Market Outlook:

The data center chip market size is poised to reach USD 201.32 Billion by 2023, with a projected escalation to USD 395.56 Billion by 2032, reflecting a compound annual growth rate (CAGR) of 12.55% during the forecast period (2024-2031). 

Data centers need specific integrated circuits that perform complex calculations and data operations at their servers. The different data center chips work as CPUs, GPUs, ASICs, and FPGAs with distinct functionalities such as processing, graphics rendering, specific applications, and logic reconfiguration. The chips provide powerful support for all major data processing systems along with cloud services AI needs and big data technologies while delivering top performance and energy savings. The industry advances because technology keeps growing while more data requires better and less expensive data center systems to process efficiently. Organizations across industries use data centers as connected systems to handle their huge data volumes. Data centers represent the main business focus because every organization depends on them for daily operations through the data they contain. A data center chip needs to be located in the server zone of this facility to operate effectively.

Market Dynamics:

Driver:

AI data centers benefit most from parallel computers because these advanced systems solve difficult tasks quickly while handling growing amounts of data generated by advanced technology research. Data centers receive better performance by using multiple GPUs and AI accelerators to let their AI applications run quicker across several fields. The data center CPU system reads instructions and data from memory locations during serial processing. During processing the computer performs its calculations step-by-step through the addresses it finds in memory. The steps of processing follow a single sequence in serial computing. Each data center task becomes multiple isolated instruction groups that run through a processor step by step. The major challenge for data centers happens when they deal with AI work and large datasets that slow their operations. NVIDIA Corporation developed its H100 chip to enhance performance because of these challenges. Specialized processors entering data centers boost AI usage which expands the market for chip solutions in data centers.

Restraint:

Data centers are complex systems. Organizations demand trained professionals who can create administer and put data center chips into operation in their data centers. The new technology industry has too few qualified employees because it is starting to grow. The limiting impact of this issue is expected to stay significant throughout the first years from 2019 to 2025. Businesses from various industries use new technologies to boost operations while decreasing waste during manufacturing while keeping industry advantages available and enabling product design updates. Global economic changes through technology advancements will replace work roles while making fresh positions available and upgrading required employment capabilities around the world. Matchers who add machine vision to their production lines need advanced technical knowledge which makes entry difficult for entry-level staff with basic education. The lack of qualified workers creates significant barriers for market growth of data center chips. The data center chip market's rate of growth depends on finding solutions to the workforce challenges currently affecting it.

Opportunity:

Organizations use AI and machine learning models on processing chips to handle big data better while the systems operate. Data center chips built for AI and ML tasks require high parallel processing strength and low precision numbers along with hardware designed for artificial intelligence and hardware accelerators like TPUs or GPUs. In March 2022 NVIDIA released their H100 data center chip which trains and responds to LLMs markets four times faster than A100 and delivers user answers 30 times quicker than A100. The market for data center chips now moves toward hyperscale facilities because more information than ever before is being created and processed worldwide. Google Amazon and Facebook demand unique computer chips to process high-volume data efficiently at their substantial data center sites. The technology provides superior system growth plus enhanced performance along with energy savings when used in large data systems. Hyperscale datacenter chips had to advance because organizations demanded to process higher volumes of information.

Key Players:

• NVIDIA Corporation (US)
• Advanced Micro Devices, Inc. (US)
• Intel Corporation (US)
• Micron Technology, Inc. (US)
• Google (US)
• SK HYNIX INC. (South Korea)
• AWS  (US)
• Samsung (South Korea)
• Texas Instruments Incorporated (US)
• Alibaba (China)
• Analog Devices (US)
• Monolithic Power Systems, Inc., (US)
• STMicroelectronics (Switzerland)
• Sensirion AG (Switzerland)
• Honeywell International, Inc. (US)
• AKCP (US)
• Bosch Sensortec (Germany)
• Renesas Electronic Corporation (Japan)
• Infineon (Germany)
• Diodes Incorporated (US)
• Imagination Technologies (UK)
• Graphcore (UK)
• Cisco Systems, Inc. (US)
• Dell Inc. (US)
• Huawei Technologies Co., Ltd. (China)
• Others

Recent Development:

• In April 2024, Marcron Tech Inc (US) joined hands with Silvaco Group Inc (US) to expand their partnership and create Fab Tech Co-Optimization (FTCO). The solution lets customers run machine learning simulations using manufacturing data and builds a computer model that tests wafer fabrication behaviors. Micron Technology (from the USA) spent 5 million US dollars for FTCO development. 

• In March 2024, NVIDIA (in the US) introduced NVIDIA Blackwell for organization use to develop and deploy LLM applications instantly. NVIDIA Blackwell platform supports AI training and live model inference with models that reach parameter counts up to 10 trillion.

