Datacenter Chip Market Size was estimated at 13.14 (USD Billion) in 2023. The Datacenter Chip Market Industry is expected to grow from 14.75 (USD Billion) in 2024 to 36.14 (USD Billion) by 2032. The Datacenter Chip Market CAGR (growth rate) is expected to be around 11.9% during the forecast period (2024 - 2032).
Driving the Datacenter Chip Market is the increasing need for cloud computing, artificial intelligence (AI), and machine learning (ML). More powerful and efficient datacenter chips are required by businesses that adopt these technologies to support data-intensive workloads.
The other trend in the data center chip market is shifting towards cloud-based services. In order to cut costs and be flexible, organizations move their IT infrastructure to the cloud. Therefore, there is an increase in demand for datacenter chips that can handle high-performance computing and data processing needs of applications that are based on clouds.
In addition, AI as well as ML have been increasingly adopted in the field of datacenter chip market. Such technologies enable a chip in a datacentre to learn from the available information, thereby making predictions that enhance its efficiency. It is expected that this demand will rise since artificial intelligence and machine learning are becoming widespread.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Data generation and consumption have increased data center demand to a very high level. As more data is being produced, businesses and organizations need stronger and more efficient data centers. This growth in the number of chips used in data centers has become one of the latest trends. One of the things that drive this trend is the adoption of cloud computing and big data analytics, which are becoming popular among many people globally. Cloud computing is critical for business continuity; thus, it enables organizations to use computing resources on a “pay-as-you-go” model without having to own or operate their own data centers.
Worldwide cloud service providers are either constructing or have already built massive-scale datacenters, which, over time, could represent a significant portion of the market. The concept of big Data Analytics deals with processing enormous amounts of data so as to obtain useful insights from them.
Using these powerful computers creates the need for datacenter chips. In addition, the increased need for larger datacenters is expected to persist in the foreseeable future because of a consistent increase in the volume of information produced by people and seen or acted upon by organizations.
The datacenter chip market is also being driven by advancements in chip technology. The development of new chip technologies, such as artificial intelligence (AI) and machine learning (ML), is enabling data centers to become more efficient and powerful. AI and ML algorithms can be used to optimize data center operations, such as power consumption and cooling. They can also be used to improve the performance of data center applications, such as databases and web servers. The development of new chip technologies is expected to continue in the coming years as researchers and engineers work to improve the performance and efficiency of data center chips. This is expected to drive the growth of the datacenter chip market in the long term.
Government initiatives are also playing a role in the growth of the datacenter chip market. Governments around the world are investing in the development of data centers and cloud computing infrastructure. This is being done to support the growing demand for data storage and processing. In addition, governments are also providing incentives to businesses to invest in data center chips. For example, the U.S. government has implemented a tax credit for businesses that invest in data center equipment. This tax credit is expected to drive the growth of the datacenter chip market in the United States. Government initiatives are expected to continue to play a role in the growth of the datacenter chip market in the coming years.
The Datacenter Chip Market is segmented by Chip Architecture into x86, ARM, and Power. Among these, the x86 architecture dominated the market in 2023, accounting for over 75% of the Datacenter Chip Market revenue. The x86 architecture's dominance is primarily driven by its compatibility with a wide range of operating systems and applications, making it the preferred choice for enterprise and cloud computing environments. However, the ARM architecture is gaining traction due to its lower power consumption and cost-effectiveness and is expected to experience significant growth in the coming years.
The growth of the market is attributed to the increasing demand for data storage and processing, driven by the proliferation of cloud computing, big data analytics, and artificial intelligence (AI). The growing adoption of cloud-based services and the increasing number of data centers are further fueling the demand for datacenter chips. Additionally, the advancements in chip technology, such as the introduction of multi-core processors and the integration of AI capabilities, are expected to drive the growth of the market in the coming years.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Cloud computing, high-performance computing (HPC), artificial intelligence (AI), and big data analytics are key applications driving the growth of the datacenter chip market. Cloud computing is the largest application segment, accounting for over 40% of the market in 2023 and is projected to maintain its dominance throughout the forecast period. HPC, AI, and big data analytics are also growing rapidly, with increasing demand for data processing and analysis. For instance, the HPC market is expected to grow at a CAGR of 11.2% from 2024 to 2032, reaching a value of USD 58.9 billion by 2032. The increasing adoption of AI and big data analytics is also driving the demand for datacenter chips, as these applications require powerful computing capabilities to process large volumes of data.
