Datacenter Chip Market - By Chip Type, By Data Center Size, By Vertical Industry, – Global Forecast, 2025 – 2034

Datacenter Chip Market Size

The global datacenter chip market was valued at USD 15.6 billion in 2024 and is estimated to grow at a CAGR of 15.2% to reach USD 62.9 billion by 2034. The growth of the market is attributed to factors such as rise in demand for AI and machine learning coupled with the rapid expansion of 5G infrastructure.
 

The rapid expansion of 5G infrastructure is a major growth driver in the data center chip market, due to the increasing demand for high-speed data processing, edge computing and advanced AI applications. For instance, according to a report by IBEF, the numbers of 5G base transceiver stations in India has surpassed 450,000 just 22 months after launch of 5G services in October 2022. With rapid deployment of 5G technologies, data center requires high performance processors to handle real time data processing, which pushes the growth of advanced datacenter chip solutions.
 

The surge in demand for AI and machine learning is major catalyst for the datacenter chips market growth. Modern AI applications requires high computing power to process complex algorithms and large data set which demands advanced computing chips and hardware for datacentres. Datacenter are adopting specialized datacenter chips such as GPUs, ASICs which are much more power and offers high speed processing when compared to traditional chips. As the companies are implementing AI and ML for electronics devices, cloud services, and AI driven analytics, the need for datacenter continues to increase, which pushes the demand for datacenter chip market.
 

Rapid expansion of 5G infrastructure is expected to create new opportunities for players. As they can focus on development of AI-optimized processors that aid in delivering high speed data processing. This is expected to help the company to distinguish their product offering and strength their position in competitive market.
 

Datacenter Chip Market Trends

• The rise of decentralized edge computing infrastructure is one of the significant trends in the market. Autonomous vehicles and smart city infrastructure rely on localized processing. Self-driving cars for example cannot afford latency when processing surrounding signals and requires immediate processing. Edge solutions are catering to these issues and driving profitability, which cannot be accomplished with traditional infrastructure models.
   
• Another significant trend in the market is the increasing demand for AI-accelerator chips, to cater the growing demand for machine learning (ML), natural language processing (NLP) and generative AI applications. AI models like ChatGPT, Perplexity and Claude requires high-speed computational power, and CPUs alone are no longer sufficient enough to handle these complex computations efficiently. As a result, the industry is moving towards the adoption of AI-accelerator chips.
   
• The shift towards AI-driven data centers is expected to create new opportunities for players as they can focus on development of high-performance AI accelerator that in increasing computational efficiency.
   

Datacenter Chip Market Analysis

The datacenter chip industry based on the chip type is bifurcated into central processing unit (CPU), graphics processing unit (GPU), field-programmable gate array (FPGA), application specific integrated circuit (ASIC) & others.
 

• The CPU market accounted for USD 4.7 billion in the year 2024. The demand for this market is attributed due to the growing cloud expansion, strong processing power for data analytics, and the shift of IT infrastructure to cloud technologies. As these chips are vital for systems operation and task management, they are highly used in electronic devices such as smartphones, tablets, and computers. The growing demand for AI application pushes the growth of CPU segment as they are essential for data processing and are able to handle a variety of tasks.
   
• The GPU market is projected to reach USD 20.2 billion by the year 2034. the segment growth is attributed to growing application of GPUs for AI/ML training, data analysis and rendering complex visualizations pushes the demand for GPU type chip in datacenter chip market.
   
• The FPGA market is projected to grow at a CAGR of 14% during the forecast period. The increasing demand for FPGA market is because of the rapid adoption of these chips in large-scale data centers. These chips offer flexibility and scalability advantages and can be easily customized at hardware levels by adding modules or chips. Moreover, the increasing demand for reconfigurable hardware to cater the evolving workload further propel the growth of this segment in the market.
   
• The ASIC market accounted for USD 2.5 billion in the year 2024. The market growth is attributed to high advantages of ASIC compared to other such as increased efficiency and improved performance is expected to increase their demand form BFSI industry.
   

The datacenter chip market based on the vertical industry is categorized into BFSI, government, IT & telecom, transportation, energy & utility, and others.
 

