Advancement in Chip Technology Fillips the Data Center Chip Industry

By Swamini Kulkarni
5 Min Read
Data Center Chip
Data Center Chip

Data centers form an integral part of any business as it holds all the important information of an organization. It’s hard to imagine a company, whether large or small, running at full load without a data center. As data centers hold such a crucial place in an enterprise, they cannot afford to be out of the loop. It is imperative that it be always available to ensure the continuity of business.


A prime component found within a data center which plays a crucial role in the working the infrastructure of networked computers is the data center chip. Coming in several varieties such as GPU, ASIC, FPGA, CPU, and more, it finds application in various industries such as banking, manufacturing, IT & telecom, transportation, energy and utilities, and others.

Factors such as advancement in cloud computing and chip technology and growing government regulations regarding localizations of data centers are acting as drivers for the growth of the market. Moreover, an increase in smart computing devices offers lucrative growth opportunities for the market.

As per Allied Market Research’s report on data center chip market, the market is anticipated to accrue a sum of $15,641.1 million by 2025, thereby growing at a CAGR of 9.4% during the forecast period, 2018 – 2025.

The growing demand for data center chips is pushing manufacturers to introduce new and innovative products in the market. Companies in the space are also focusing on strategies such as acquisitions and others to increase their market share and expand their market reach.

For instance, in January ‘19, Huawei Technologies, a telecommunication equipment company, launched a new data center chipset aimed at enhancing performance and reducing power consumption. In February ’19, Arm Ltd. introduced two seven-nanometer Neoverse chips designed for data centers and 5G networks. Nvidia recently announced its plans to acquire Mellanox Technologies for data center chips for a sum of $6.8 billion.

Huawei Enhances its Chip-making Capabilities

The launch of the new data center chipset by the leading telecom equipment maker Huawei Technologies boosts its reputation as a semiconductor designer. Called the Kunpeng 920, the core processor chip is developed with the aim of offering the market a new alternative to Intel’s products. Providing a better computing performance than its peers, the chipset also slashes power consumption by 30% and enhances performance.

With the launch of the product, William Xu, the Chief Marketing Officer said that the company intends to drive the development of the ARM ecosystem to cater to the expansion of cloud services and big data.

Arm’s New Neoverse Chips Unveiled

The new Neoverse chip designs introduced by Arm are based on a new microarchitecture, ‘N1’ and ‘E1.’ The design of the Neoverse N1 chip offers 2.5 times more processing power for certain server workloads than the previous Cortex-A72 architecture. It is also faster in processing integers and can service the wider range of data center workloads.

The other new product called the Neoverse E1 is made to power systems such as cellular base stations that are specifically built to process network traffic. Brian Jeff, Arm’s senior director of product marketing, said, “Neoverse E1 and Neoverse N1 processors can be combined in a heterogeneous design for high-performance systems. Some of the example devices utilizing this kind of system are firewall appliances with deep packet inspection and intrusion detection capabilities.”

Nvidia Buys Mellanox Technologies

Nvidia Corporation, an American technology company, plans to acquire Mellanox Technologies, an Israel-based supplier of computer networking products with an aim to boost the former’s data center business. The deal would help integrate two of the leading enterprises in high-performance computing (HPC). Mellanox helps NVIDIA to manage the workloads in datacenter across the entire computing, networking, and storage stack with the aim of obtaining greater performance, maximum utilization, and lower operating cost for customers.

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