AI buildouts will drive GPU and other accelerator revenues

“We recently raised our revenue forecast on accelerators because AI-related data center capex for hyperscale Cloud SP and Enterprise markets has surged since last year, and is expected to remain elevated during our forecast horizon,” said Baron Fung, Senior Research Director at Dell’Oro Group. “In addition to AI, workloads such as video transcoding, HPC, and inline storage compression and decompression will also benefit from domain-specific accelerators. While NVIDIA currently has a dominant share in the GPU accelerator market, we anticipate that other vendors such as AMD and Intel, and the hyperscalers’ deployment of custom accelerators will gain some share over time as customers seek greater vendor diversity,” said Fung.

Additional highlights from the Data Center IT Semiconductors and Components 5-Year July 2024 Forecast Report:

We project the CPU market will lag that of other component categories in terms of growth, given the focus on optimizing the footprint of general-purpose servers.

The memory market will benefit from increasing AI infrastructure adoption, especially for high-bandwidth memory (HBM).

While the impact of AI is not immediately apparent, it is expected to inject long-term growth in the storage drive market given the vast amount of data that needs to be harvested and retained to train data models.

We significantly raised our revenue projections for NICs with the inclusion of the back-end market for connectivity to accelerated computing clusters.