China ODM Direct Server Shipments Stagnate After Halving, High A

ZTE Server Shipments Plunge 28% in Q3; AI Transformation and Ten

Core Overview: Significant Correction After High Base, Shipments Fall Below the 50,000 Mark According to the latest data from DataTrack, ZTE's domestic server shipments in China for Q3 2025 were 43,000 units, a significant decline of 28.3% from the historical peak of 60,000 units in the previous quarter, and also lower than the 49,000 units in the same period last year (a year-on-year decrease of 12.2%). Reviewing the trajectory of the past three years, ZTE's shipments typically peak in Q2 (benefiting from mid-year settlement deliveries by telecom operators), after which Q3 enters a period of inventory digestion. However, the decline in this Q3 (-17,000 units) was far greater than past seasonal fluctuations, indicating that in addition to traditional off-season factors, the market product structure may be undergoing a qualitative change. Key Details: Operator Tender Deliveries and Product Mix Changes There are two key drivers behind the data fluctuations. First is the seasonal delivery of telecom tenders. ZTE secured high shares in the 2024-2025 centralized server procurement projects of China Mobile and China Telecom (ranking first in some tenders). These large-scale orders were mostly awarded in the first half of the year and intensively delivered in Q2, resulting in a high base. Second is the "qualitative change" in product mix. Market information indicates that revenue from ZTE's "Second Curve" business (computing power products) grew by up to 180% year-on-year in the first three quarters of 2025, yet shipment volumes declined. This implies a reduction in the proportion of low-unit-price commodity servers, while the share of AI training and inference servers—which have extremely high unit prices but smaller shipment volumes—has significantly increased. Deep Attribution: "Volume Contraction with Price Increase" Under AI Transformation Strategy Addressing this phenomenon, market analysis points out that ZTE is actively executing a "Connectivity + Computing Power" strategic transformation. According to IDC and relevant financial report analyses, although the global and Chinese server markets showed strong revenue growth in Q3 2025 (driven by AI, global server revenue increased by 61% year-on-year), demand for commodity servers was relatively flat. ZTE is sacrificing some market share in low-margin traditional servers to focus on extremely high-unit-price AI servers (such as intelligent computing products equipped with domestic chips or high-end GPUs). Although this strategy leads to a decrease in headline shipment volumes (Units), it supports the optimization of revenue and profit structures, aligning with the company's long-term goal of moving beyond its role as a pure telecom equipment vendor. Outlook and Risks: Short-term Inventory Adjustment, Mid-term Focus on AI Inference Demand Short-term (1-2 months): It is expected that Q4 shipments will fluctuate within the range of 45,000-50,000 units. With end-of-year budget settlements in the government and enterprise sectors, some non-telecom orders are expected to return, but it will be difficult to replicate the peak of 60,000 units seen in Q2. Mid-term (3-6 months): The focus will shift to the construction progress of intelligent computing centers under China's "Eastern Data, Western Computing" project and inference demand driven by models such as DeepSeek. The risk lies in supply chain stability; if the supply of high-end chips is obstructed, it could affect the delivery of high-margin AI servers, thereby dealing a double blow to revenue. Web Search References https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGhbxOFu_fYxBK3uEo3tI-N_JwdfVTUdel9UDLvO61ZnUjYLWiJc2FM7zBqtr49kxWFDlhS2o9WRtoUSMm0gBm7yeA6uQoUNVF1LD8Uv1fVgD4h3n_bwsLrR587uF7AmZ9DaX35nAbb63-AxVBDgDbEx2Pbbi5EqSoRYAigLuTJVPQA_R0UNArGIZLHXGcXMkDNsYsgjDH6wMyoIAKSOD1BWmenuLyLopnAAMCXkpHOepZRa_sjII0RojeryOKaciYFSPgKgvwZ1e4G4ihXgGnF0Awfag== https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQEtIl83rm10IOeVwGNZn9NyHoccm0g32m-L37DnTpFALkpvx6E6LQjYECzU5-LRxuwtGSaEVBnF8QOocgYkI2LfwxqZlxAk5zEHB9xt7hjmAKinnrLjclsVha9gWbmgjcQu5Slz8Nnkr-PPMpDWCDkQpDfOqJhD7DL9sdNB-oKRT7dkoCv76k0qKzmB9h6jn52wbk0nyRVqxbQ2C_tEiqoDow4gJ3Upeg== https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHsmh7CqeFNOP51DdNW6vk1GQ5Or1me48b9DkfCBTxS8Nhy_fduwZLsV-cNUY5W7pqZ34avPcNC7UMCVeHVdMjZWR7kU1L0GAnKlxf5ld3zuchyjy-cHX2l1kMrpWtDCWFbDKliDr30DTWnE_OY31B0xcytp22nM_4NQ3GyX-Ev89dj3Q3PRO9VED1WB3Q=