The global data center chip market size reached US$ 10.9 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 17.8 Billion by 2032, exhibiting a growth rate (CAGR) of 5.5% during 2024-2032. The expanding information technology (IT) industry, continuous technological advancements, such as the introduction of the five-nanometer process for semiconductor manufacturing, and extensive research and development (R&D) efforts by key players, are some of the major factors propelling the market.
Market Size in 2023
|US$ 10.9 Billion
Market Forecast in 2032
|US$ 17.8 Billion
Market Growth Rate 2024-2032
A data center chip, also known as a data center processing unit (DCPU), is a specialized integrated circuit designed for intensive computational tasks within data centers. These chips are engineered with multiple processing cores that work in parallel, enabling them to handle large datasets and complex workloads efficiently. Data center chips are optimized for tasks such as artificial intelligence, machine learning, and data analytics, offering exceptional performance for these demanding applications. Energy efficiency is a crucial consideration, as data centers consume massive amounts of power, so these chips are designed with advanced technologies and power management features to reduce operational costs and environmental impact.
The global market is majorly driven by the expanding information technology (IT) industry. As digital transformation accelerates in the corporate sector, several companies are making significant investments in data centers, leading to an increased demand for data center chips worldwide. The banking, financial services, and insurance (BFSI) sector's adoption of data centers and cloud computing solutions for enhanced security and flexibility is also contributing to this growth. Furthermore, the market is benefiting from continuous technological advancements, such as the introduction of the five-nanometer process for semiconductor manufacturing, which has created a positive outlook for the industry. Additionally, specialized circuitry chips that offer improved power consumption and performance are gaining widespread popularity on a global scale. Leading manufacturers are optimizing costs by customizing systems to meet their specific business needs, further impelling the adoption of these chips. Also, extensive research and development (R&D) efforts by key players are additional factors positively influencing the market's expansion.
Data Center Chip Market Trends/Drivers:
The Increasing Demand for Cloud Services and Big Data Analytics
As businesses and individuals increasingly adopt cloud computing, there is a rise in the need for data centers to store, manage, and process the vast amounts of data generated. Cloud service providers, such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, continue to expand their infrastructure to cater to this increasing demand. Additionally, enterprises across various industries are leveraging big data analytics to gain valuable insights, make data-driven decisions, and enhance their competitive advantage. This, too, necessitates the deployment of sophisticated data centers with high computing power and storage capabilities. As a result, data center operators are witnessing an unprecedented growth opportunity, augmenting investments in new data center construction and technological advancements to meet the expanding needs of cloud and big data applications.
Expanding IoT and Edge Computing
IoT devices, such as smart sensors, wearables, and connected appliances, generate an enormous amount of data at the network edge. To process and analyze this data in real-time, edge data centers are becoming increasingly essential. Edge data centers reduce latency, enhance data security, and enable faster decision-making, making them critical components of the evolving digital ecosystem. As the number of IoT devices continues to skyrocket, data center operators are compelled to establish edge infrastructure to support the massive data influx. This trend is prompting data center providers to reimagine their network architecture, create edge-friendly data centers, and invest in edge computing technologies to stay competitive in the market.
Growth of AI and Machine Learning Applications
AI and ML algorithms require significant computational power to process and analyze vast datasets. Consequently, data center chips and hardware must be optimized to handle the intricacies of these applications effectively. Industries, including healthcare, finance, retail, and autonomous vehicles are increasingly incorporating AI and ML into their operations to enhance efficiency and make data-driven decisions. As AI and ML technologies become mainstream, data center providers are experiencing a rise in demand for powerful infrastructure capable of supporting these cutting-edge applications. To capitalize on this market driver, data center companies are investing heavily in AI-specific hardware, including AI accelerators, GPUs, and specialized chips, to offer scalable and efficient solutions to their clients.
Data Center Chip Industry Segmentation:
IMARC Group provides an analysis of the key trends in each segment of the global data center chip market report, along with forecasts at the global, regional and country levels from 2024-2032. Our report has categorized the market based on chip type, data center size and industry vertical.
Breakup by Chip Type:
GPU dominates the market
The report has provided a detailed breakup and analysis of the market based on the chip type. This includes GPU, ASIC, FPGA, CPU, and others. According to the report, GPU represented the largest segment.
GPUs are specialized processors designed to accelerate and optimize complex graphics and parallel computing tasks. In data centers, GPUs are utilized for a wide range of computationally demanding tasks, such as artificial intelligence, machine learning, data analytics, and scientific simulations. These workloads benefit immensely from the parallelism offered by GPUs, enabling them to process vast amounts of data simultaneously, leading to faster and more efficient computations. The adoption of AI and machine learning applications has been a major driving force behind the growth of GPUs in data centers. Also, GPUs excel in handling the matrix operations and calculations required by neural networks, making them an ideal choice for accelerating deep learning workloads. Moreover, GPUs have also become an essential component of virtualized and containerized environments, where they enable GPU passthrough and hardware acceleration for VMs and containers.
Breakup by Data Center Size:
- Small and Medium Size
- Large Size
Large size data centre dominates the market
The report has provided a detailed breakup and analysis of the market based on the data centre size. This includes small and medium size, and large size. According to the report, the large size represented the largest segment.
