"The server and storage system component market is poised for an 11 percent growth for full-year 2023, primarily propelled by accelerators. 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," stated Baron Fung, Senior Research Director at Dell’Oro Group. "Looking ahead to 2024, we anticipate strong double-digit growth in accelerator revenue. Moreover, 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. Alongside the unit growth of these component categories, we expect pricing to improve in tandem with higher demand and the transition to the next-generation server platforms," explained Fung.
Additional highlights from the 3Q 2023 Data Center IT Semiconductors and Components Quarterly Report:
• NVIDIA led in server and storage system component revenues in 3Q 2023, 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 towards accelerated computing.
• 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 a 70 percent 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 the hyperscale cloud service providers.
