Micro Server IC Market - By Processor Type, By Component, By Application, By End Use Industry, Forecast 2025 - 2034

Micro Server IC Market Size

The global micro server IC market size currently accounts for USD 1.7 billion, with a volume of 59 million units in 2024 and is projected to grow at a CAGR of 13.3% from 2025 to 2034, driven by growing demand for citizen services such as e-governance, e-transportation, rise of contactless payment system and expansion of smart IoT applications.
 

The Trump administration's tariffs on Chinese imports, including semiconductor components, disrupted the market by increasing production costs for U.S. tech firms reliant on Chinese-manufactured chips. Many companies faced supply chain bottlenecks, forcing them to either absorb higher costs or pass them onto consumers, dampening demand for cost-sensitive server solutions. Some manufacturers shifted sourcing to Vietnam, Taiwan, or Mexico to avoid tariffs, but this led to delays and higher logistics expenses. Over time, the tariffs accelerated efforts to onshore semiconductor production in the U.S., though the Micro Server IC sector still grapples with inflated prices and fragmented supply chains as a legacy of the policy.
 

The world-wide demand for micro server integrated circuits is fuelled greatly by the growing use of the IOT devices. As the use of IoT technology grows in almost all segments of the economy, there is an increasing need for powerful yet compact and energy-efficient computational capabilities for data processing and management. Due to the small size and ultra-low power consumption, micro server ICs are well matched to achieve these objectives.
 

According to Statista, the number of IoT devices is expected to grow from 15.9 billion in 2023, to over 32.1 billion by 2030 nearly doubling in just 7 years. This IoT growth necessitates robust and adaptable micro server infrastructures. This increase in adoption of IoT devices increased the demand and supply for micro server ICs as these components provide the infrastructure to enable the storage and processing capabilities of the world.


The micro server IC market is experiencing rapid growth due to the mounting demands of edge data computing. Edge computing requires large amount of data to be processed as close to the source as possible in order to minimize delays and maximize efficiency in real-time data processing. The modular architecture of micro server integrated circuits makes them a perfect fit for these localized computing environments, since they are small and use very little power.
 

For instance, the incorporation of micro servers in self-driving cars that require data to be processed almost instantly in a varied dynamic environment. According to Statista, the global market for edge computing in the United States alone is expected to grow to about 45.4 billion U.S. dollars by 2028, reflecting a shift in paradigm regarding reliance over edge computing resources. This increase in spending highlights the growing confidence in edge computing technologies. Hence, the increase in usage of edge computing technology is raising the need for micro server integrated circuits as they provide resources for proper and efficient local data computation in many industries.
 

Energy efficiency is now a top priority for enterprises and data centers seeking to contain costs and environmental footprint. Micro server ICs are engineered to draw far less energy than server processors, which is one of the reasons these are now an increasingly popular choice with energy-saving organizations. Micro server chips, for instance, generally possess a less than 45W thermal design power (TDP), with some going sub-10W, in contrast to the 90-plus TDP of chips found in high-end servers. This reduced energy use means reduced operating costs coupled with support for sustainability targets. Energy efficiency is therefore one major driving force in favor of micro server IC growth in the market today.
 

Micro Server IC Market Trends

• The growth of the cloud and the proliferation of data centres are impacting the market remarkably. During the first half of 2024, the new data center installation announcements increased threefold in the USA on a year-on-year basis for the corresponding period, with an additional planned capacity of almost 24 gigs. This boom is fueled by the US plan to become a leader in AI, which is in-turn forcing data centre builders such as Amazon, Meta, Google, and Microsoft to spend heavily on data center infrastructure.
   
• Micro server ICs greatly enhance the performance and power efficiency of data centres. Their small form factor and energy efficiency make them best suited to meet the dynamic cloud infrastructure growth requirements. Also, the increased usage of cloud services is inevitably culminating in increased reliance on micro server ICs, which will further drive innovations and expansion of the market.
   
• New advancements in semiconductor manufacturing technology are transforming the micro server IC. For instance, Intel's 18A process technology, which integrates RibbonFET gate-all-around transistors and PowerVia architecture, is a notable advancement in the competitiveness and effectiveness of the microchip performance and efficiency. These advancements support the design of ever smaller, faster, and more energy-efficient micro server ICs, which align with the contemporary requirements of today’s computing ecosystem.
   
