News Overview
- IDC’s latest analysis reveals a 91% year-over-year increase in global server revenue for Q4 2024, totaling $77.3 billion.
- Non-x86 servers experienced a remarkable 262.1% revenue growth, reaching $22.5 billion, while x86 server revenue grew by 59.9% to $54.8 billion.
- Original Design Manufacturers (ODMs) like Foxconn, Quanta, and Inspur led the market with a 155% increase, achieving $36.6 billion in quarterly revenue.
Original article link: Non-x86 servers boom even faster than the rest of the AI-infused and GPU-hungry market
In-Depth Analysis
Market Growth and Segmentation
- Overall Revenue: The server market’s revenue surged to $77.3 billion in Q4 2024, a substantial increase from $40.5 billion in the same quarter of the previous year.
- x86 vs. Non-x86 Servers:
- x86 Servers: Generated $54.8 billion, marking a 59.9% year-over-year growth.
- Non-x86 Servers: Achieved $22.5 billion in revenue, with a notable 262.1% increase, possibly driven by ARM-based processors developed by major cloud providers.
Vendor Performance
- Original Design Manufacturers (ODMs): Companies such as Foxconn, Quanta, and Inspur reported a 155% revenue growth, totaling $36.6 billion, surpassing traditional vendors.
- Traditional Vendors:
- Dell: Led with $5.5 billion in quarterly server sales.
- Super Micro: Reported $5 billion in sales.
- HPE: Achieved $4.2 billion.
- Lenovo: Recorded $3.8 billion.
- IEIT Systems: A Chinese vendor, reported $3.9 billion in server revenue.
Technological Trends
- GPU Integration: Revenue for servers equipped with embedded GPUs grew by 192.6% year-over-year, with over half of the server market revenue in 2024 attributed to these GPU-embedded servers, largely due to AI workload demands.
Regional Insights
- United States: Accounted for 56% of the market, with a 118% revenue growth.
- China: Experienced a 93.3% increase in server revenue.
- Other Regions: Japan, Asia-Pacific (APAC), and Europe, Middle East, and Africa (EMEA) reported growth rates of 66.9%, 43.8%, and 28.2%, respectively.
Commentary
The significant growth in non-x86 server revenue underscores a shift in the industry towards diversified architectures, particularly ARM-based systems, to meet the escalating demands of AI and machine learning workloads. ODMs’ dominance suggests a trend where large-scale data centers and cloud providers opt for customized, cost-effective hardware solutions over traditional OEM offerings.
The substantial increase in GPU-embedded servers highlights the critical role of GPUs in accelerating AI computations, reflecting the industry’s prioritization of high-performance, scalable infrastructure. Regionally, the U.S. and China continue to lead in server investments, indicating robust data center expansions and technological advancements in these markets.
As energy consumption becomes a growing concern, the adoption of efficient architectures will be pivotal in shaping future data center strategies.