As you are probably already aware the AI server market is on the brink of significant expansion, with projections indicating a market value of $187 billion by 2024. This surge is largely driven by the increasing demand for advanced AI servers from major cloud service providers (CSPs) and brand clients. The production capabilities of key players like TSMC, SK hynix, Samsung, and Micron have also improved, easing previous shortages and reducing lead times for NVIDIA’s flagship H100 solution.
2024 AI Server Market
- AI server market value projected to reach $187 billion in 2024.
- AI server shipments expected to grow by 41.5% YoY in 2024.
- Lead time for NVIDIA’s H100 solution reduced to less than 16 weeks.
- AI servers to account for 65% of the total server market value in 2024.
- North American and Chinese CSPs expanding proprietary ASIC AI solutions.
- NVIDIA holds nearly 90% market share for GPU-equipped AI servers.
- Next-generation AI chips like NVIDIA’s Blackwell set to drive future demand.
Market Dynamics and Growth Projections
The AI server market is experiencing unprecedented growth, with shipments expected to increase by nearly 20% quarter-over-quarter in the second quarter of 2024. This growth is primarily fueled by major CSPs focusing their budgets on AI server procurement, which has overshadowed the growth of general servers. The annual growth rate for general server shipments is a modest 1.9%, compared to the robust 41.5% growth rate for AI servers.
Market Value and Share
In terms of market value, AI servers are significantly outpacing general servers. The market value of AI servers is projected to exceed $187 billion in 2024, representing a 69% growth rate and accounting for 65% of the total server market value. This shift underscores the increasing importance of AI technology in the server market.
Regional and Technological Contributions
North American CSPs such as AWS and Meta are continuously expanding their proprietary ASICs, while Chinese companies like Alibaba, Baidu, and Huawei are actively developing their own ASIC AI solutions. This trend is expected to increase the share of ASIC servers in the total AI server market to 26% in 2024, with mainstream GPU-equipped AI servers accounting for about 71%.
Key Players and Market Share
NVIDIA remains the dominant player in the AI server market, holding nearly 90% market share for GPU-equipped AI servers. AMD, on the other hand, has a market share of approximately 8%. When considering all AI chips used in AI servers (GPU, ASIC, FPGA), NVIDIA’s market share stands at around 64% for the current year.
Future Trends and Technological Advancements
The demand for advanced AI servers is expected to remain strong through 2025, particularly with the introduction of NVIDIA’s next-generation Blackwell platform. This new platform, which includes the GB200 and B100/B200 chips, is set to replace the current Hopper platform as the market mainstream. The Blackwell chips will drive demand for CoWoS (Chip-on-Wafer-on-Substrate) and HBM (High Bandwidth Memory).
For instance, NVIDIA’s B100 chip will be double the size of the H100, consuming more CoWoS. The production capacity of TSMC’s CoWoS is estimated to reach 550-600K units by the end of 2025, with a growth rate approaching 80%. Mainstream H100 chips in 2024 will be equipped with 80 GB HBM3, while future chips like NVIDIA’s Blackwell Ultra or AMD’s MI350 are expected to feature up to 288 GB of HBM3e, tripling the unit usage.
Conclusion
The AI server market is set for explosive growth, driven by high demand from major CSPs and advancements in AI chip technology. With a projected market value of $187 billion in 2024, AI servers are poised to dominate the server market, accounting for 65% of its total value. Key players like NVIDIA and AMD are at the forefront of this technological revolution, with next-generation chips and increased production capacities paving the way for future advancements.
For those interested in the broader implications of AI technology, other areas worth exploring include the impact of AI on data centers, the role of AI in edge computing, and the future of AI-driven cybersecurity solutions. These topics offer a deeper understanding of how AI is transforming various sectors and driving innovation across the board. For more details jump over to the Trend Force website.
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