• The announcement by AMD of the MI325X AI chip with exceptional performance also underscores the level of competition being pushed in other sectors of semiconductor technology. This innovation drives the performance of micro server ICs, as well as increases their ubiquity across multiple sectors.
   
• The rapid expansion and global adoption of edge computing applications occur as a major event for the micro server IC industry. Edge computing brings the data processing closer to the point of collection, which therefore minimizes the latency and bandwidth use, thus improving the data processing efficiency.
   
• The global edge computing market is expected to reach 350 billion USD by 2027, as per the report from Statista. This trend highlights that solutions based on edge processing are being incorporated into a plethora of industries. Further the introduction of new edge platforms for scaling AI application by Intel also showcases the activity in this area. Micro server ICs such as trimodal routers are of small size and ensure low power consumption, which makes them ideal for deployment in edge computing environments. Processes that require high level responsiveness, such as autonomous vehicles, industrial automation, and smart cities, greatly require local data processing.
   

Micro Server IC Market Analysis

Based on processor type, the market is segmented into Intel-based micro server ICs, ARM-based micro server ICs, AMD-based micro server ICs, and others. The Intel-based micro server ICs segment accounts for the highest market share of 35% in 2024, and the ARM-based micro server ICs segment is the fastest-growing segment with a CAGR of 14.5% during the forecast period.
 

The micro server ICs based on Intel architecture is projected to reach USD 587 million in 2024 with a CAGR growth of 13.7%. Intel-based micro server ICs are still vital components in enterprise grade data servers due to their strong performance and seamless integration with legacy systems. Intel has showcased its latest Xeon processors reaffirming its path to recovery in the server market and continuing to enhance micro servers to become enablers in improved performance, efficiency, and reliability of workloads. The race by enterprises to modernize data centers will maintain the demand for Intel-based micro server ICs, and a positive trajectory of growth in the market for years to come.
 

The ARM-based micro server ICs segment accounts for USD 484 million in 2024 and is the fastest-growing in the market, compounding at an annual growth rate of 14.5%. ARM-based micro server ICs are gaining traction due to their energy efficiency and scalability, making them suitable for cloud and edge computing applications. ARM's Neoverse platform has been adopted by major hyperscalers, with projections indicating that nearly 50% of compute shipped to top hyperscalers by 2025 will be ARM-based. This shift reflects a growing preference for ARM architectures in data centers, driven by the need for power-efficient solutions. The increasing adoption of ARM-based micro server ICs is poised to significantly influence the market's trajectory.
 

Based on component, the micro server IC market is segmented into hardware and software. The hardware segment accounts for the highest market share of 69.1% in 2024, and the software segment is the fastest-growing segment with a CAGR of 14.3% during the forecast period..
 

The hardware segment accounts for USD 1.1 billion in 2024 and is expected to grow with a CAGR of 12.9%. The hardware portion, consisting of a microprocessor, memory, and the storage components of a micro server IC constitute its basic building block. NXP Semiconductors offers an assortment of interface ICs meant for servers, such as I2C and I3C bus buffers, multiplexers, and voltage level translators. With the continuous development of data center and edge computing, there is an expected increase in the need for sophisticated hardware components in micro server ICs, which will boost market growth.
 

The software segment accounts?for USD 516 million in 2024 and is the fastest-growing segment in the market, compounding at an annual growth rate of 14.3%. Software is vital for providing virtualization, workload management, and various security features on a micro server's IC. Along with the shift towards software defined everything, the software component of a micro server IC is expected to grow significantly, where the solutions will help in the development of advanced infrastructure, further accelerating the growth of the market. ?
 

Based on application, the micro server IC market is segmented into data centers, cloud computing, edge computing, enterprise IT, web hosting, and others. The data centers segment accounts for the highest market share of 22.7% in 2024, and the cloud computing segment is the fastest-growing segment with a CAGR of 16.6% during the forecast period.
 

The data centers segment accounts for USD 107 million in 2024 and is expected to grow with a CAGR of 14.8%. Micro servers allow for the miniaturization of components within server units due to their low power requirements, making them perfect for remote data centers. Each region of modern data centers is designed to operate with maximum energy efficiency and minimum spatial requirements, sustaining workloads that can be completed within their processing power. The anticipated growth in performance-driven, energy-efficient data centers will likely reinforce demand for micro-sever ICs due to their innovative design.
 

