Huawei Arm Server Shipments Bottom Out and Rebound, Doubling to

De-Americanization Effect Taking Hold? xFusion x86 Server Shipme

According to the latest forecasts from DataTrack, xFusion's x86 server shipments face significant headwinds in 2026. The estimated shipment volume for the third quarter of 2026 is only 75.0 K pcs (75,000 units), a decline of 3.8% from the previous quarter's 78.0 K pcs. When compared to the 90.0 K pcs in the same period of 2025, the decline reaches as high as 16.7%. This marks the fifth consecutive quarter of decline or sluggish performance for the company's x86 business since the short-term high of 110,000 units in the second quarter of 2025, forming a stark contrast to the historical peak of 140,000 units per quarter in 2022. Observing the detailed data, xFusion x86 shipments present a clear pattern of "quarter-by-quarter decline" in 2026: 85,000 units in the first quarter, 78,000 units in the second quarter, and 75,000 units in the third quarter. This demonstrates that the shrinkage in shipments is not a seasonal fluctuation but a structural downward trend. In contrast to the global server market, which continues to grow driven by AI (TrendForce estimates AI server growth exceeding 20% in 2026), xFusion's x86 product line is evidently under severe challenge, likely related to the crowding out of demand for traditional general-purpose servers. In-depth analysis of the causes identifies geopolitics and technological architecture transformation as the primary drivers. Digitimes points out that while the global server market continues to expand, the market share of x86 architecture is being eroded by ARM architecture (projected to reach 21% in 2025). For xFusion, formerly Huawei's server division, constraints from US chip bans, combined with the Chinese government's active promotion of "Xinchuang" (Information Technology Application Innovation) policies, are prompting an accelerated shift from Intel/AMD x86 architecture toward ARM-based domestic computing power (such as the Kunpeng/Ascend ecosystem). Furthermore, xFusion initiated IPO tutoring in January 2026, and the market generally believes its fundraising narrative will focus more on high-growth AI and liquid cooling solutions rather than the traditional x86 business. Looking ahead, in the short term (1-2 months), attention should be paid to changes in capital expenditure resulting from xFusion's IPO progress; although the funding aspect is positive, x86 shipments are unlikely to improve. In the medium to long term (3-6 months), as large cloud service providers (CSPs) slow down the refresh of general-purpose servers and concentrate capital on AI infrastructure, the proportion of xFusion's x86 business is expected to decline further. Investors should monitor whether the company's revenue structure can successfully leverage high-unit-price AI servers (including liquid cooling technology) to compensate for the gap caused by the loss of x86 shipment volume, which will be a key indicator of its transformation success. Related online search source references: https://www.digitimes.com/news/a20250121015.html https://www.businesstimes.com.sg/companies-markets/chinese-ai-server-leader-xfusion-hires-investment-bank-first-step-towards-listing https://www.taipeitimes.com/News/biz/archives/2025/11/18/2003826978