AI Server Industry Forecast: Shipments Expected to Reach 150,000 Units in 2023
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An AI server is a data server capable of providing artificial intelligence (AI) services. It can support local applications and web services, as well as deliver complex AI models and services for cloud and on-premise servers. AI servers facilitate real-time computational services for various AI applications. There are two primary architectures for AI servers: a hybrid architecture that stores data locally and a cloud-based architecture that utilizes remote storage technologies and hybrid cloud storage (a combination of local and cloud storage) for data retention.
Servers are a type of computer that operates faster, handles higher loads, and is more expensive than standard computers. They provide computational or application services to other clients (such as PCs, smartphones, ATMs, and even large-scale systems like train networks) within a network. Servers feature high-speed CPU processing, long-term reliable operation, robust I/O data throughput, and superior scalability. Typically, servers are designed to respond to service requests, deliver services, and ensure service reliability. As electronic devices, servers have complex internal structures, though they are similar to standard computers, including components like CPUs, hard drives, memory, systems, and system buses.
AI Server Industry Development Status and Competitive Landscape Analysis
The upstream segment of the AI server industry chain primarily includes chips, PCBs, connectors, cables, power supplies, and various interfaces. The midstream segment consists of server brands and OEM/ODM manufacturers, with a potential shift toward JDM models in the future. The downstream segment comprises various client groups purchasing servers, mainly B2B and B2G clients such as internet companies, cloud service providers, telecom operators, government agencies, and financial institutions. Globally, the AI server market was valued at $21.1 billion in 2023 and is projected to reach $31.79 billion by 2025, with a CAGR of 22.7% from 2023 to 2025.
The rapid advancement of AI represents a significant strategic opportunity to transform human life. China is leveraging AI to build developmental advantages and accelerate innovation. AI is increasingly integrated into daily life in China, which ranks second globally in this field, trailing only the U.S. In 2022, China's core AI industry scale reached ¥510 billion. The internet sector is one of the largest application scenarios for AI servers. In recent years, China's internet industry revenue has generally risen, reaching ¥1.46 trillion in 2022, though slightly lower than the ¥1.55 trillion recorded in 2021.
Integrated circuits are also a core hardware component of AI servers. China's IC production has shown an upward trend, increasing from 156.49 billion units in 2017 to 359.43 billion units in 2021, with a slight dip to 324.19 billion units in 2022. With expanding chip manufacturing capacity, China's silicon wafer industry has experienced rapid growth. From 2019 to 2021, the semiconductor silicon wafer market exceeded $1 billion annually, reaching $1.656 billion in 2021, a 24.04% year-on-year increase.
In terms of AI server workloads in China, inference tasks accounted for approximately 55.5% in 2021. AI servers adopt heterogeneous architectures, categorized by chip types such as CPU+GPU, CPU+FPGA, and CPU+ASIC combinations. GPUs remain the preferred choice for data center acceleration, though non-GPU chip applications are gradually increasing.
The explosive growth of global data has driven continuous demand for data storage. Solid-state drives (SSDs), being more efficient than traditional HDDs, are the mainstream storage devices for AI servers. Global SSD shipments have risen in recent years, reaching 420 million units in 2022. Influenced by economic globalization and national industrial policies, China's high-tech manufacturing sectors, such as power electronics, have developed rapidly, with the power supply industry showing strong growth. In 2021, China's power supply market was valued at ¥341.6 billion. In 2022, North America's four major cloud providers—Microsoft, Google, Meta, and AWS—accounted for about 66% of AI server procurement. Meanwhile, China's AI development surge has intensified, with ByteDance accounting for 6.2% of annual procurement, followed by Tencent, Alibaba, and Baidu at approximately 2.3%, 1.5%, and 1.5%, respectively.
In terms of downstream applications in China's AI server market, internet companies accounted for 47.5% of sales in 2022, followed by telecom operators (19.6%), communications (8.6%), government (6.3%), manufacturing (5.1%), education (5%), and finance (3.8%). In 2022, China's AI server shipments reached 284,000 units, with projections of 650,000 units by 2027, reflecting a CAGR of 17.9% from 2022 to 2027.
Future Market Size and Trends in the AI Server Industry
With the accelerated industrial application of AI, global AI infrastructure spending continues to grow rapidly. The AI server market expanded to $18.3 billion in 2022, with global shipments accounting for nearly 1% of total server shipments, approximately 145,000 units.
Shipments are projected to reach 150,000 units in 2023 and grow to 225,000 units by 2026. According to Gartner analysis, the global server market size is expected to reach $155.67 billion by 2026, with a compound annual growth rate (CAGR) of 8.3%. Meanwhile, with the development of hyperscale data centers and the transformation of traditional enterprises, innovative technologies and energy-saving solutions are expected to experience faster growth.