The global data center accelerator market size was valued at USD 6.59 billion in 2022. It is projected to reach USD 23.15 billion by 2031, growing at a CAGR of 14.98% during the forecast period (2023-2031).
A data center accelerator is a hardware device or software program that enhances computer performance by processing visual data. Datacenter accelerators help to improve data center performance by optimizing the use of artificial intelligence (AI)-based services and increasing the demand for consumer-focused data to power AI-driven data centers. Accelerators are designed explicitly for data centers to improve performance, address customer issues, increase power efficiency, and reduce costs.
High-performance computing (HPC) data centers run by organizations like HP and Dell EMC are putting a lot of emphasis on integrating deep learning-based accelerators despite the enormous efforts made by chipmakers to produce accelerators. This is primarily attributable to the rise in consumer data generation and utilization of AI-based services, which raised the demand for data centers focused on AI. In addition, AI can offer customized services by comprehending customer behavior information derived from product reviews, CRM systems, and social media comments. With the integration of AI and machine learning technologies, HPC solutions have played a crucial role in transforming a wide range of industries, including financial services, manufacturing, healthcare, oil and gas, and research and educational institutions. These solutions can perform complex calculations and process data up to quadrillions per second.
Although accelerators provide data center operators with several advantages, including a way to offload computationally intensive portions of applications and a way to use less power and cooling resources, their growth is also constrained by factors like a lack of AI hardware experts as cost and infrastructure issues. In addition, expert data scientists and developers are required to adapt current ML-enabled AI processors. There is a shortage of workers with in-depth knowledge of AI because the technology is still in its early stages of development. The early years of the projection period are anticipated to see a continued strong impact of this restraint.
Prefabricated silicon devices called FPGAs (Field Programmable Gate Arrays) can be electrically programmed to transform into nearly any digital system after fabrication. They are a collection of reconfigurable logic blocks (CLBs) connected by programmable interconnects, and they may be manufactured and then reprogrammed to meet specific application needs. The fact that FPGA chips combine the greatest features of processor-based systems and application-specific integrated circuits drives their widespread acceptance across all industries (ASICs). Additionally, FPGAs offer more affordable solutions and a shorter time to market than ASIC, which often needs a lot of resources (both in terms of time and money) to create the first device for low-to-medium volume productions. FPGA in accelerators enhances real-time inference throughput compared to high-end CPUs and lowers latency compared to GPUs when running real-time inference applications.
The global data center accelerator market is segmented by type and application.
Based on type, the global data center accelerator market is bifurcated into CPU (central processing unit), GPU (graphics processing unit), FPGA (field-programmable gate array), and ASIC (application-specific integrated circuit).
The CPU (central processing unit) segment is the highest contributor to the market and is estimated to grow at a CAGR of 8.08% during the forecast period. The central processor of a computer system is called the CPU. To meet the demands of high-performance computing, data centers have developed from physical servers to virtualized systems; necessitating improved CPUs. Data centers have traditionally been dominated by CPU-based computing, but as next-generation workloads in fields like Big Data and streaming analytics, artificial intelligence (AI), the internet of things (IoT), genomics, and network security emerge, CPUs now have to deal with a variety of new algorithms, varying data types, and varying file sizes. In addition, Machine Learning (ML) workloads are frequently run on CPUs, and microprocessor manufacturers constantly improve their processors by adding new instructions and data formats to speed up ML workloads. This broadens the use of CPUs for ML workloads. For instance, the Ampere Altra processor started delivering the first 80-core server CPU and the first cloud-native CPU for contemporary cloud and edge computing data centers.
An electronic circuit known as a graphics processing unit (GPU) is created to quickly manipulate and change memory to speed up the production of images in a frame buffer that is then delivered to a display device. Mobile devices, desktop computers, workstations, edge data centers, automobiles, and video game consoles use GPUs. Game applications in hardware, including gaming consoles, laptops, and mobile devices, are principally responsible for increasing the global need for GPUs. In addition, the global market for dedicated GPUs is dominated by two vendors, NVIDIA and AMD; their combined market shares represent nearly the entire market. The increasing use of GPU in mobile devices, such as smartphones and tablets, will likely boost market growth throughout the projection period. In the case of integrated GPU, these vendors lose a large part of the market to Intel and other vendors active in the field. Vendors like AMD, Qualcomm, ARM, and Imagination fiercely fight in this market.
Based on application, the global data center accelerator market is bifurcated into high-performance computing, artificial intelligence, and other applications.
