The Company
Super Micro Computer, Inc. (Supermicro) is a U.S.–based provider of high-performance, energy-efficient server and storage systems, management software, and integrated solutions optimized for enterprise data centers, cloud, AI, 5G, and edge computing. Founded in 1993 and headquartered in San Jose, it designs, manufactures, and sells server hardware and complete IT infrastructure solutions globally.
Financials
Bear Thesis
- Management has failed to hit it’s own revenue projections at a time when data server market is booming.
- Most of the revenue is pass through to expensive underlying components like Nvidia chips. Very low margin business.
TAM / CAGR
- The overall global server market is estimated to grow at a mid‑20%’s CAGR (~23%) 2023–2027.
- AI data‑center and liquid‑cool server segments are high growth, as enterprise and hyperscale cloud adoption accelerates. While company‑specific TAM figures are not public, Supermicro plays directly into the multi‑billion dollar high‑performance server and AI infrastructure markets.
Products
| Product / Service | Approx. % of Revenue |
|---|---|
| Server & storage systems (complete rack/data‑center builds) | ~97% |
| Subsystems & accessories (motherboards, subsystems, parts) | ~3% |
Core revenue comes from full server and storage deployments, while subsystems and accessories make up a small remainder.
Business Model
Supermicro operates a vertically integrated design-and-manufacture model: designs hardware (servers/racks) in-house, sources components (e.g. Nvidia GPUs, AMD/Intel CPUs), assembles and ships systems at scale. Clients include hyperscalers, enterprises, telecoms, and AI startups. The company offers direct sales and channel partnerships across global markets.
Revenue is primarily from hardware and complete system builds, with growing emphasis on selling liquid-cooled AI optimised rack solutions and Data Center Building Block Solutions (DCBBS).
Customers
Major customers include AI-focused data center clients like xAI (Elon Musk’s company), Tesla, and other hyperscale or cloud operators. In its recent quarter, two core customers accounted for ~58–64% of revenue.
Competitors
Top three competitors with products directly competing with Supermicro:
- Dell Technologies – provides enterprise servers, AI racks, GPU‑accelerated infrastructure.
- Hewlett Packard Enterprise (HPE) – sells AI and HPC servers, liquid cooling, integrated systems.
- Lenovo – offers high-performance servers and AI infrastructure solutions in enterprise and hyperscale markets.
Founding History
Supermicro was founded in 1993 by Charles Liang and his wife Sara (Chiu‑Chu) Liu. Starting as a small five-person operation, Liang brought experience from motherboard design. The company quickly expanded into Europe via partnership in its first year and grew to become a major global server provider, eventually building manufacturing sites in Silicon Valley, Taiwan, and the Netherlands
Invest Alpha 