DATA CENTER ACCELERATOR MARKET ANALYSIS

The global data center accelerator market size was valued at US$ 33541.7 million in 2021 and is anticipated to witness a compound annual growth rate (CAGR) of 22.8% from 2022 to 2030. Increasing demand for cloud-based services is expected to drive the growth of the industry. The increased investment in the research and development of upcoming technology is also expected to boost growth of the market. The increasing focus on parallel computing is also expected to drive growth of the sector.

Global Data Center Accelerator Market: Regional Insights

North America is anticipated to witness substantial growth in the global data center accelerator market over the forecast period. This is owing to rise in the number of hyperscale data centers, increase in growth of IT and Telecommunication industry in the countries such as the U.S. and Canada in the region. Due to the growing number of data centers, the region is experiencing growth in terms of big data and traffic. For instance, as per the Cisco Systems, the volume of big data in the data center storage across the globe is likely to grow to 403 exabytes by 2021, and the U.S. will account for the largest share in the volume. Moreover, as per the Cloudscene, in 2019, there were more than 2,400 data centers across the U.S. Thus, these factors are adding into growth of the region in the data center accelerator market.

Furthermore, Asia Pacific is anticipated to hold a dominant share in the global data center accelerator market over the forecast period. This is due to heavy investment for the enhancement of IT infrastructure in the region. For instance, according to Cisco Systems, Australia accounts for up to 4% of the global data center market in the region, with large multinational players such as Equinix, and AirTrunk building hyper-scale data centers in Sydney and Melbourne. Moreover, the market players in the region are adoption various growth strategies such as collaborations, product innovations, and investment, which in turn is likely to support growth of the market.

Figure 1. Global Data Center Accelerator Market Share (%), By Region, 2021

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Global Data Center Accelerator Market Drivers:

Growing use of AI in HPC data centers to propel the market growth

Chipmakers are taking significant efforts to produce accelerators, and companies operating in setting up of data centers such as Dell EMC and HP are also focused on integration of deep learning-based accelerators into their HPC (high-performance computing) data centers. This is due to rise in amount of consumer data generated and growing use of AI-based services leading to rise in demand for AI-centric data centers. AI can provide personalized services as it can understand customer behavior data produced from CRM systems, product reviews, and social media comments. Thus, growing use of AI in HPC data centers is expected to fuel demand for global data center accelerator over the forecast period.

Rise in deployment of cloud-based services and data center facilities to boost the market pace

Along with the increasing demand for data around the world, the demand for data centers is also on the rise, as several cloud vendors focus on commissioning several datacenter projects and on heavy investment for the same. For instance, Amazon, a leading cloud service provider continues to heavily invest in development of data centers across the globe, specifically in emerging markets. Amazon invested US$ 1.5 billion to build two data centers in India for its AWS wing. Thus, these factors are likely to support growth of the global data center accelerator market during the forecast period.

Global Data Center Accelerator Market Opportunities:

Growing focus of parallel computing in artificial intelligence data centers is expected to offer multiple business opportunities in the global data center accelerator market over the forecast period.  Increase in the development in cloud-based services is also creating several growth opportunities in the market.  In the past few years, there has been several advancements in silicon engineering design-based products. Especially, node designs based on ASIC/FPGA has improved towards nodes of 7nm and lower. Thus, the demand for data center accelerators in increasing, which is creating growth opportunities in the market.

Moreover, increasing architectural changes is also anticipated to create growth opportunities in the global data center accelerator market over the forecast period. Transistor densities continue to increase to boost performance gains. However, this is possible when they are used more efficiently and effectively by the applications taking architectural changes and requirements for specialized accelerators that are being developed for particular workloads. There is rise in domain-specific architectures as promising solutions for addressing some these requirements. Thus, these factors are providing market players in the global data center accelerator market with several growth opportunities.

Global Data Center Accelerator Market Trends:

Rise in number of market players in the data center accelerator market is a major trend

The number of market players entering the data center accelerator industry is increasing all over the world. Moreover, the rate of investments in data center accelerators by market players is also increasing along with product innovations and demand from several end user industries. For instance, Nvidia recently launched the latest generation of its TensorRT software that can be utilized for speeding up inferencing running on top of GPUs of Nvidia. The company also announced an accelerator for inferencing in data centers based on the Turing architecture. Thus, these factors are likely to support growth of the market in the coming future.

