Server and storage component revenues grew to a record USD244 billion in 2024, fuelled by strong AI demand, according to a recently published report by Dell’Oro Group.
The growth was primarily driven by GPUs, custom accelerators, HBM, and storage solutions tailored for AI workloads. Additionally, memory and storage demand for the general-purpose server market saw a strong rebound, accompanied by improved pricing throughout the year.
“While NVIDIA GPU systems, primarily featuring the Hopper platform, and Blackwell in late 2024 were the primary drivers of growth, a broader range of accelerated systems has also emerged,” said Dell’Oro Group Senior Research Director Baron Fung. “AMD has steadily gained traction with major cloud service providers, particularly with its Instinct platform.”
“Additionally, the top 4 US cloud service providers, Google, Amazon, and Microsoft, dramatically increased their adoption of accelerated servers equipped with custom accelerators optimised for AI training and inference in 2024,” he added. “Looking ahead to 2025, continued investments in AI infrastructure are expected to fuel sustained demand for critical components, with GPUs, custom accelerators, HBM, high-capacity SSDs, and NICs for back-end networks all projected to experience strong double-digit revenue growth.”
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 centre server and storage system markets starting from 2018.
Technologies of focus are major server and storage semiconductors and components such as CPUs, accelerators such as GPUs, FPGAs, and custom AI ASICs, wthernet and InfiniBand NICs and smart NICs, HDDs, NAND/SSDs.
In addition, the report provides 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.
Additional highlights from the 4Q 2024 Data Center IT Semiconductors and Components Quarterly Report include:
- The server and storage systems component market is forecast to moderate to still a healthy growth of over 40% in 2025;
- NVIDIA dominated data centre component market revenues, leading all vendors, with Samsung and SK Hynix trailing behind in 2024. NVIDIA captured nearly half of the total reported revenues, while hyperscalers deploying custom solutions are rapidly gaining ground;
- Smart NIC and DPU revenues increased by 77%, driven by the strong deployment of ethernet adapters in AI clusters; and
- The recovery in the CPU market is overdue, with revenues projected to increase by 45% in 2025.