The Connection Type segment is a critical aspect of the Datacenter Chip Market, categorizing chips based on their connectivity interfaces. PCIe (Peripheral Component Interconnect Express) is a prevalent connection type known for its high bandwidth and low latency, making it suitable for data-intensive applications. CXL (Compute Express Link) is gaining traction as a next-generation interface, offering even higher bandwidth and lower latency, enabling seamless communication between CPUs, memory, and accelerators.
NVLink, developed by NVIDIA, is another high-performance connection type specifically designed for interconnecting GPUs in multi-GPU systems. The Datacenter Chip Market revenue for the Connection Type segment is projected to reach $12.3 billion by 2024, with a significant market share attributed to PCIe, followed by CXL and NVLink.
The Datacenter Chip Market is segmented by Form Factor into SoC, MCM, and FPGA. SoC is expected to hold the largest market share in 2023 due to its compact size and low power consumption. MCM is expected to grow at the highest CAGR during the forecast period due to its ability to integrate multiple chips into a single package. FPGA is expected to account for a small share of the market due to its high cost and power consumption. In 2023, the Datacenter Chip Market revenue for SoC is estimated to be around USD 12.3 Billion, for MCM is around USD 5.1 Billion and for FPGA is around USD 3.6 Billion.
The regional segmentation of the Datacenter Chip Market presents a diverse landscape with varying growth trajectories and market dynamics. North America is anticipated to dominate the market, driven by the presence of major cloud service providers and hyperscale data centers. The region is expected to account for over 35% of the Datacenter Chip Market revenue in 2024. Europe follows closely, with a significant demand for datacenter chips from the telecommunications and financial sectors.
The region is projected to grow at a steady pace, capturing a market share of approximately 25% by 2024.APAC is emerging as a key growth region, fueled by the rapidly expanding data center infrastructure in countries like China, India, and Japan. The region is anticipated to witness robust growth, with a projected market share of over 20% by 2024. South America and MEA are expected to contribute a smaller but growing share of the Datacenter Chip Market. These regions are experiencing increasing investments in data center development, driven by the growing adoption of cloud computing and digital transformation initiatives.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Key companies in the Datacenter Chip Market are Concentrating on Developing innovative products and solutions to cater to the growing demand for data center chips. They are investing in research and development activities to improve the performance and efficiency of their products. The industry of Datacenter Chip Market is expected to grow significantly in the next five years owing to an increasing demand for data center chips in various end user industries such as cloud computing, artificial intelligence, and machine learning.
Leading companies operating in the Datacenter Chip Market are also concentrating on widening their geographical reach and entering new markets to increase their market share. They are forming partnerships and collaborations with other companies to strengthen their position in the market.
The Datacenter Chip Market Competitive Landscape is expected to remain competitive in the upcoming years. The industry is anticipated to witness both horizontal and vertical integration. There is also going to be an addition of new companies in the space and existing players will be offering a wider and broader range of data center chips.
Key players operating in Datacenter Chip Market are Intel Corporation, Advanced Micro Devices, Inc., Qualcomm Inc., Nvidia Corporation, IBM Corporation, Arm Holdings PLC, Marvell Technology Group, Ampere Computing LLC., Fujitsu Ltd., and NXP Semiconductors NV.
Intel Corporation
Intel Corporation is a leading company in the Datacenter Chip Market. It has a strong presence in the areas of cloud computing, artificial intelligence, and machine learning. The company’s key product offerings are micro-processors, accelerators, and memory. Intel Corporation is investing in research and development activities to develop a new and advanced data center chip. The company has a strong global presence and has a robust distribution network. Intel Corporation has a high degree of brand recognition and a loyal customer following.
Advanced Micro Devices, Inc.
Advanced Micro Devices is another leading company in the Datacenter Chip Market. The company has a strong position in the high-performance computing and gaming industry. It offers a wide range of data center chips, such as microprocessors, accelerators, and memory.
The unit has a global presence and a strong and envious distribution network. Advanced Micro Devices is known for its high degree of brand recognition and customer loyalty. The company is also investing in research and development activities to develop a new and advanced data center chip.
Micron Technology, Inc.
SK Hynix Inc.
Samsung Electronics Co., Ltd.
Advanced Micro Devices, Inc.
