DELRAY BEACH, Fla., Dec. 19, 2024 -- The global data center chip market is expected to grow from USD 206.96 billion in 2025 to USD 390.65 billion by 2030, growing at a CAGR of 13.5% from 2025 to 2030 according to a new report by MarketsandMarkets™. Data center chips have emerged as the epitome of technological growth. The growing emphasis on parallel computing in AI-based data centers is bound to drive innovation across industries such as BFSI, Healthcare, Retail, and E-commerce. In the BFSI industry, data centers are used for real-time processing and compliance, and retail and e-commerce use them for handling large volumes of customer data and supply chain management, among other things. Moreover, the growth in AI and general-purpose server shipment is likely to fuel the demand for data center chips.
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Data Center Chip Market Report Scope:
Report Coverage | Details |
Market Revenue in 2025 | $ 206.96 billion |
Estimated Value by 2030 | $ 390.65 billion |
Growth Rate | Poised to grow at a CAGR of 13.5% |
Market Size Available for | 2021–2030 |
Forecast Period | 2025–2030 |
Forecast Units | Value (USD Million/Billion) |
Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
Segments Covered | By Component, Application, Data Center Size, End User and Region |
Geographies Covered | North America, Europe, Asia Pacific, and Rest of World |
Key Market Challenge | High energy consumption by data center |
Key Market Opportunities | Emergence of FPGA-based accelerators |
Key Market Drivers | Rising focus on parallel computing in AI data center |
By Application, the natural language processing segment is projected to grow at a significant CAGR of the data center Chip market during the forecast period.
The segment for natural language processing technology is expected to grow at a significant rate during the forecast period. Applications such as chatbots, virtual assistants, language translation services, sentiment analysis, and text analytics need NLP to process and understand human languages. Since the application is very wide, huge demand has been created for powerful AI chips that could handle extensive computational requirements for NLP tasks, driving growth in the data center chip market. From the invention of large-scale language models like GPT-4 and BERT, the complexity and size of NLP models increased. For instance, last May 2024, OpenAI released GPT-40, capable of reasoning on text, video, and audio in real-time; deployment in applications from content generation to virtual assistants underlines the fast-rising demand for data center chips supporting NLP.
In enterprise end-user healthcare segment is projected to grow at a high CAGR of the data center Chip industry during the forecast period.
The adoption rate for data center chips in healthcare is currently on the rise. The medical institutions and technology companies have started spurring advanced AI capabilities for improved diagnostics, treatment planning, and personalized medicine. In this respect, the adoption of AI based data center chips in the development of large language models and other AI-driven medical applications has totally revolutionized health sectors in terms of their enabling more accurate and timely medical interventions. In October 2022, Cerebras announced it was partnering with the Mayo Clinic to develop large language models for medical applications. They created the Rheumatoid Arthritis diagnostic model using the Cerebras CS-2 to integrate patient records, DNA data, and drug information to pair patients with the most effective therapeutics. Such AI-based data center chips would thus be most critical in furthering personalized medicine, in which treatment plans are tailored for a unique genetic and medical profile for each patient within the processing of these vast data sets and intricate algorithms.
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Japan holds the second-largest market in Asia Pacific during the forecast period.
The diversity of cloud providers in Japan entering the data center business has significantly increased over the last 3–5 years. Japan, being the leader in adopting advanced communications technology, was one of the first countries to witness a surge in data center interconnect (DCI) bandwidth requirements. Due to the reliable DCI in Japan, the adoption of 5G and edge computing is very high. For instance, in February 2022, GLP announced its 900 MW data center expansion plants in Japan. This gives modular data center vendors a huge opportunity to provide reliable and efficient components for data center continuity. The market in Japan has evolved due to the emergence of international hyper-scale cloud providers. Cloud service providers like Amazon Web Services (AWS), Google, Microsoft Azure, SoftLayer, and IBM are expanding their presence in Tokyo and Osaka. Thus, the need for modular data centers is expected to rise as these hyper-scalers are driving the need for IoT and edge computing.
The major players in the data center chip companies are AMD (US), Intel Corporation (US), NVIDIA Corporation (US), AWS (US), Google (US), Samsung (South Korea), SK HYNIX Inc. (South Korea), Alibaba (China), Micron Technology (US), Monolithic Power Systems, Inc. (US) among others.
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