• The BFSI industry held 26.7% of the total market share in the year 2024. The increasing reliance on high-speed data processing, stringent security needs, and increasing adoption of complex features such as blockchain technology are driving significant growth in the BFSI industry. These chips offers reliability, security and efficiency in financial services where speed and data protection is critical. Furthermore, the expansion of fintech and digital banking services boosts the growth of datacenter chip in BFSI sector.
   
• The government industry is projected to reach USD 10.5 billion by the year 2034. The growth of this industry is attributed to growing need for secure chips which ensures data-storage and encryption to manage the citizen data and provide online services. Additionally, the growing smart city initiatives which demands secure and reliable data transmission, supports the growth of this segment in the market.
   
• The IT & telecom industry held 24.9% of the total market share in the year 2024. The major factors driving growth in this segment include the rapid development of 5G infrastructure along with the growing use of AI and ML technology in the telecom and IT infrastructure. Moreover, the shift towards cloud services which requires lower latency for real-time cloud computing is fueling the growth for advanced data center chips in this segment.
   
• The transportation industry is projected to grow with a CAGR of 13.2% during the forecast period. The growth of datacenter chip market in the transportation industry is because of the increasing demand for autonomous and connected vehicles, which rely on advanced datacenter chips for processing real time sensor data. Additionally, the rapid adoption of AI in smart traffic management for transportation network is further pushing the growth of datacenter chips in the transportation industry.
   
• The energy & utility industry held 11.7% of the total market share in the year 2024. The rapid adoption of datacenter chips for enhanced power management, grid reliability and AI-driven predictive maintenance are some of key growth drivers of the market in this industry. Moreover, the implementation of AI for predictive maintenance and forecasting for powerplants propels the demand for datacenter chips in this segment.
   

The datacenter chip market based on the data center size is categorized into small & medium size data center and large size data center.
 

• The small & medium datacenter segment is projected to reach USD 21.8 billion by the year 2034. The rapid expansion of 5G technologies and AI powered application are pushing the growth for small & medium-sized datacentres. Moreover, small and medium scale enterprises demand cost-effective and efficient data center chips with high performance and low power consumption. Many companies are adopting cloud-based services which demand compact but powerful data centre chips.
   
• The large-scale datacenter segment is projected to grow with a CAGR of 15.6% during the forecast period. The surge in global traffic network and cloud-based services which require high speed computing infrastructure is pushing the demand for large scale data centers. Additionally, Tech giants like Google cloud, Amazon AWS and Microsoft are rapidly expanding their large-scale data centers to cater the growing demand for high-performance and AI optimized chips.
   

The North America region held 37.2% of the global datacenter chip market share in 2024. The growth of the market in the region is attributed to increasing demand for AI & ML applications along with rapid adoption of cloud computing technologies. Major countries of the region are heavily investing in AI driven application and real time data processing, which propel the growth in the market.
 

• The U.S. dominated the datacenter chip market and accounted for USD 4.4 billion in 2024 and is expected to grow at a CAGR of 15.4% during the forecast period. The growth of market in the U.S. is attributed to the growing adoption of cloud computing technologies and the increasing government’s investment towards semiconductor manufacturing. For instance, the U.S. government allocated USD 300 million in funding for to boost the nation’s semiconductor packaging.
   
• The Canada datacenter chip industry is anticipated to grow at a CAGR of over 13.4% during the forecast period. The rapid adoption of smart grid infrastructure and advancement in cloud computing technology are the key drivers for market in Canada. Moreover, the government’s increasing investment towards smart city initiative and digital transformation is fuelling the growth of market.
   

The Europe region held 21.3% of the global datacenter chip market share in 2024. Major countries such as Germany, Italy, France are leaders in AI driven datacentres and cloud computing infrastructure. Additionally, the region’s focus on renewable energy management and the push for advanced industrial automation is further pushing the growth of PLC market in the region.
 

• The datacenter chip market in Germany accounted for USD 1.1 billion in 2024. The increasing adoption of cloud computing technology and focus on energy efficient chip are they key growth drivers in the country. These cloud computing technologies demand high-performance chips, which further pushes the growth of datacenter chips market in the region.
   
