According to the report "2024 Q1 Data Center Compute Processor" released by TechInsights, accelerated servers will account for 16% of data center server shipments in 2024, and one-third of all shipped servers will be accelerated servers by 2029.
TechInsights opened the focus series from a technical perspective, emphasizing the key role of advanced packaging and chiplets in meeting the needs of the end market. The main driving force behind these demands comes from the processing requirements of data centers driven by accelerated computing and artificial intelligence (AI). The data center processing market is generally divided into massive enterprises such as Amazon (AMZN.US), Microsoft (MSFT.US), Meta (META.US), and other large companies, as well as high-end markets such as enterprise, government, and high-performance computing (HPC) used for research, which have a higher demand for traditional servers, storage servers, and acceleration servers.
From the perspective of servers and server processors, graphics processing units (GPU) and Application-Specific Integrated Circuit (ASIC) in accelerated servers can bring the greatest market value. The report pointed out that in the ten years before 2022, the market developed slowly, with an annual compound growth rate of about 12%. Since the end of 2022, the market has exploded, with an average annual compound growth rate of around 70% until 2025. As shown in the following figure, the revenue of the central processing unit (CPU) is expected to roughly maintain its current level in the next few years, while the revenue of GPU and ASIC will skyrocket.
The demand for accelerated computing is the main catalyst for the growth of GPU and ASIC. GPU and ASIC are reshaping the revenue structure of data center processors, especially the scarcity of GPU leading to a rise in average selling prices (ASP) during this infrastructure construction period. From the perspective of data center processor shipments, historically, there were relatively few accelerated servers in the market from 2015 to 2020. The year around 2020 was the turning point for the appearance of accelerated servers. By 2029, accelerated processors are expected to account for about 50% of the annual data center shipments. This predicted end-market demand helps explain why the supply chain is relatively quickly shifting to develop chip-based solutions.