Increasing adoption FPGAs is a recent trend in the market

Field Programmable gate arrays or FPGAs are pre-fabricated silicon device that can be turned electrically into any type of digital system. These are an array of configurable logic blocks that are connected with programmable interconnects. As these chips combine the best components of application-specific integrated circuits (ASICs) and processor-based systems, their demand and adoption is increasing in several industries. Moreover, FPGAs offer faster time and cheaper solutions compared to ASIC. Thus, the trend of increasing adoption FPGAs is likely to continue in the market during the forecast period.

Global Data Center Accelerator Market Restraints:

Lack of AI hardware experts to hamper growth of the market

AI is a complicated system, and companies need skilled professionals for development, management, and implementation of AI systems. For instance, AI system operators need awareness regarding technologies such as ML, cognitive computing, machine intelligence, image recognition, and deep learning. Moreover, integration of AI solutions with existing systems is complicated and it needs in-house R&D as well as patent filling. Smallest errors can cause failure of system or malfunctioning of solutions. Thus, lack of AI hardware experts is expected to restrain growth of the market.

Rise in infrastructural concerns to impede growth of the market

Accelerators provide several benefits to the data center operators such as a way of offloading computationally intensive sections of applications along with consumption of less power and cooling resources. However, the cost of accelerators and concerns regarding the infrastructure are hampering the market growth. Data centers need highly specialized infrastructure. This infrastructure refers to the core hardware-based or physical resources as well as components, which include all IT infrastructure devices, technologies, and equipment comprising a data center. The specialized requirement of infrastructure can sometimes become hampering factor for the growth of the global data center accelerator market.

Figure 2. Global Data Center Accelerator Market Value (US$ Mn), 2017-2030

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Global Data Center Accelerator Market Segmentation:

The global data center accelerator market report is segmented into Processor Type, and Application

Based on Processor Type, the market is segmented into CPU, GPU, FPGA, and ASIC. Out of which, CPU is expected to dominate the global market over the forecast period and this is attributed to the widespread use and several benefits offered by these processors. The CPU accelerations in data centers are majorly used in manufacturing, retail, healthcare, and smart cities. In these applications, a large amount of data is generated by the connected systems that requires to be stored, managed, and processed for meaningful insights. Thus, CPUs account for a significant market share in the data center accelerator market.

GPU segment is also expected to witness significant growth in the near future and this is owing to the rise in application of GPU in mobile devices such as tablets and smartphones. Moreover, rise in usage of GPU in financial modeling, medical imaging, AI training and inference, and drug research along with supercomputing is also driving growth of the segment.

Global Data Center Accelerator Market: Key Developments

In June 2020, Intel Corporation launched AI and Analytics Platform with new storage, memory, processor, and FPGA solutions with its 3^rd Gen Intel Xeon Scalable processors. Due to these processor, the deployment of AI inference and training becomes easy on general-purpose CPUs for applications including recommendation engines, image classification, language modeling, and speech recognition.

In October 2020, NVIDIA Corporation launched new vGPU Software that accelerates performance with support for NVIDIA ampere architecture. This software features with a new release supporting the NVIDIA A100 Tensor Core GPU with NVIDIA Virtual Computer Server (vCS) software.

In November 2020, Advanced Micro Device Inc. announced the launch of the new AMD Instinct MI100 accelerator with ROCm 4.0 open ecosystem support and revealed an increasing list of AMD EPYC CPU and AMD Instinct accelerator-based deployment, along with this the company also revealed its collaboration with Microsoft Azure for HPC in the cloud.

In March 2020, XILINX Inc. introduced Alveo U25 SmartNIC for high Performance Adaptable Cloud Networks. Moreover, the company also announced new XtremeScale X2562 OCP 3.0 Form Factor Ethernet Adapter and an OCP Accelerator Module proof of concept.

In June 2020, XILINX Inc. launched two real-time computing video appliances for easy-to-scale, ultra-high-density video transcoding applications.

Global Data Center Accelerator Market: Key Companies Insights

The global data center accelerator market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global data center accelerator market are Qualcomm Technologies Inc., Intel Corporation, Cisco Systems Inc., NVIDIA Corporation, IBM Corporation, Advanced Micro Devices Inc., Dell Technologies Inc., Achronix Semiconductor Corporation, NEC Corporation, and Xilinx Inc.

*Definition:

Data Center Accelerator is the technology that accelerates the processing of data. Its function includes accelerating computing, networking, and storage. This technology can be used to improve the performance of computers, particularly in the fields of artificial intelligence.