Enjoy complimentary customisation on priority with our Enterprise License!
The Global Data Center Chip Market size is estimated to grow at a CAGR of 3.53% between 2022 and 2027. The market size is forecast to increase by USD 2,893.67 million. The growth of the market depends on several factors, including the advancements in chip technology, the growth of cloud computing, and government regulations regarding the localization of data centers.
This data center chip market report extensively covers market segmentation by product (GPUs, ASICs, CPUs, and FPGAs), business segment (small and medium, and large), and geography (North America, APAC, Europe, South America, and Middle East and Africa).
To learn more about this report, View Report Sample
Advancements in chip technology are key factors driving the growth of the global data center chip market. The processing technology is dynamic in nature, and companies can upgrade to a dynamic environment. Next-generation chips such as ASICs and FPGAs will help improve the performance of connected devices and data centers. Such chips can efficiently respond to the changing demands of the data center, accelerate the performance of other applications, and improve the overall performance of the data center.
Arm Ltd has released a next-generation technology aimed at taking over data centers and artificial intelligence applications. The company has released a new version of the instruction set architecture. Similarly, in March 2021, Advanced Micro Devices Inc. launched a data center chip named Milan to compete with Intel in the market. Thus, advancements in chip technology are expected to drive the growth of the market during the forecast period.
Increasing investments in AI startups is a primary trend shaping the global data center chip market. AI technology is in the development stage, and its implementation is rapidly increasing in many industries. Therefore, several companies are entering the AI chip market to take advantage of the growing demand for AI technology. According to Technavio, about 70%-75% of companies are expected to adopt some form of AI technology within the next 20 years. Over the past five years, several startups have entered the AI space.
Due to the huge potential of the AI chipset market, several startups have been receiving significant investments from venture capitalists and major chip manufacturers for the development of AI platforms and chipsets. For instance, in May 2021, a Shanghai-based startup, Innostar Semiconductor, raised USD 100 million funding in a pre-series A round of funding, which was led by Shanghai Lianhe Investment and joined by New Alliance as well as new investors Atlas Capital and KQ Capital. The company will use the funding for the development of storage and resistive RAM chips. Thus, increasing investments in AI startups are expected to fuel the growth of the market during the forecast period.
Focus on data center consolidation is a major challenge to the growth of the global data center chip market. Many companies are focused on reducing the size of their data center facilities. Infrastructure as a Service (IaaS) is a key concept where multiple companies use consolidated data centers. The strong adoption of IaaS has led to data center consolidation. The main reason for consolidating data centers is the need to reduce operating costs. Several software companies are adopting common cloud platforms, thereby reducing the need for separate data centers. The move to server virtualization can be seen in many prominent market players involved in data center services.
The increase in the adoption of data center virtualization leads to the consolidation of data centers and reduces the total number of data centers used by an organization. This hinders the sales of data center chips and reduces the footprint of data centers worldwide. However, the consolidation of facilities requires expertise as well as time. It also involves high risks. This can become a major challenge for the growth of the market during the forecast period.
The market share growth by the GPUs segment will be significant during the forecast period. GPUs handle graphics efficiently and offload some of the workloads of CPUs, with the aim of increasing the efficiency of computing. They are the primary processing units in AI systems and are used in both training and inference processes. The data-intensive, multicore characteristics of GPUs in machine learning require a high memory bandwidth to feed the processing cores with data.
Get a glance at the market contribution of various segments View Free PDF Sample
The GPUs segment was valued at USD 4,526.87 million in 2017 and continued to grow until 2021. Vendors are investing in developing powerful GPUs with machine learning capabilities. For instance, in April 2021, NVIDIA introduced a new class of NVIDIA-Certified Systems, which brings AI to organizations that run their applications on industry-standard enterprise data center infrastructure. The company announced the expansion of the NVIDIA-Certified servers ecosystem, which will provide new opportunities for systems that feature the NVIDIA A30 GPU for AI and data analytics and the NVIDIA A10 GPU for AI-enabled graphics, virtual workstations, and mixed computing. These factors will drive the growth of the segment during the forecast period.
