AI Demand Fuels Server and Storage Component Revenues to Record $244 Billion in 2024, According to Dell'Oro Group

A recent report from Dell'Oro Group indicates that Server and Storage Component revenues hit a record $244 billion in 2024, influenced by strong demand for components supporting Artificial Intelligence (AI) workloads. The growth was primarily attributed to GPUs, custom accelerators, High Bandwidth Memory (HBM), and storage solutions specifically designed for AI applications. Additionally, there was a notable recovery in the general-purpose server market, with improved pricing trends observed throughout the year. “While NVIDIA GPU systems, primarily featuring the Hopper platform, and Blackwell in late 2024 were the primary drivers of growth, a broader range of accelerated systems has also emerged,” stated Baron Fung, Senior Research Director at Dell'Oro Group. “AMD has steadily gained traction with major cloud service providers, particularly with its Instinct platform. Additionally, the Top 4 US cloud service providers—Google, Amazon, and Microsoft—dramatically increased their adoption of accelerated servers equipped with custom accelerators optimized for AI training and inference in 2024. Looking ahead to 2025, continued investments in AI infrastructure are expected to fuel sustained demand for critical components, with GPUs, custom accelerators, HBM, high-capacity SSDs, and NICs for back-end networks all projected to experience strong double-digit revenue growth,” Fung added. Among the notable highlights from the 4Q 2024 Data Center IT Semiconductors and Components Quarterly Report:

• The Server and Storage Systems Component market is projected to maintain a robust growth rate exceeding 40 percent in 2025.
• NVIDIA led the Data Center Component market revenues in 2024, capturing almost half of total reported revenues, with Samsung and SK Hynix following behind.
• Smart Network Interface Controller (NIC) and Data Processing Unit (DPU) revenues surged by 77 percent, driven by robust deployment of Ethernet adapters in AI clusters.
• The Central Processing Unit (CPU) market is expected to see a revenue increase of 45 percent in 2025 as recovery trends continue.

The report from Dell'Oro Group tracks various metrics including revenue, unit shipments, and market share of major semiconductor and component manufacturers involved in data center server and storage system markets. It provides forecasts of component demand based on server and storage system shipments to hyperscale cloud service providers and the broader market.