The Global Data Center Chip Market size is expected to reach $29.8 billion by 2030, rising at a market growth of 13.8% CAGR during the forecast period.In the year 2022, the market attained a volume of 1,354.4 thousand units, experiencing a growth of 4.9% (2019-2022).
The field-programmable gate array (FPGA) is a semiconductor or integrated circuit frequently utilized in electronic circuits. Therefore, the FPGA segment will capture a 1/5th share by 2030. The market expansion is attributable to the widespread adoption of FPGA chips in data centers to accelerate and improve the performance of large-scale data systems. Many data centers use FPGA to enable high-speed data processing by offering low-latency connections and high-bandwidth solutions to network and storage systems, eventually driving the market's expansion. Additionally, FPGA offers algorithmic acceleration, compression, and data filtering applications to data centers, accelerating the market's expansion.
The major strategies followed by the market participants are Product Launches as the key developmental strategy in order to keep pace with the changing demands of end users. In April, 2023, Qualcomm Technologies, Inc., revealed its latest Qualcomm QCM8550 and Qualcomm QCS8550 Processors, at the pinnacle of performance. In April, 2023, Broadcom Inc. unveiled a fresh chip, named Jericho3-AI, which can connect up to 32,000 GPU chips together.
Based on the Analysis presented in the KBV Cardinal matrix; Samsung Electronics Co., Ltd. (Samsung Group) and Taiwan Semiconductor Manufacturing Company Limited are the forerunners in the Market. In May, 2023, Samsung Electronics Co. Ltd revealed the commencement of mass production for its 16-gigabit (Gb) DDR5 DRAM, utilizing the advanced 12 nanometer (nm)-class process technology. Companies such as Advanced Micro Devices, Inc., Huawei Technologies Co., Ltd., NVIDIA Corporation, and Qualcomm, Inc. are some of the key innovators in the Market.
In the past few decades, the generation of digital data has risen dramatically. The growing use of digital devices, including smartphones and computers, in the daily lives of ordinary people is one of the primary causes of this explosion in digital data generation. The rising popularity of the Internet of Things (IoT) and the data generated by numerous IoT devices have also contributed to the data boom. The number of data centers is growing globally due to all the factors above and the rising data generation. In light of this, it is anticipated that the market will also experience development, as data center chips are essential for data centers.
Businesses can employ cloud computing to manage operations efficiently and quickly react to shifting market conditions. The expansion of cloud computing and the associated increase in data center demand are driven by the rapid evolution of technology, changing business needs, and societal shifts. As these trends continue, it's likely that the demand for data centers will persist and continue to evolve to meet the growing requirements of a digital and data-driven world. Thus, the development of AI, virtual reality systems, and the 5G network has increased the number of data centers, driving the expansion of the market.
Many companies seek to reduce the size of their data center infrastructure. Infrastructure as a Service (IaaS) is a crucial concept where numerous companies utilize consolidated data centers. When organizations consolidate their data centers, they often aim to optimize resource utilization and improve efficiency. This can lead to a reduction in the total number of servers and networking equipment required, which, in turn, decreases the overall demand for data center chips, including CPUs, GPUs, and networking chips. This could pose a significant obstacle to the market's growth during the forecast period.
The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Product Launches and Product Expansions.
By vertical, the market is segmented into BFSI, manufacturing, government, IT & telecom, retail, transportation, energy & utilities, and others. In 2022, the BFSI segment dominated the market with maximum revenue share. The BFSI sector relies heavily on data centers to securely store and process massive financial transactions, customers’ data, and sensitive data. Supporting various BFSI operations, such as online banking, mobile payments, trading platforms, risk management, fraud detection, and compliance reporting, data centers play a mission-critical role. The demand for reliable and high-performance data centers has surged within the BFSI sector due to the emergence of digital transformation and the expanding usage of financial technology (FinTech) solutions. Due to the sensitive nature of financial data, security, and regulatory compliance are paramount in the BFSI sector.
