open source platforms - including OCP established by Facebook; Project Scorpio supported by Tencent, Alibaba and Baidu; Project Olympus launched by Microsoft; and Open19 introduced by LinkedIn - will also be a major challenge for Compal if it looks to further expand its server business, the market watchers noted.