Segment Insights:

By Data Center Type

Business organizations who need both many servers and processing power normally use these large data centers. These data centers consume space that is above 25,000 square feet. They make it cheaper to manage power and automatically adjust resources while tracking hardware operations at a low cost. Data centers must be large-scale to support all elements of cloud service management including IaaS, PaaS, and SaaS. Data centers allow organizations to meet rising customer needs while expanding globally to serve consumers everywhere. Service users in scientific research business sectors and financial organizations depend on this structure more often. Organizations need data centers to process artificial intelligence and machine learning models for their calculation and experimentation requirements. Data centers serving large organizations work more efficiently with their resources which makes their usage cost-friendly. Many different business sectors including telecom and retail work with data centers because these industries depend on their available services and solutions. End-user sectors set up large data facilities to help transform their regular business practices into digital operations.

By Chip Type

The GPU sector achieved more than 30% market share in 2023 because its ability to handle many calculations at once makes it an ideal solution for demanding tasks like AI applications. CPUs handle computations at once to deliver enhanced output from large data sets faster than standard processors. Deep learning programs and neural network tasks now demand GPU systems from data centers because parallel processing is essential for training and running neural networks. A need for powerful chips with increased memory arises from tasks that need large processing power to operate effectively. Data centers process more powerfully without needing as many physical elements because bigger chips run both efficiently and fast.

Regional Insights:

The Asia Pacific data center chip market will experience the fastest growth over the next period. Asia Pacific stands out in global data center chip sales because it supports advanced technologies through its strong manufacturing base. Major economic developments of recent quarters in China Japan and India shape the future value of data center chip sales across Asia Pacific region. China maintains its ranking as a top world location for producing manufactured products in the Asia Pacific. While growth will be reduced Asia Pacific hosts most worldwide data center chip production. Government actions to create free trade zones in Shanghai draw more international capital investors. China needs more backup facilities with high capacity processing power due to this growing demand. The country now builds and develops better data center equipment infrastructure. Organizations both public and private take steps that create market growth for data center chips in China and throughout Asia Pacific.

Segmentation:

By Chip Type

• Central Processing Unit

• Graphics Processing Unit

• Field-Programmable Gate Array

• Application Specific Integrated Circuit

By Network

• Small and Medium Data Centers

• Large Data Centers

By Application

• NIC/Network Adapters

• Interconnects

By End-user

• BFSI

• Healthcare

• Retail

• Telecommunications

• Media and Entertainment

• Energy and Utilities

• Others

By Region

North America

• USA

• Canada

• Mexico

Europe

• France

• UK

• Spain

• Germany

• Italy

• Rest of Europe

Asia Pacific

• China

• Japan

• India

• South Korea

• Rest of Asia Pacific

Middle East & Africa

• GCC

• South Africa

• Rest of the Middle East & Africa

South America

• Brazil

• Argentina

• Rest of South America

What to Expect from Industry Profile?

1. Save time carrying out entry-level research by identifying the size, growth, major segments, and leading players in the Data Center Chip market in the world.

2. Use the PORTER’s Five Forces analysis to determine the competitive intensity and therefore market attractiveness of the Global Data Center Chip market.

3. Leading company profiles reveal details of key Data Center Chip market players’ global operations, strategies, financial performance & recent developments.

4. Add weight to presentations and pitches by understanding the future growth prospects of the Global Data Center Chip market with forecast for the decade by both market share (%) & revenue (USD Billion).

FAQ’s

1) What are the major factors driving the growth of the Global Data Center Chip Market?

• Increased Data Generation and Cloud Adoption has intensified the demand for data center chips.

2) What would be the CAGR of the Global Data Center Chip Market over the forecast period?

• The Global Data Center Chip Market is poised to grow at a CAGR of 12.55% from 2025 to 2032.

3) Which region will provide more business opportunities for the growth of the Global Data Center Chip Market in the future?

• The Asia Pacific region is expected to create more opportunities in the market.

4) Who are the major players dominating the Global Data Center Chip Market?

• NVIDIA Corporation (US), Advanced Micro Devices, Inc. (US), Intel Corporation (US), Micron Technology,  Inc. (US), Google (US), SK HYNIX INC. (South Korea), AWS  (US), Samsung (South Korea), Texas Instruments Incorporated (US), Alibaba (China), Analog Devices (US), Monolithic Power Systems,  Inc.,  (US), STMicroelectronics (Switzerland), Sensirion AG (Switzerland), Honeywell International,  Inc. (US), AKCP (US), Bosch Sensortec (Germany), Renesas Electronic Corporation (Japan), Infineon (Germany), Diodes Incorporated (US), Imagination Technologies (UK), Graphcore (UK), Cisco Systems,  Inc. (US), Dell Inc. (US), Huawei Technologies Co.,  Ltd. (China).

5) What are the segments in the Global Data Center Chip Market?

• By Chip Type, By Network, By End-use, By Application are the industry key segments considered for research study.

6) What is the estimated market revenue for the Global Data Center Chip Market in 2032?

• The estimated revenue for the Global Data Center Chip Market in 2032 is USD 395.56 Billion.