• The UK datacenter chip market is anticipated to grow at a CAGR of over 15.5% during the forecast period. The UK fintech industry demands advanced data center chips for reliable connection and blockchain technology, which is pushing the growth of market. Government’s increasing investment towards development of traffic automation and smart city infrastructure is driving significant growth in market.
   
• The datacenter chip market in France is predicted to reach USD 1.7 billion by 2034. The growth of market is attributed to rapid expansion of 5G infrastructure, which demands energy efficient data processing solutions. Additionally, the growing demand for AI accelerator chips in cloud computing technology across several industries such as aerospace and pharmaceuticals is pushing growth of the market in the region.
   
• The Italy industry accounted for USD 223.5 million in 2024. The growth in the region is attributed to growing investment from government for high performance AI driven chips. Moreover, the rapid adoption of AI powered cloud computing chips across automotive and manufacturing industry for precise and efficient production, propels the growth of market in the region.
   
• The Spain datacenter chip market is anticipated to grow at a CAGR of over 11.7% during the forecast period. The market in Spain is growing due to increasing government’s investment towards development of renewable energy sources which demand datacenter chips for data analytics and predictive maintenance. Moreover, the government’s push for advanced cybersecurity and smart city initiatives are driving significant growth of market in the region.
   

The Asia-Pacific region held 32.7% of the global datacenter chip market share in 2024. The increasing adoption of AI & high-speed computing coupled with the increasing demand for advanced semiconductor manufacturing are the key growth drivers in the region.
 

• The Japan market accounted for USD 1 billion in 2024. Japan has a highly developed electronic and semiconductor industries which demands AI powered processor for cloud computing coupled with increasing demand for real-time data processing and government’s investment towards 5G infrastructure further drives the demand for advanced data center chip solutions.
   
• The datacenter chip market in China is predicted to reach USD 8.9 billion by 2034.  The government’s investment towards hyperscale datacenter and continuous expansion of 5G infrastructure are some of the key growth drivers. Moreover, the government’s push towards domestic semiconductor chip production coupled with smart city initiatives is pushing significant growth for advanced datacenter chips.
   
• The India datacenter chip market is anticipated to grow at a CAGR of over 19.3% during the forecast period. The market in India in gaining significant traction, due to growing 5G infrastructure and industrial automation. Government’s investment towards development of metro rail and smart infrastructure is fuelling the demand for advanced datacenter chips for real time data processing in transport management. Additionally, initiatives like Make in India promotes domestic semiconductor manufacturing, which propels the growth of market in the region.
   
• The ANZ datacenter chip industry accounted for USD 743 million in 2024. The rapid adoption of AI driven cloud computing in fintech industry demands high performance computing chips which pushes the growth of datacenter chips. Furthermore, the region has an inclination towards renewable energy and smart grid solutions which is driving adoption of low power datacenter chips for enhanced power management.
   
• The South Korea datacenter chip market is anticipated to grow at a CAGR of over 15% during the forecast period. The expansion of smart factories and semiconductors manufacturing are some key growth drivers in the region. Several market leaders like Samsung and SK Hynix are leading in AI chip development. Moreover, there is an increasing demand for AI driven processor for cloud computing and autonomous vehicle technology, which promotes the growth of the market in the region.
   

The Latin America region held 5% of the global datacenter chip market share in 2024. The increasing demand for cloud computing technology and automation in various industry drives the demand for the market in the region.
 

• The Brazil market is anticipated to grow at a CAGR of over 13% during the forecast period. The growing demand for datacenter chip towards agriculture and logistics to optimize supply chain and automate large scale operations is driving significant growth for the market. Additionally, the rapid expansion of 5G infrastructure to improve connective and enable advanced AI features, propels the demand for market in the region.
   
• The datacenter chip market in Mexico is predicted to reach USD 658.6 million by 2034. The growing demand for automation in manufacturing process of several industry such as automotive manufacturing and electronics production is pushing the demand for the AI enhanced processors. Companies are adopting advanced datacenter chips for real time data processing and high-speed cloud computing.
   

The MEA region held 3.7% of the global datacenter chip market share in 2024. The growth of this region is attributed to increasing government’s investment for AI driven analytics coupled with development of smart city initiatives.
 