The cloud computing segment accounts for USD 88 million in 2024 and is compounding at an annual growth rate of 16.6%. The expansion of cloud technologies demands dynamic and powerful server landscapes. Amid cloud computing environments, microserver ICs provide optimal scalability and resource efficiency. They streamline data retrieval and storage operations, responding fluidly to the requirements of cloud applications. As microserver ICs become more prevalent in the equipment of service and private enterprises due to the rising popularity of cloud technologies, the corresponding demand for microserver ICs will further drive market expansion.
 

Based on end-use industry, the micro server IC market is segmented into IT & telecom, BFSI, media & entertainment, healthcare, government, education, retail & e-commerce, and others. The IT & telecom segment accounts for the highest market share of 20.3% in 2024, and the healthcare segment is the fastest-growing segment with a CAGR of 14.9% during the forecast period.
 

The IT & telecom segment accounts for USD 340 million in 2024 and is expected to grow with a CAGR of 13.9%. IT and telecommunication require cutting edge technology that can not only store data but also facilitate smooth movement of different kinds of data, while offering instantaneous access to data as well as heightened business productivity. Micro server ICs have both the processing requirements and energy-efficient capabilities that serve these purposes. Their use within networks increases operational efficiency in data handling as well as fosters an increase in the provision of telecom services. Such dynamics becoming prevalent even prior to the 5G networks severing the telecommunications infrastructure indicates that the inclusion of micro server ICs can be a critical link to market advancement.
 

The healthcare market accounts for USD 324 million in 2024. Within the data framework, healthcare units now utilize automated systems which integrate different departmental functions into a central unit with the objective of improving overall intelligent processing, thus requiring resilient, fast and ultra-secure computing resources. Micro server ICs provide real-time information processing, computerized health record support, and interaction through telemedicine. Other service providers, such as Supermicro, have leveraged edge computing for the healthcare sector, which enables patients to better manage their data, thus allowing better focus on their primary functions and subsequently improving the patient outcome. The rising embrace of digital health solutions is likely to increase the micro server IC needs within the healthcare world.
 

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Based on region industry the micro server IC market is segmented into North America, Europe, Asia Pacific, Latin America and MEA. In 2024, the North America region accounted for the largest market share with over 32% of the total market share, and Asia-Pacific is the fastest-growing region, growing at a CAGR of 15.2%.
 

The market for micro server IC has been expanding steadily in the United States, achieving a CAGR of 13.2% and reaching a valuation of USD 437 million in 2024. With the growth in the use of cloud services and AI applications, new data centers are being built throughout the United States. There is an unprecedented expansion within the infrastructure of the data centers and the micro server IC’s market. The emerging infrastructure showcases the requirement for energy-efficient, scalable servers, highlighting the importance of micro server ICs.
 

In Germany micro server IC market has been expanding significantly, achieving a CAGR of 14.2% and reaching a valuation of USD 82 million in 2024. Germany has taken an initiative towards industrial computing in key sectors such as automotive and healthcare, with initiatives such as Industry 4.0. With the nurtured innovation and the focus on the production of circuits, Germany’s manufacturing and automation networking shows a growth trend. These trends are set to transform Germany into a leader of fast adaptive innovation along with adding the demand for micro server ICs in the regions.
 

In China, the market has been expanding, achieving a CAGR of 16.3% and reaching a valuation of USD 205 million in 2024. China’s integration of self-sufficiency policies with the rapid development of technology is affecting the market. The country’s integrated circuit industry is expected to grow significantly due to the increased spending on cloud services and data centers. The support which is provided for the development of homegrown technologies is beneficial for the adoption of micro server ICs and fulfils the aims towards the digital transformation of China.
 

The micro server IC market in Japan has been experiencing steady expansion, achieving a compound annual growth rate of 13.1% and attaining a valuation of USD 56 million in 2024. Japan is vigorously modernizing its regional digital infrastructure, which includes the enhancement of smart manufacturing capabilities and 5G network expansion. These strategies are creating new opportunities for compact and powerful computing technologies. The intense focus on the application of modern technologies for industrial and communication processes is boosting the micro server IC innovation in the country. The adoption of micro server ICs is expected to rise as Japan advances its technological development, fueling growth in the market.
 

