Data centre chip industry expected to surpass a CAGR of 8.1% by 2032

Author: Isha Jain

According to DataHorizzon Research, the data centre chip market was valued at USD 11.1bn in 2022. It is anticipated to witness substantial growth, reaching a market size of USD 23.8bn by 2032, with a Compound Annual Growth Rate (CAGR) of 8.1%.

The data centre chip industry is experiencing rapid expansion driven by the immense growth of data generation and the imperative for efficient data processing. There’s a soaring demand for robust and efficient data centre chips capable of handling the vast influx of data from various sources such as IoT devices, social media platforms, e-commerce transactions, and cloud-based applications. These chips play a pivotal role in enhancing data processing speed, optimising energy consumption, and delivering high performance to manage increasing workloads effectively.

By 2025, it is projected that 51% of IT spending will transition to cloud solutions, primarily due to the advantages offered by cloud-based services like scalability, accessibility, and cost-effectiveness. Consequently, there’s a surging demand for data centre chips tailored to support cloud computing requirements, encompassing high-performance computing, virtual machine management, and data storage functionalities.

The pivotal roles played by Artificial Intelligence (AI) and machine learning (ML) across various sectors such as healthcare, finance, automotive, and e-commerce are undeniable. These technologies necessitate advanced algorithms and powerful computational capabilities to process and analyse large datasets efficiently. Consequently, there’s a significant uptick in demand for data centre chips equipped with neural network accelerators and deep learning capabilities, enabling faster and more efficient execution of workloads.

Segmentation overview:

The global data centre chip market has been segmented into chip type, data centre size, vertical, and geography. The GPU segment dominates the revenue share due to its parallel processing architecture that allows it to perform multiple calculations simultaneously. The ASIC segment is expected to grow significantly. In terms of vertical, the BFSI segment leads the market growth.

Report highlights:

• The global data centre chip market growth is anticipated at a CAGR of 8.1% by 2032.
• The data centre chip market is growing due to cloud computing, chip technology advancements, and government regulations on data centre localisation.
• North America is the dominant player in the data centre chip market due to a mature and technologically advanced data centre infrastructure fuelled by the presence of major technology companies and cloud service providers.
• Some prominent players in the market report include Achronix Semiconductor Corporation, Advanced Micro Devices, Arm, Broadcom, Fujitsu, GlobalFoundries, Huawei Technologies, Intel, Marvell Technology, NVIDIA and Taiwan Semiconductor Manufacturing Company.

Recent developments:

• NVIDIA and Acer have jointly developed Predator Connect software, which prioritises 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. 

Data centre chip market segmentation:

• By chip type: GPU, ASIC, FPGA, CPU, others.
• By data centre size: Small, medium, and large.
• By vertical: BFSI, manufacturing, government, IT and telecom, retail, transportation, energy and utilities, others.
• By region: North America, Latin America, Europe, Asia Pacific, the Middle East and Africa. 

These insights are based on a report on data centre chip market by DataHorizzon Research.