In the wave of global digital transformation, the cloud service market is becoming an important engine to promote technological progress and economic growth. In the first quarter of 2024, the server and storage component market set a new record with an astonishing growth rate of 152%. How was this leap achieved? This article will deeply analyze the reasons behind this phenomenon and explore its far-reaching impact on the industry.
The driving force of the hyperscale cloud market
The rapid expansion of the cloud service market, especially the surge in demand for high-performance computing components from hyperscale cloud service providers, is the main driving force for the growth of the server component market. "According to Dell'Oro Group data, in the first quarter of 2024, the global server and storage component market grew by 152%, setting a new record." Behind this growth rate is the large-scale investment of cloud service providers in artificial intelligence, machine learning, data analysis and other fields.
Figure: Cloud service market drives server and storage component growth by 152%
Market recovery after inventory adjustment
After the inventory adjustment cycle in 2023, the general server and storage component market achieved double-digit revenue growth. "General server and storage component revenue also achieved double-digit growth following an inventory correction cycle in 2023." This recovery shows that the market has recovered from inventory backlogs and is ready for a new round of demand growth.
The dual drive of price increases and increased demand
The significant increase in the average selling price (ASP) of components is another key factor driving revenue growth. "Compared with a year ago, the average selling price of components increased significantly, adding to revenue growth." This price increase reflects the market demand for higher-performance components and the ability of suppliers to control supply to meet this demand.
NVIDIA's market leadership
In this market feast, NVIDIA's improved supply of its H100 GPU in the cloud and enterprise markets accounted for nearly half of the component revenue, highlighting its market leadership. "In the first quarter, NVIDIA led all suppliers in component revenue, followed by Samsung and Intel." NVIDIA's success is not only reflected in its technological leadership, but also due to its accurate grasp of market demand.
Continued growth in the accelerator market
The strong growth of the accelerator market is expected to continue until 2024. "The strong growth of accelerators is expected to continue through 2024." GPUs, as the primary choice for training and inference, will continue to drive the market. At the same time, Nvidia's upcoming Blackwell platform and competing products from other suppliers will also bring more choices to the market.
The rise of smart NICs and DPUs
The sharp growth in smart network card (NIC) and data processing unit (DPU) revenue is a direct reflection of the market's hyperscale adoption of AI and non-AI use cases. "Smart NIC and DPU revenue grew by more than 50% in the first quarter of 2024." This growth shows that as AI technology continues to advance, the demand for basic hardware that can support these technologies is also growing.
Conclusion
The amazing growth in the server and storage component market is the result of the rapid development of the cloud service market, technological advances, and increased market demand. With the increasing demand for high-performance computing components from hyperscale cloud service providers and the continuous advancement of AI technology, we can foresee that this market will continue to maintain good growth momentum. At the same time, suppliers need to continue to innovate to meet the market's demand for higher performance and more efficient components.