The artificial intelligence segment owns the highest market share and is estimated to grow at a CAGR of 14.23% during the forecast period. Enterprises are integrating machine learning applications, including image and speech recognition, CPUs, and GPUs, as firms increasingly use artificial intelligence (AI) technologies to distinguish and enhance their operations and offers. They are more frequently relied upon for real-time training inference that is quicker. In addition, modern data centers are vital to addressing some of the most pressing global issues, from scientific advancements to artificial intelligence (AI). These cutting-edge data centers are changing to improve workloads like artificial intelligence and increase networking bandwidth.
In order to solve complex problems in science, engineering, or business, high-performance computing most commonly refers to combining computing power in a way that yields performance significantly higher than what could be obtained from a typical desktop computer or workstation. HPC has played a crucial role in academic research and industry innovation for many years. Engineers, data scientists, designers, and other researchers can solve problems with HPC in a fraction of the time and cost of traditional computing.
Asia-Pacific Dominates the Global Market
The global data center accelerator market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
Asia-Pacific is the most significant shareholder in the global data center accelerator market and is expected to grow at a CAGR of 20.24% during the forecast period. Since the Asia-Pacific area is undergoing substantial investment for a better and faster IT infrastructure, the region is expected to be the main contributor of data centers accelerator to the global market. For instance, according to Cisco Systems, Australia alone accounts for 4% of the worldwide data center market, with major international companies like AirTrunk and Equinix developing hyper-scale data centers in Melbourne and Sydney. It is anticipated that these advancements will fuel market expansion. Furthermore, the market's participants are attempting to expand their ability to compete through various growth tactics, including product innovation, new partnerships, investments in production facilities, increased R&D, and market research in foreign countries. Similarly, government initiatives like Digital India, Make in India, Smart Cities, and the strong resurgence of growth-related projects across various verticals, including e-commerce and retail, manufacturing, IT/ITeS, BFSI (primarily non-critical workloads), and emerging verticals, including education, healthcare, hospitality, and communications and media, are all contributing to the increase in data centers in India.
North America is expected to grow at a CAGR of 15.29% during the forecast period. The US Army Engineering and Support Center, Huntsville Information Technology Services High-Performance Computing (HPC) program supports the HPC Modernization Program (HPCMP) of the US Depar tment of Defense by purchasing various HPC systems (supercomputers) with more than 5 PetaFLOPS of computing power and more than 50 PetaBytes of mass storage archives (DOD). The HPCMP initiative takes advantage of and solidifies American leadership in supercomputing, communications, and computational modeling to hasten the development and conversion of breakthrough defense technology into superior warfighting capabilities. In addition, the American economy directly benefits from the HPC sector. With most of the world's top HPC machines using American-developed microprocessors, the industry produces a net trade surplus regardless of which manufacturers put the HPC systems together.
Additionally, most of the world's hyperscale data centers are located in this region due to the United States' booming HPC sector. Because of this, the US market receives most of the supply from Cisco, IBM, NVIDIA, and Intel. Also, Canada is expanding and offering more data center infrastructure solutions due to rising demand for effective data centers, initiatives for environmentally friendly data center solutions, and a significant increase in power density in the region.
Europe is a significant driver and adopter of contemporary technology and is home to some of the most significant technology hubs in the world. As more organizations and consumers choose cloud services over personal computer capacity, there is an increase in the demand for digital services and computing power in Europe. Large-scale cloud data centers are anticipated to increase and mostly replace server closets to meet the demand. In addition, big data, cloud usage, and IoT are the primary forces behind the expansion of data centers in the area. Large-scale data centers are essential for demand response due to their enormous electricity demand and intrinsically variable productivity. Over the past few years, the region has seen a significant increase in investment in the data center industry. For instance, Microsoft alone recently increased the capacity of its data centers in Europe. The catalyst is also the expansion of European data compliance requirements, which is expected to expand 48% annually and account for 23% of worldwide interconnection bandwidth.
The need for data centers is growing in Brazil. The increasing demand for data centers is driving the market for accelerators. Numerous cloud-based service provider organizations are investing in expanding their capacity in the Latin American region, which reflects this trend. Latin America's largest and fastest-growing data center market is Brazil. ODATA, one of the primary Latin American providers of data centers for multinational organizations, is well-positioned to make the most of this trend with a capacity of up to 15.6 megawatts (MW). Microsoft and other businesses have opened their first data centers in the Middle East. Additionally, intelligent data centers revealed plans to build data centers in the Middle East as the region's transition to a digital infrastructure picks up speed, especially with the quick uptake of AI applications.
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