• The South Africa market accounted for USD 92.2 million in 2024. The growth of this region is attributed to increasing adoption of AI driven analytics in fintech industry. Additionally, the country is witnessing rapid growth in cloud service as market leaders such as Huawei Cloud continues to expand its business, which pushes the demand for datacentres chips for low power and high processing datacenter chips in the region.
   
• The datacenter chip industry in UAE is predicted to reach USD 375.4 million by 2034. The increasing government’s investment towards smart city development is pushing the growth for market. The country continues to implement AI driven analytics for advanced processing and cloud computing, the demand for market in region is set to grow.
   
• The Saudi Arabia datacenter chip market is anticipated to grow at a CAGR of over 9.3% during the forecast period. The growth of market in Saudi Arabia is due to the country’s focus on Vision 2030 for digital infrastructure and AI powered infrastructure. Moreover, government’s increasing investments towards development of smart cities fuels the demand for market.
   

Datacenter Chip Market Share

The datacenter chip industry is highly competitive and fragmented with the presence of established global players as well as local players and startups. The top 5 companies in the global market are Intel Corporation, Nvidia Corporation, Advanced Micro Devices Inc, Samsung Electronics Co. Ltd, and Broadcom Inc., collectively accounting for share of over 25%. Major key leaders of the market are investing in AI accelerator chips solutions and cloud-based chips to enhance real time data monitoring and operational efficiency for predictive maintenance significantly reducing the downtime. The next-generation datacenter chips are focusing on the higher processing speed capabilities and AI driven workload to cater the growing demand for cloud computing technology, hyperscale data centers and edge AI applications while delivering high efficiency and scalability.
 

The rapid adoption of AI and ML in cloud computing technology is fuelling the demand for the advanced AI driven datacenter chips which can optimize the process ensuring maximum performance and efficiency. AI powered predictive analytics and automation in datacenter are improving efficiency and reducing operational costs around several industries. Additionally, Government’s initiative such as U.S. CHIPS Act and Industry 4.0 adoption in Europe are further pushing investment towards domestic datacenter chips manufacturing and to strengthen regions competitive landscape.
 

NVIDIA Corporation, a global leader in the datacenter chip market and offers high performance GPUs for AI and ML application within datacenter. Moreover, the firm serves a wide range of customers ranging from hyperscale cloud provider to enterprises. The company continuously offers advanced GPUs for enhanced performance and features, maintaining its competitive edge.
 

Huawei Technologies Co Ltd, a close competitor in the market focuses on building efficient and low carbon data centers. The company offers advanced hybrid cloud solutions with its third-generation semiconductor technology. Additionally, the company benefits from increasing investment from Chinese government towards domestic semiconductor manufacturing
 

Datacenter Chip Market Companies

The datacenter chip industry features several prominent players, including:

• Huawei Technologies Co., Ltd.
• NVIDIA Corporation
• Taiwan Semiconductor Manufacturing Company Limited
• Intel Corporation
• Broadcom Inc.
• GlobalFoundries Inc.
• Samsung Electronics Co. Ltd.
   

Datacenter Chip Industry News

• In March 2022, Nvidia launched their H-100 data center chips catering to the growing demand for generative AI training and inference. These advanced GPU chips can offer twice the performance compared to previous-gen CPUs and are specifically designed for AI and high-performance computing.
   
• In December 2023, AMD introduced their MI 300 series, an AI accelerator chips and is competing with the Nvidia. These advanced chips are CPU-GPU hybrid chips and are exceeding Nvidia’s flagship chip H100 in memory and AI performance capabilities.
   
• In December 2024, Rebellion and SAPEON has entered into a merger and are unified under the name “Rebellions” and is the Korea’s first AI chip unicorn. The firms aims to offer energy efficient AI accelerator chips for generative AI workloads.
   

The datacenter chip market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2021 to 2034, for the following segments:

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Market, By Chip Type

• Central Processing Unit (CPU)
• Graphics Processing Unit (GPU)
• Field-Programmable Gate Array (FPGA)
• Application Specific Integrated Circuit (ASIC)
• Others

Market, By Vertical Industry

• BFSI
• Government
• IT and telecom
• Transportation
• Energy & utilities
• Others

Market, By Data Center Size

• Small and Medium size
• Large size

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • Saudi Arabia
  • UAE
  • South Africa
  • Rest of MEA