Based on the business segment, the small segment is estimated to hold the largest market share. When compared with large data centers, small and medium-sized data centers are smaller but have much higher reliability standards for the same underlying device. Small and medium data centers are more dependent on the reliability of the device, while large data centers require a lot of redundant configuration. In addition to having higher reliability standards, infrastructure for small and medium-sized data centers must be able to keep up with this demand and be continuously upgraded while growing. Such factors are driving the demand for data center chips in small and medium data centers. It helps to improve operations and increase productivity while enhancing energy efficiencies, redundancy, and flexibility. Thus, a growing number of small and medium data centers is expected to drive the growth of the small and medium segment for the data center chip market.
For more insights on the market share of various regions Download PDF Sample now!
APAC is estimated to contribute 50% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The demand for data center chips will increase in North America owing to higher investments by hyperscale cloud providers, colocation service providers, and enterprises, which are upgrading their IT infrastructure to support edge computing, 5G, multi-cloud services, big data analytics, and the IoT. The US is the data center hub in North America. The country has witnessed substantial investments in the field of cloud computing, and the adoption of data centers has increased in the past few years. The data center chip market in Canada is also registering growth owing to the rising demand from colocation providers and cloud service providers. These factors will drive the growth of the market in North America during the forecast period.
The rapid spread of COVID-19 impacted the economy of the region, especially the US. However, the lockdown restrictions were lifted in the second half of 2020 owing to large-scale vaccination drives across North America. In addition, rising investments in 5G networks will address the demand for high bandwidth significantly during the forecast period. This will make it easier to transmit large volumes of cellular data and provide high-growth opportunities for edge computing applications. As 5G will help reduce latency, companies will use 5G networks to expand their network edge and move data more efficiently. This will drive the growth of the data center chip market in North America during the forecast period.
The Data Center Chip Market industry report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Data Center Chip Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Huawei- The company offers folding cartons such as standard folding boxes, hybrid packaging cartons, enhanced packaging cartons, and multipack cartons.
Latticesemi- The company offers folding cartons such as custom medical boxes, custom food boxes, custom retail boxes, and custom beverage boxes.
Microchip- The company offers folding cartons such as custom sized boxes with corrugated fanfold.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The data center chip market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
|
Data Center Chip Market Scope |
|
|
Report Coverage |
Details |
|
Page number |
174 |
|
Base year |
2022 |
|
Historic period |
2017-2021 |
|
Forecast period |
2023-2027 |
|
Growth momentum & CAGR |
Accelerate at a CAGR of 3.53% |
|
Market growth 2023-2027 |
USD 2,893.67 million |
|
Market structure |
Fragmented |
|
YoY growth 2022-2023(%) |
2.3 |
|
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
|
Performing market contribution |
APAC at 50% |
|
Key countries |
US, China, Taiwan, UK, and Germany |
|
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
|
Key companies profiled |
Achronix Semiconductor Corp., Advanced Micro Devices Inc., Alphabet Inc., Broadcom Inc., Fujitsu Ltd., GlobalFoundaries US Inc., Graphcore Ltd., Gyrfalcon Technology Inc., Huawei Technologies Co. Ltd., Intel Corp., Lattice Semiconductor Corp., Marvell Technology Inc., Microchip Technology Inc., Micron Technology Inc., NVIDIA Corp., Qualcomm Inc., SambaNova Systems Inc., Samsung Electronics Co. Ltd., Taiwan Semiconductor Manufacturing Co. Ltd., and Arm Ltd. |
|
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
|
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Product
7 Market Segmentation by Business Segment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
Certified ISO 9001 : 2015
We are ISO 9001:2015 recognized that ensures quality services and product delivery to our clients.
We are GDPR and CCPA compliant! Your transaction & personal information is protected from unauthorized use.
Get lifetime access to our
Technavio Insights
Get the report (PDF) sent to your email within minutes.