By chip type, the market is segmented into GPU, ASIC, FPGA, CPU, and others. The CPU segment acquired a promising revenue share in the market in 2022. As more businesses shift their IT infrastructure to the cloud, there is an increase in the demand for data center CPUs. Cloud service providers invest heavily in data centers to accommodate this demand, driving the market's growth. Businesses are collecting and analyzing more data than ever before requiring strong CPUs for processing. Businesses aim to improve their decision-making and derive insights from their data. Thus, it is expected that this trend will continue in the coming years and drive the growth of the market.
By data center size, the market is fragmented into small & medium size and large. In 2022, the large segment witnessed the largest revenue share in the market. Large data centers are enormous facilities designed to manage massive quantities of data, computing power, and infrastructure requirements. Most of the time, large IT corporations, cloud service providers, and businesses with substantial IT demands own and run these data centers. Large data centers are distinguished by their enormous physical footprint, which may encompass thousands of square meters and contain many servers, networking devices, storage systems, and cooling infrastructure. The demand for massive data centers has increased owing to the quick development of cloud computing services. Furthermore, there is a greater need for huge data centers due to the growth of big data and the need for advanced data analytics.
| Report Attribute | Details |
|---|---|
| Market size value in 2022 | USD 11.1 Billion |
| Market size forecast in 2030 | USD 29.8 Billion |
| Base Year | 2022 |
| Historical Period | 2019 to 2021 |
| Forecast Period | 2023 to 2030 |
| Revenue Growth Rate | CAGR of 13.8% from 2023 to 2030 |
| Number of Pages | 430 |
| Number of Table | 814 |
| Quantitative Data | Volume in Thousand Units; revenue in USD Million, and CAGR from 2019 to 2030 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Market Share Analysis, Companies Strategic Developments, Company Profiling |
| Segments covered | Chip Type, Data Center Size, Vertical, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
| Growth Drivers |
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| Restraints |
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Region-wise, the market is analysed across North America, Europe, Asia Pacific, and LAMEA. In 2022, the North America region led the market by generating the highest revenue share. In North America, the demand for data center processors will increase due to increased investments by hyperscale cloud providers, colocation service providers, and enterprises that are improving their IT infrastructure to accommodate edge computing, 5G, multi-cloud services, big data analytics, and the Internet of Things. North America's data center hub is situated in the US. The utilization of data centers has increased over the past few years, and the country has experienced substantial investments in cloud computing. Throughout the projection, these elements will fuel the market's expansion in North America.
Free Valuable Insights: Global Data Center Chip Market size to reach USD 29.8 Billion by 2030
The market research report covers the analysis of key stakeholders of the market. Key companies profiled in the report include Advanced Micro Devices, Inc., Arm Limited, Broadcom, Inc., GLOBALFOUNDRIES Inc., Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Intel Corporation, NVIDIA Corporation, Samsung Electronics Co., Ltd. (Samsung Group), Taiwan Semiconductor Manufacturing Company Limited, and Qualcomm, Inc.
By Chip Type(Volume, Thousand Units, USD Million, 2019-2030)
By Vertical(Volume, Thousand Units, USD Million, 2019-2030)
By Data Center Size(Volume, Thousand Units, USD Million, 2019-2030)
By Geography(Volume, Thousand Units, USD Million, 2019-2030)
The Market size is projected to reach USD 29.8 billion by 2030.
Development of cloud computing are driving the Market in coming years, however, Consolidation of data centers restraints the growth of the Market.
Advanced Micro Devices, Inc., Arm Limited, Broadcom, Inc., GLOBALFOUNDRIES Inc., Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Intel Corporation, NVIDIA Corporation, Samsung Electronics Co., Ltd. (Samsung Group), Taiwan Semiconductor Manufacturing Company Limited, and Qualcomm, Inc.
The expected CAGR of this Market is 13.8% from 2023 to 2030.
The GPU segment is leading the Market by Chip Type in 2022; thereby, achieving a market value of $8.1 billion by 2030.
The North America region dominated the Market by Region in 2022 and would continue to be a dominant market till 2030; thereby, achieving a market value of $10.4 billion by 2030.
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