In-Depth Research: China's AI Accelerator Server Market Size Expected to Reach $13.4 Billion by 2027
-
Report: China's AI accelerator server market expected to reach $13.4 billion by 2027
The Artificial Intelligence Computing Conference (AICC 2023) was held today in Beijing. IDC and Inspur Information jointly released the 2023-2024 China AI Computing Power Development Assessment Report. The report shows that in the first half of 2023, China's AI server market grew by 54.1% quarter-over-quarter. It is projected that by 2027, China's AI accelerator server market will reach $13.4 billion, with a five-year compound annual growth rate of 21.8%. In the first half of 2023, China's AI server market size reached $3 billion, a year-over-year increase of 55.4%.
In-depth research on the server industry
Servers are primarily used to provide computing or application services to terminals in networks, representing the most critical link in the cloud computing industry chain. In the 5G era, with the continuous growth of new mobile terminal connections, the explosion in data traffic will drive geometric growth in computing and storage demands. Server shipment volumes are expected to see substantial growth, and the server industry's development potential will gradually expand.
The upstream segment of the server industry chain includes raw materials such as CPUs, GPUs, memory, hard drives, RAID controllers, power supplies, and software systems. The midstream consists of the server industry itself, while downstream customers include internet cloud service providers, telecom operators, third-party IDC service providers, government departments, and various types of enterprises.
Currently, China's server market demand can be divided into internet, telecom operators, finance, and government sectors. The internet industry accounts for 43.8%, ranking first. Within the internet sector, server demand mainly comes from major enterprises like the new BAT (Baidu, Alibaba, Tencent), Kuaishou, and others. Telecom operators, finance, and government sectors rank second to fourth, accounting for 10.6%, 9.9%, and 9% respectively.
China's server industry enterprises are roughly divided into three tiers. The first tier consists of leading companies like Inspur and Huawei's H3C, which not only hold relatively high market shares in China but also rank among the top server companies globally. The second tier includes companies with strong domestic sales and large-scale operations, such as Lenovo, Sugon, and Digital China. The third tier comprises listed companies engaged in server manufacturing, including Taisu Technology, Wuzhou Technology, and Tongfang Co., Ltd.
Servers are a type of computer that operates faster, handles higher loads, and is more expensive than ordinary computers. Servers provide computing or application services to other clients (such as PCs, smartphones, ATMs, and even large equipment like train systems) in a network. They feature high-speed CPU processing capabilities, long-term reliable operation, powerful I/O external data throughput, and better scalability. The main functions of servers are data computing and storage, making them fundamental nodes of IDCs (Internet Data Centers).
In terms of composition, servers include processors, hard drives, memory, system buses, etc., similar to general computer architectures. However, due to the need to provide highly reliable services, they have higher requirements in processing power, stability, reliability, security, scalability, and manageability.
From a product perspective, servers can be broadly categorized by application scenarios into storage servers, cloud servers, AI servers, edge servers, among others. In terms of product form, they can be divided into multi-node servers, rack-scale servers, rack-mounted servers, tower servers, and blade servers.
China is one of the world's largest server markets, with its global market share continuously increasing. In 2023, China's server market is projected to reach $27.34 billion (approximately ¥188.837 billion), a year-on-year growth of 9.1%; shipments are expected to hit 4 million units, up 7.1% year-on-year. Domestic manufacturers dominate China's server market, with the top five vendors in 2023 being Inspur, Huawei, H3C, Dell, and Lenovo, with estimated annual sales of $7.707 billion (¥53.063 billion), $3.637 billion (¥25.032 billion), $3.291 billion (¥22.651 billion), $1.494 billion (¥10.288 billion), and $1.451 billion (¥9.986 billion) respectively, accounting for market shares of 28.1%, 13.3%, 12.0%, 5.5%, and 5.3%.
China's server market is primarily driven by x86 servers, with x86 server sales projected to reach $26.02 billion (¥179.038 billion) in 2023, an 8.9% increase, representing 95.17% of the market. Non-x86 server sales are expected to reach $1.32 billion (¥9.084 billion), up 11.9% year-on-year, accounting for 4.83% of the market.
According to the "China's New Infrastructure Development Research Report," globally, data centers are expected to account for the largest share of energy consumption by 2025, reaching as high as 33%. Domestically, the power consumption of data centers has grown at a rate exceeding 12% for eight consecutive years. Whether the data center industry can achieve carbon neutrality is of great significance to China's green economy development. The green development goals of data centers will drive technological innovations in server form and architecture. In the future, with the deepening applications of 5G, autonomous driving, and the metaverse, profound transformations will occur in the server industry.