The data center chips sector is undergoing significant growth due to the substantial increase in data production and the need for effective data processing.
The data center chips market is witnessing a surge in the need for reliable and efficient data center chips that can manage the large volume of data coming from different sources like IoT devices, social media platforms, e-commerce transactions, and cloud-based applications.
Based on the findings of DataHorizzon Research, the market value of data center chips in 2022 amounted to USD 11.1 Billion. It is projected to experience significant expansion, reaching a market size of USD 23.8 Billion by 2032, exhibiting a Compound Annual Growth Rate (CAGR) of 8.1%.
These data center chips are crucial in improving data processing speed, reducing energy consumption, and providing top-notch performance to handle growing workloads efficiently.
It is estimated that by 2025, more than half of IT spending will shift towards cloud solutions. This shift is primarily driven by the numerous benefits offered by cloud-based services, including scalability, accessibility, and cost-effectiveness.
As a result, there is a growing need for data center chips that are specifically designed to support cloud computing requirements. These chips must be capable of handling high-performance computing, virtual machine management, and data storage functionalities.
Furthermore, the importance of Artificial Intelligence (AI) and Machine Learning (ML) cannot be overstated in various sectors such as healthcare, finance, automotive, and e-commerce. These technologies rely on advanced algorithms and powerful computational capabilities to efficiently process and analyze large datasets.
Consequently, there is a significant increase in demand for data center chips that are equipped with neural network accelerators and deep learning capabilities. These specialized chips enable faster and more efficient execution of workloads, further driving the adoption of AI and ML across industries.
Factors Driving the Growth of Data Center Chip Market and Key Dominant Players
The growth of the global data center chip market is projected to reach a CAGR of 8.1% by 2032. Factors driving this growth include cloud computing, advancements in chip technology, and government regulations related to data center localization.
North America, with the United States at the forefront, stands out as a key player in the data center chip market, boasting a mature and technologically advanced data center infrastructure supported by major technology firms and cloud service providers.
Notable Companies in the Data Center Chip Market
Achronix Semiconductor Corporation, Advanced Micro Devices Inc., Arm Limited, Broadcom Inc., Fujitsu Limited, GlobalFoundries Inc., Huawei Technologies Co. Ltd., Intel Corporation, Marvell Technology Inc., Nvidia Corporation, and Taiwan Semiconductor Manufacturing Company Limited.
Recent Developments:
- NVIDIA and Acer have jointly developed Predator Connect software, which prioritizes cloud gaming traffic for a superior streaming experience, offering GeForce NOW Ultimate membership.
- Marvell Technology’s latest earnings report highlights a surge in revenue due to AI demand, forecasting AI revenue to double in fiscal 2024 and continue to increase.
These insights are based on a report on Data Center Chip Market by DataHorizzon Research.