Datacenter Chip Market Analysis

Datacenter Chip Market Analysis

Based on chip type, the market is segmented into central processing unit (CPU), graphics processing unit (GPU), field-programmable gate array (FPGA), application specific integrated circuit (ASIC), and others. The GPU segment dominated the market in 2023 with the share of over 30% due to its parallel processing capabilities making it perfect for handling compute-intensive workloads such as AI, machine learning and data analytics. Unlike traditional CPUs, GPUs do multiple calculations at once resulting in faster processing and improved performance on workloads with large datasets. Moreover, there has been an increase in deep learning and neural network-based applications that require GPUs for data centers because training and inference in such tasks rely on parallel computing.
 

Based on data center size, the market is segmented into small and medium size, and large size. The large size segment is anticipated to register a CAGR of over 15% from 2024 to 2032. The need for higher processing capabilities and memory capacity has given rise to a corresponding demand for bigger chips with more capacities to handle such tasks efficiently. This growth is also driven by the rapid spread of cloud computing services and the development of hyperscale data centers that need chips which can simultaneously deal with huge amounts of data and workloads. Large sized chips offer higher performance and efficiency, which enables data centers to handle intensive workloads more effectively and optimizes space utilization.
 

North America accounted for 37% revenue share of the global datacenter chip market in 2023. The region possesses a strong technology development infrastructure complemented by a large number of the main data center operators and cloud service providers. To support their ongoing upgrades and expansions of data center infrastructure, they require sophisticated chip technologies to facilitate their operations. Consequently, North America is an early adopter of emerging technologies such as artificial intelligence, machine learning, big data analytics which need specialized chips to deliver high-performance and power efficient processing capabilities. An increasing number of Internet of Things (IoT) devices are being used with industries becoming digitized, thus driving the demand for data center chips in this region.