PUBLISHER: The Business Research Company | PRODUCT CODE: 1852373
 
				PUBLISHER: The Business Research Company | PRODUCT CODE: 1852373
A data center chip is a specialized semiconductor built to power servers and infrastructure in data centers, managing computing, storage, and networking functions. It enables high-performance workloads such as cloud services, artificial intelligence (AI), and enterprise-level applications.
The primary types of data center chips include central processing units (CPUs), graphics processing units (GPUs), application-specific integrated circuits (ASICs), field-programmable gate arrays (FPGAs), and neural processing units (NPUs). A CPU, or central processing unit, serves as the core component of a computer, executing instructions, performing calculations, and controlling overall system operations. These chips are fabricated using different technology nodes, including 25 nanometers (nm) and below, 26-45 nm, 46-65 nm, and above 65 nm, and are deployed in data centers of various sizes such as small, medium, and large. Their applications span data storage, networking, high-performance computing (HPC), AI and machine learning (ML), and cloud computing. End-users include sectors such as information technology, telecommunications, healthcare, banking, financial services and insurance (BFSI), retail and e-commerce, entertainment and media, energy, and others.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The rapid rise in U.S. tariffs and the subsequent trade frictions in spring 2025 are having a major impact on the electrical and electronics sector, with semiconductors, display panels, and rare-earth metals (essential for batteries and motors) subject to steep duties. Consumer electronics brands face profit erosion, as competitive markets limit their ability to pass costs to buyers. Industrial electronics manufacturers, meanwhile, grapple with delayed projects due to shortages of tariff-impacted components like printed circuit boards. Companies are responding by relocating assembly to tariff-exempt countries, increasing inventory buffers, and redesigning products to reduce dependency on restricted materials.
The data center chip market research report is one of a series of new reports from The Business Research Company that provides data center chip market statistics, including data center chip industry global market size, regional shares, competitors with a data center chip market share, detailed data center chip market segments, market trends and opportunities, and any further data you may need to thrive in the data center chip industry. This data center chip market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The data center chip market size has grown rapidly in recent years. It will grow from $17.23 billion in 2024 to $19.67 billion in 2025 at a compound annual growth rate (CAGR) of 14.1%. The growth in the historic period was driven by the increasing adoption of virtualization technologies, the rising demand for energy-efficient processing, the surge in data traffic and storage needs, the expansion of hyperscale data center deployments, and the growing reliance on high-performance computing.
The data center chip market size is expected to see rapid growth in the next few years. It will grow to $32.97 billion in 2029 at a compound annual growth rate (CAGR) of 13.8%. The growth in the forecast period can be attributed to the rising number of hyperscale data centers, the surge in data traffic driven by digital transformation, the growing demand for high-performance computing, the increasing emphasis on energy-efficient processors, and the expanding adoption of virtualization and software-defined networking. Key trends anticipated during this period include advancements in heterogeneous chip architectures, progress in advanced packaging technologies to boost performance, innovations in chiplet-based designs, the integration of AI accelerators into processors, and developments in photonic interconnects to enable faster data transfer.
The increasing adoption of cloud services is expected to drive the growth of the data center chip market in the coming years. Cloud services refer to internet-based computing resources and applications that can be accessed on demand without the need for owning physical infrastructure. This adoption is fueled by scalability, which allows businesses to adjust resources as needed without major hardware investments. Data center chips play a key role in cloud services by delivering high-performance computing and efficient data processing, enabling servers to manage large workloads, store vast amounts of data, and support fast, reliable applications. For example, in June 2024, AAG IT Services, a UK-based non-government organization, reported that in 2023, about 63% of small and medium-sized business workloads and 62% of their data were expected to be hosted in public clouds, compared to 57% and 56% in 2022. This trend illustrates how the growth of cloud adoption is fueling demand for data center chips.
Companies in the data center chip market are focusing on developing advanced infrastructure chips designed to optimize computing performance and support AI-driven workloads. These custom-designed chips are specifically engineered for data center operations, addressing tasks such as high-performance computing, storage, networking, and AI processing, rather than relying on general-purpose processors. For instance, in November 2024, Microsoft Corporation, a US-based technology company, introduced Azure Integrated HSM (hardware security module) and Azure Boost DPU (data processing unit) to strengthen cloud security and accelerate performance in data-intensive workloads. The Azure Integrated HSM ensures encryption keys are secured in dedicated hardware for faster, more secure cryptographic operations, while the Azure Boost DPU offloads networking and storage functions from CPUs, improving efficiency and speed for demanding AI applications.
In June 2025, Qualcomm Inc., a US-based semiconductor and technology company, acquired Alphawave Semi for $2.4 billion. This acquisition is intended to enhance Qualcomm's presence in the data center chip market by combining its custom CPU and NPU capabilities with Alphawave Semi's advanced connectivity technologies. The integration will enable Qualcomm to offer more efficient, high-performance, and comprehensive computing platforms tailored for AI inferencing and the evolving demands of modern data centers. Alphawave Semi is a UK-based semiconductor company specializing in data center chips.
Major players in the data center chip market are Google LLC, Samsung Electronics Co. Ltd., Huawei Technologies Co. Ltd., Intel Corporation, IBM Corporation, Cisco Systems Inc., Oracle Corporation, Qualcomm Technologies Inc., Sk Hynix Inc., Broadcom Inc., Hewlett Packard Enterprise, Fujitsu Limited, NVIDIA Corporation, Advanced Micro Devices Inc., Texas Instruments Incorporated, STMicroelectronics N.V., Marvell Technology Group Ltd., Arm Holdings Plc, Monolithic Power Systems Inc., Ampere Computing LLC
North America was the largest region in the data center chip market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in data center chip report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the data center chip market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The data center chip market consists of revenues earned by entities by providing services such as cloud infrastructure optimization service, virtualization support service, thermal management service, edge data processing, and security and encryption processing service. The market value includes the value of related goods sold by the service provider or included within the service offering. The data center chip market consists of sales of switching and routing chips, load balancer chips, hardware security modules (HSMs), and latency optimization chips. Values in this market are 'factory gate' values; that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Data Center Chip Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on data center chip market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for data center chip ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The data center chip market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.
 
                 
                 
                