“The surge in growth of the server and storage semiconductor and component market is attributed to several key factors driving the digital landscape evolution, including the ascendancy of emerging applications such as AI, ongoing digital transformation initiatives, and future edge computing deployments,” said Baron Fung, Senior Research Director at Dell’Oro Group. “In a notable turn of events in 2023, revenues for accelerators surpassed those of CPUs. The gap between accelerator and CPU revenues is predicted to widen further over the next five years as accelerated computing gains traction across diverse domain-specific workloads, ultimately enhancing overall efficiency in data centers,” said Fung.
Additional highlights from the Data Center IT Semiconductors and Components 5-Year January 2024 Forecast Report:
CPU revenue growth is expected for moderate growth over the next five years due to reduced demand for general-purpose servers and extended replacement cycles for hyperscalers. The server CPU landscape is diversifying, with compelling choices for the x86 and ARM architectures. The diversity is resulting in innovations, with future generations of CPUs set to increase significantly in core count and will be embedded with accelerators.
Memory is anticipated to experience high growth due to increased demand for high-bandwidth memory, while storage drives, including HDDs and flash storage, are projected for robust growth given the proliferation of AI applications could place greater emphasis on data storage.
The major Cloud SPs develop their own custom processors, such as CPUs, accelerators, and Smart NICs, as they try to optimize their infrastructure, which could be disruptive to the long-term growth and ecosystem of the market.
