TrendForce's latest research reveals that the AI server market is projected to reach a value of USD 298 billion by 2025, driven by sustained high demand and an increase in the average selling price (ASP) of these products. AI servers are also expected to account for over 70% of the total server industry value in the same year.
Taiwan-based Foxconn, the world's largest electronics manufacturer, has reported that increased demand for AI servers significantly boosted its fourth-quarter sales. The company recently announced plans to establish the world’s largest server manufacturing site in Mexico, dedicated to producing NVIDIA's GB200 Superchips.
Moreover, shares of chipmakers surged on the first Monday of the year following Microsoft’s announcement of plans to invest USD 80 billion in AI-enabled data centers in 2025. This spurred bets that semiconductor demand would remain strong.
Also Read: Chips 2.0: Meeting Escalating Demands Amid Global Turbulence
How AI Chips Are Transforming the Tech Landscape
The success of AI technology is anchored on the immense computing power required to drive it, a demand being fulfilled by key players like NVIDIA, Arm, and TSMC. NVIDIA’s cutting-edge chips, known as "AI factories," are produced by TSMC based on Arm's designs. Together, these companies form a powerful trio propelling the AI revolution.
Their dominance has not only captivated end-users but also attracted significant investment, with tech giants such as Google, Amazon, Apple, Meta, and Microsoft collectively increasing their market capitalization by a remarkable USD 8 trillion since the launch of ChatGPT in 2022.
In addition to NVIDIA, major cloud service providers (CSPs) are ramping up investments in their own custom-designed application-specific integrated circuits (ASICs). In fact, Google led in shipment volumes of in-house AI chips among CSPs in 2024. However, AWS is expected to see an even higher year-on-year growth rate, surpassing 200%.
By 2025, AWS is forecasted to achieve a year-on-year growth rate of over 70% in shipments of its proprietary AI chips. Furthermore, AWS plans to intensify its focus on developing Trainium chips for AI applications tied to its public cloud infrastructure and e-commerce platforms.
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