AI Server Explosion Drove Accelerator Revenues by 224 Percent in 2023, According to Dell'Oro Group

NVIDIA Led Server and Storage Component Revenues in 2023

REDWOOD CITY, Calif., March 22, 2024 /PRNewswire/ -- According to a recently published report by Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, strong demand for AI servers drove the revenues for GPU and custom accelerators by 224 percent in 2023. In 2024, in addition to continued growth momentum for AI infrastructure, we expect a broad recovery for the server and storage system component market as some of the hyperscale cloud service providers enter an expansion cycle, and enterprise IT spending gradually unfreezes.

"The accelerator market is set to maintain strong growth momentum as the hyperscale cloud service providers deploy next-generation AI infrastructure for larger training models and increasing inferencing demands," stated Baron Fung, Senior Research Director at Dell'Oro Group. "Enterprise adoption of AI applications is rising, driving the need for infrastructure in both public cloud and private data centers. With major product updates every two years, this market demands frequent infrastructure replacements, leading to higher capital investments. Furthermore, the recovery in the general-purpose computing and storage component market is underway after an extended correction. Fourth-generation CPUs from Intel and AMD, expected to ship in high volumes this year, will enable end-users to realize benefits in server efficiency and footprint optimizations. Pricing for commodities such as memory and storage drives will also rise this year, as supplies normalize, and from the deployment of new server architectures," explained Fung.

Additional highlights from the 4Q 2023 Data Center IT Semiconductors and Components Quarterly Report:

• NVIDIA led in server and storage system component revenues in 2023, driven by GPU accelerators, followed by Intel and Samsung. Accelerator revenues surpassed CPU revenues for the first time in 2023, reflecting a shift towards accelerated computing.
• GPU revenue is forecasted to achieve strong double-digit growth in 2024. Although NVIDIA currently dominates this market, potential challenges arise from new competitive offerings by AMD and Intel, coupled with the emergence of custom accelerators by major cloud service providers.
• Smart NIC revenues grew more than 50 percent in 2023, driven by strong hyperscale adoption for both AI and non-AI use cases.

About the Report
Dell'Oro Group's Data Center IT Semiconductors and Components Quarterly Report tracks revenue, unit and capacity shipments and unit and capacity pricing, along with market share of major semiconductor and component manufacturers that supplies into the data center server and storage system markets starting from 2018. Technology of focus will be major server and storage semiconductors and components such as CPUs, accelerators such as GPUs, FPGAs, and custom AI ASICs, Ethernet and InfiniBand NICs and Smart NICs, HDDs, NAND/SSDs. In addition, we will provide a forecast of the demand for these components based on shipments of servers and storage system to the hyperscale cloud service providers and to the rest-of-the-market. To purchase this report, please contact us at [email protected].

About Dell'Oro Group
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks infrastructure, and data center markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell'Oro Group at +1.650.622.9400 or visit www.delloro.com.

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SOURCE Dell'Oro Group