Accelerators, mainly used for AI applications, drove the server semiconductor and component market to 29 percent year-over-year in the third quarter thanks to AI. Dell’Oro forecasts that the accelerator market will surpass the CPU in revenues by nearly two-fold in 2023.
“The server and storage system component market is poised for an 11 percent growth for full-year 2023, primarily propelled by accelerators,” said Baron Fung, senior research director at Dell’Oro Group. “Excluding accelerators, a 27 percent decline in revenue is forecasted, attributed to reduced demand resulting from inventory adjustments by system vendors and hyperscale cloud service providers for general-purpose computing.”
Fung said, “In 2024, we anticipate strong double-digit growth in accelerator revenue.”
NVIDIA’s challengers
NVIDIA led server and storage system component revenues in the third quarter, driven by GPU accelerators, followed by Intel and Samsung. Accelerator revenues are on track to surpass CPU revenues for the first time in 2023, reflecting a shift toward accelerated computing.
Although NVIDIA currently dominates this market, the vendor could face new challengers from AMD and Intel, coupled with the emergence of custom accelerators by the hyperscale cloud service providers.
NICs, GPU rising
NIC shipments declined briefly in 1H 2023 but returned to growth in 3Q 2023, driven by increased adoption of higher-speed ports and Smart NICs, especially for accelerated computing.
GPU revenue is forecasted to achieve 70 percent growth in 2024.
“Our forecasts indicate a comprehensive recovery in the market across various categories, including CPU, memory, storage drives, and network interface cards (NICs), as vendors increase their inventories in anticipation of healthier server demand,” Fung said. “Alongside the unit growth of these component categories, we expect pricing to improve with higher demand and the transition to the next-generation server platforms.”
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