Meg Whitman, CEO of HPE
Andrew Burton—Getty Images

But cheap server makers from Taiwan are booming.

By Jonathan Vanian
June 7, 2017

Big companies that produce data center servers are having a tough time these days.

First quarter server sales dropped 4.6% from the same period a year earlier to $11.8 billion, according to the International Data Corporation.

The research group said this week that big Internet companies like Facebook fb , Google goog , and Amazon amzn are delaying buying new servers until Intel debuts a new version of its data center chips. Because these tech giants are the biggest buyers of data center hardware, the server market rises and falls based on their spending.

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Additionally, some of these tech companies like Google, Amazon, and Microsoft are also selling computing resources on demand to business customers. The switch by their customers from operating their own data centers to instead renting computing capacity with third-party companies has also contributed to the overall decline in server sales.

Hewlett Packard Enterprise hpe was the top supplier of servers in the first quarter, but its sales declined nearly 16% from the same period a year earlier to $2.9 billion. IDC did not say why HPE’s sales dropped so steeply, but it’s likely at least partly due to Microsoft reportedly buying fewer HPE servers than before.

Last week, HPE CEO Meg Whitman made a vague reference to this problem in mentioning a major customer that she said was unlikely to buy more HPE servers in the near future. She didn’t identify the customer.

Whitman also said that HPE is re-evaluating whether it wants to continue investing in its existing server business for giant cloud computing companies or focus specifically on making powerful servers and storage gear for more conventional companies, a more profitable business.

Dell, the world’s No. 2 server maker, had $2.4 billion in server sales during the first quarter, a nearly 5% increase from the same period a year earlier. IDC did not say why Dell’s server sales increased, but it’s likely a consequence of Dell inheriting EMC’s data center business after buying the company for $67 billion in 2016.

Cisco csco , the number three company on the IDC list, also saw server sales drop 3% year-over-year in the first quarter to $824 million.

But the server market wasn’t grim for every manufacturer.

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IDC said that so-called original design manufacturers recorded $1.2 billion dollars in server sales, a whopping 42% year-over-year increase. IDC does not identify these server makers, but they are likely to include Taiwanese manufacturers like Quanta and Winstron, which build servers for other companies.

In recent years, big web companies like Facebook and Microsoft have increasingly designed their own server gear and then contracted their manufacturing to Taiwanese companies. Several companies have been sharing their data center designs with each other as part of the Facebook-led Open Compute Project, a non-profit group consisting of businesses like Microsoft and Goldman Sachs. This organization is hoping to create more efficient servers that can be built in bulk and sold more cheaply by contract manufacturers than big name brand companies like HPE.

China e-commerce giant Alibaba Group is the latest member of the Open Compute Project, the non-profit said Wednesday.

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