In South Korea, the market is expanding rapidly, achieving a CAGR of 16.5% and reaching a value of USD 50 million in 2024. The development of South Korea's semiconductor industry, especially the production of memory chips, makes it a major participant in the micro server IC industry. The South Korean government, through policies and incentives, is augmenting the nation's capabilities in IC fabrication. There is also effort being made toward new technologies such as 5G, AI, and IoT which is creating a demand for advanced integrated circuits. All these factors contribute to South Korea's adoption of micro server ICs, further solidifying its presence in the international arena.
 

Micro Server IC Market Share

The global market is dominated by Intel Corporation, Infinera Corporation, and Cisco Systems, Inc. Intel Corporation is the global leader of the market with the largest share, and the top three players collectively account for 23.7% of the market share. With rising competition in the field, Advanced Micro Devices Inc. (AMD) is capturing the market with its EPYC processors due to their scalability and cost-effectiveness, especially in micro server applications.
 

Cisco, a prominent player in the networking market, is now entering into the micro server market with cutting edge, energy-efficient solutions. The company recently incorporated advanced micro server architectures into their unified computing systems (UCS) platform aimed at serving edge computing and IoT-based needs. The new addition helps strengthen the ultra-low power, high density data center capabilities.
 

Micro Server IC Market Companies

The list of prominent players operating in the micro server IC industry includes:

• Intel Corporation
• Infinera Corporation
• Cisco Systems, Inc.
   

Intel Corporation is one of the world’s largest semiconductor inventors. It also has a vast array of microprocessors and other relevant technologies. In the market, Intel has a wide array of offerings specifically designed for high-efficiency computing and energy-efficient environments. The Xeon D series particularly stands out for micro server applications as it offers integrated solutions with high performance and low power consumption.
 

Furthermore, the Sierra Forest subset of Intel’s sixth-generation Xeon Scalable processors is designed to cater to cloud and edge computing workloads. Intel relies on achieving breakthroughs on new and emerging market opportunities through advanced manufacturing, new product innovations, and strong competition emphasis. With emerging competitive market challenges, Intel’s directed goals are to improve performance, efficiency, enhance scalability, and reduce energy consumption in the company’s micro servers.
 

Micro Server IC Market News:

• In May 2024, Marvell launched its new Alaska PCIe retimer line with emphasis on enhancing interconnects within AI and general-purpose servers. These retimers support PCIe Gen 6 and are fabricated with 5nm PAM-4 technology, seeking to improve compute fabric reliability in data centers through effortless inter-component communication between GPUs, CPUs, and AI accelerators.
   
• In January 2025, Marvell integrated co-packaged optics (CPO) technology into proprietary AI accelerators to enhance bandwidth, performance, and efficiency in AI training clusters and inference servers. This offering is built upon Marvell's 6.4 Tbps 3d Sipho engine, which combines multiple components into a chiplet; this allows for direct optical scale-up network connections using Xpus. These innovations are anticipated to advance the development of scale-up servers.
   
• In August 2024, Intel Technologies announced important milestones in its Intel 18A process technology featuring ribbon-fet gate-all-around transistors and backside power-applied powering of devices. These are expected to improve the performance of an integrated interconnect device as well as the subsequent methods of connecting it, aiding in process leadership for Intel.
   

Micro server IC market research report includes an in-depth coverage of the industry with estimates and forecast in terms of revenue in (USD billion) and volume (million units) from 2021 – 2034 for the following segments:

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Market, By Processor Type

• Intel-based micro server ICs
• ARM-based micro server ICs
• AMD-based micro server ICs
• Others (e.g., RISC-V, MIPS)

Market, By Component

• Hardware
  • Microprocessor
  • Memory
  • Storage controllers
  • Network interface controllers
• Software
  • Operating systems
  • Virtualization software
  • Management tools

Market, By Application

• Data centers
• Cloud computing
• Edge computing
• Enterprise IT
• Web hosting
• Media storage

Market, By End Use Industry

• IT & telecom
• BFSI
• Media & entertainment
• Healthcare
• Government
• Education
• Retail & e-commerce
• Others

The above information is provided for the following regions and countries: 

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