Large data centers are substantial facilities designed to handle massive amounts of data, computing power, and infrastructure requirements. These data centers are typically owned and operated by major tech companies, cloud service providers, and enterprises with extensive IT needs. Large data centers are characterized by their vast physical footprint, encompassing thousands of square meters or more, and house a multitude of servers, networking equipment, storage systems, and cooling infrastructure. The rapid growth of cloud computing services has fueled the demand for large-scale data centers. Furthermore, the rise of big data and the need for advanced data analytics have led to an increased demand for large data centers. Companies across industries are generating and accumulating vast volumes of data, necessitating robust data centers with ample storage and processing capabilities. These centers are equipped to handle big data workloads efficiently, enabling organizations to derive valuable insights and make data-driven decisions.
Breakup by Industry Vertical:
- IT and Telecom
- Energy and Utilities
BFSI dominates the market
The report has provided a detailed breakup and analysis of the market based on the industry vertical. This includes BFSI, manufacturing, government, IT and telecom, retail, transportation, energy, and utilities and other. According to the report, BFSI represented the largest segment.
The BFSI industry heavily relies on data centers to manage and process vast volumes of financial transactions, customer data, and sensitive information securely. Data centers play a mission-critical role in supporting various BFSI operations, including online banking, mobile payments, trading platforms, risk management, fraud detection, and compliance reporting. With the rise of digital transformation and the increasing adoption of financial technology (FinTech) solutions, the demand for robust and high-performance data centers has skyrocketed within the BFSI sector. Security and regulatory compliance are paramount in the BFSI industry due to the sensitive nature of financial data. Data centers catering to this sector must adhere to stringent security protocols and certifications to safeguard customer information and financial assets. These data centers deploy advanced encryption technologies, access controls, and intrusion detection systems to ensure data privacy and protection from cyber threats.
Breakup by Region:
- North America
- South Korea
- United Kingdom
- Latin America
- Middle East and Africa
North America exhibits a clear dominance, accounting for the largest data center chip market share
The report has also provided a comprehensive analysis of all the major regional markets, which includes North America (the United States and Canada), Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and Others), Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and Others), Latin America (Brazil, Mexico, and Others), and the Middle East and Africa. According to the report, North America accounted for the largest market share.
North America's robust telecommunications infrastructure and reliable power supply make it an ideal location for data center establishments. The region's well-developed regulatory framework and adherence to data privacy and security standards further enhance its attractiveness to both domestic and international businesses seeking data center services. Moreover, the strong presence of major technology companies, significant investments in cloud computing infrastructure, and the high demand for data-intensive applications across various industries is supporting the regional market. Furthermore, the increasing adoption of cloud-based services and the rising prominence of technologies, such as IoT, big data analytics, and artificial intelligence have propelled the demand for data centers in North America. As businesses strive to deliver seamless digital experiences to their customers, the need for data centers to store, process, and manage vast amounts of data continues to grow rapidly.
Data center chip manufacturers are continuously developing and refining chip architectures to improve performance, power efficiency, and scalability. This involved advancements in multi-core designs, heterogeneous computing, and specialized accelerators tailored for specific workloads, including AI, machine learning, and data analytics. Moreover, several companies are heavily investing in designing chips optimized for artificial intelligence (AI) workloads. These AI-focused chips, such as GPUs, Tensor Processing Units, and AI accelerators, were crucial for powering AI inference and training tasks in data centers, making AI applications faster and more efficient. Also, with growing concerns over data breaches and cyber threats, companies in the data center chip market are focussing to enhance the security features of their chips. Hardware-based security measures, encryption, and secure boot processes were being integrated into data center chips to safeguard data and protect against vulnerabilities.
The report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:
- 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
- Taiwan Semiconductor Manufacturing Company Limited
- In January 2023, Huawei Technologies Co. Ltd. launched Industry-First 50G POL Prototype for Next-Generation Wi-Fi 7 Campus Networks. It upgrades campus networks from 10G PON to 50G PON and allows campus customers to enjoy an ultra-broadband network experience. Also, customers can build networks on demand and smoothly upgrade networks to 50G PON in the future, protecting initial network construction investments.
- In March 2023, Marvell Technology Inc. launched Marvell® Nova™ 1.6 Tbps PAM4 electro-optics platform. It enables the highest speed of data movement in cloud artificial intelligence (AI) / machine learning (ML) and data center networks.
- In December 2022, Taiwan semiconductor manufacturing company limited launched mass production of cutting-edge chips. The new 3 nm chips are smaller in size and generally more capable. They can also save maximum power compared with 5 nm chips.
Data Center Chip Market Report Scope:
|Base Year of the Analysis
|Scope of the Report
|Exploration of Historical and Forecast Trends, Industry Catalysts and Challenges, Segment-Wise Historical and Predictive Market Assessment:
- Chip Type
- Data Center Size
- Industry Vertical
|Chip Types Covered
|GPU, ASIC, FPGA, CPU, Others
|Data Center Sizes Covered
|Small and Medium Size, Large Size
|Industry Verticals Covered
|BFSI, Manufacturing, Government, IT and Telecom, Retail, Transportation, Energy and Utilities, Others
|Asia Pacific, Europe, North America, Latin America, Middle East and Africa
|United States, Canada, Germany, France, United Kingdom, Italy, Spain, Russia, China, Japan, India, South Korea, Australia, Indonesia, Brazil, Mexico
|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, Taiwan Semiconductor Manufacturing Company Limited. etc.
|10% Free Customization
|Report Price and Purchase Option
|Single User License: US$ 3899
Five User License: US$ 4899
Corporate License: US$ 5899
|Post-Sale Analyst Support
|PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)
Key Benefits for Stakeholders:
- IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the data center chip market from 2018-2032.
- The research study provides the latest information on the market drivers, challenges, and opportunities in the global data center chip market.
- The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
- Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the data center chip industry and its attractiveness.
- Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.