Broadcom Inc.
Maxim Integrated Products, Inc.
Intel Corporation
Renesas Electronics Corporation
Analog Devices, Inc.
Nvidia Corporation
Marvell Technology, Inc.
Western Digital Corporation
Qualcomm Technologies, Inc.
The Datacenter Chip Market is projected to grow from USD 21.13 billion in 2023 to USD 65.3 billion by 2032, at a CAGR of 13.35% during the forecast period. The growth of the market is attributed to the increasing demand for data storage and processing, driven by the proliferation of cloud computing, big data analytics, and artificial intelligence. Additionally, the growing adoption of edge computing and the increasing number of connected devices are expected to further fuel the growth of the market.
In January 2023, Intel announced the launch of its fourth-generation Xeon Scalable processors, which are designed for high-performance computing and artificial intelligence workloads.
In February 2023, AMD announced the launch of its EPYC Genoa processors, which are designed for cloud and enterprise workloads.In March 2023, NVIDIA announced the launch of its Grace CPU, which is designed for large-scale artificial intelligence workloads.These developments indicate the increasing competition in the datacenter chip market, as well as the growing demand for high-performance computing solutions.
x86
ARM
Power
Cloud Computing
High-Performance Computing
Artificial Intelligence
Big Data Analytics
PCIe
CXL
NVLink
SoC
MCM
FPGA
North America
Europe
South America
Asia Pacific
Middle East and Africa
| Report Attribute/Metric | Details |
| Market Size 2023 | 13.16 (USD Billion) |
| Market Size 2024 | 14.75 (USD Billion) |
| Market Size 2032 | 36.14 (USD Billion) |
| Compound Annual Growth Rate (CAGR) | 11.9% (2024 - 2032) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year | 2023 |
| Market Forecast Period | 2024 - 2032 |
| Historical Data | 2019 - 2023 |
| Market Forecast Units | USD Billion |
| Key Companies Profiled | Xilinx, Inc., Micron Technology, Inc., SK Hynix Inc., Samsung Electronics Co., Ltd., Advanced Micro Devices, Inc., Broadcom Inc., Maxim Integrated Products, Inc., Intel Corporation, Renesas Electronics Corporation, Analog Devices, Inc., Nvidia Corporation, Marvell Technology, Inc., Western Digital Corporation, Qualcomm Technologies, Inc. |
| Segments Covered | Chip Architecture, Application, Connection Type, Form Factor, Regional |
| Key Market Opportunities | Growing demand for AI and ML applications Increasing adoption of cloud computingExpansion of 5G networksBooming HPC and edge computingData center consolidation |
| Key Market Dynamics | Cloud and Edge Computing Proliferation Growing Demand for AI and ML WorkloadsHyperscale Data Center ExpansionAdoption of HighPerformance Computing HPCShift toward Armbased Architectures |
| Countries Covered | North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Datacenter Chip Market size is expected to reach USD 36.14 billion by 2032, exhibiting a CAGR of 11.9% during the forecast period (2024-2032).
North America and Asia Pacific are the major regions contributing to the growth of the Datacenter Chip Market. North America held the largest market share in 2023, and Asia Pacific is projected to grow at the highest CAGR during the forecast period.
Datacenter chips are primarily used in cloud computing, artificial intelligence (AI), machine learning (ML), and high-performance computing (HPC) applications.
The key competitors in the Datacenter Chip Market include Intel, AMD, NVIDIA, Qualcomm, and Samsung.
The growth of the Datacenter Chip Market is driven by the increasing adoption of cloud computing, AI, and ML technologies. The rising demand for data storage and processing is also contributing to the market growth.
The Datacenter Chip Market faces challenges such as the shortage of skilled professionals, the high cost of chip manufacturing, and geopolitical uncertainties.
The latest trends in the Datacenter Chip Market include the adoption of advanced packaging technologies, the development of energy-efficient chips, and the integration of AI and ML capabilities into chips.
The Datacenter Chip Market is expected to reach USD 14.75 billion in 2024, exhibiting a growth of 11.9% from 2023.
The Datacenter Chip Market is expected to reach USD 36.14 billion in 2032, exhibiting a CAGR of 11.9% from 2024 to 2032.
The key factors driving the growth of the Datacenter Chip Market include the increasing demand for cloud computing services, the adoption of AI and ML technologies, and the growth of data-intensive workloads.
Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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