Japanese media said that in the context of the growth of telecommuting and home economy, the major IT companies have to seize the Japanese domestic server market action.

The Japanese business daily reported on May 5 that a Chinese company, the world's third-largest by market share, has entered the Japanese market. With data traffic up to 50% higher than before the covid-19 outbreak, it is imperative to scale up servers to support communications and data computing. Other foreign companies are starting to invest more, and Japanese companies with a higher market share are catching up. The dynamics of Japan's 500 billion yen domestic market could change.

China's server giant inspur group has set up a local legal entity in Japan, the report said. The first 1 billion yen investment will be used to build office space and a marketing system to sell ai servers capable of high-speed computing in Japan. The target audience will include data center operators, game developers and other in-house research institutes.

According to IDC, inspur group's market share reached 8.7 percent in 2019, ranking third in the world after dell and wisdom of the United States. Founded in the 1960s, inspur has grown rapidly in the past decade as companies like Chinese Internet giants alibaba and tencent have adopted inspur's servers.

In the field of AI servers with similar capabilities, inspur's products are more than 20 percent cheaper than those of competing U.S. companies, according to the company's Japanese legal representative.

90% of inspur's sales come from the domestic Chinese market, but in recent years it has been working on joint research and development with customers such as Microsoft of the us. Inspur aims to become the world's largest server seller by March 2023, with foreign markets accounting for 15% of total sales, up from 5% now. In the United States, inspur has been expanding its business by sourcing key components from Intel and nvidia for local assembly. Japan is also now an important market for the company.

In the context of the increasingly commoditized servers themselves, server manufacturers are also working to develop products with special specifications for large customers. In the Japanese market, the servers on the market are mainly nvidia's high-performance products equipped with image processors (gpus).

With the spread of faster 5G networks and higher resolution 4K and 8K, data transfers around the world will soar. Covid-19 has forced people to stay at home and Internet usage is much higher than before.

Data traffic for fibre-optic Internet access services provided by NTT east Japan and NTT west Japan is also increasing during the daytime of the working day. During the week beginning April 20, traffic increased by as much as 50 percent during the working day compared with late February, when the outbreak was less severe.

Foreign companies operating data centres are also stepping up their offensive. Amazon plans to build an AWS cloud service data center in Osaka in 2021, so that web users in the kansai region will be able to enjoy the service without delay.

Digital Realty Trust and Equinix, us data centre operators, are also investing more in Japan. According to IDC, the total floor space of domestic data centers will grow at an average annual rate of 4.6% until 2024, and the boom in new large-scale facilities will continue.

According to IDC, domestic server shipments in Japan reached 515.6 billion yen in 2019. Although Japan's embattled companies have yet to move to expand capacity, demand is growing. Japanese companies have been characterized not only by their generosity in system maintenance, but also by their ability to reduce the power consumption of their products using technologies learned in the development of supercomputers.

Competition between U.S. and Chinese companies and Japanese companies in the server sector is expected to intensify in the future.