AI Hardware Demand Drives 44% Surge in Data Center Semiconductors and Components in Q2 2025, Says Dell’Oro Group

Key Takeaways

AI expansion drove a 44% growth in the server and storage component market in 2Q 2025.
NVIDIA led the market in revenue, primarily due to its Blackwell Ultra GPUs, with significant contributions from SK Hynix and Samsung.
ARM CPUs captured 25% of the server market, driven by custom deployments from major hyperscalers.

AI Expansion Fuels Market Growth

The Dell’Oro Group recently reported on the acceleration of the server and storage component market, buoyed by the growing demand for artificial intelligence (AI) capabilities. This sector experienced a remarkable 44% rise in year-over-year growth during the second quarter of 2025. The increasing need for accelerators, High Bandwidth Memory (HBM), and Network Interface Cards (NICs) is supporting this unprecedented growth across the AI infrastructure landscape.

Baron Fung, Senior Research Director at Dell’Oro Group, noted that key players like NVIDIA’s Blackwell Ultra GPUs and tailored accelerators from Google and Amazon are pivotal in propelling the data center IT component market. These custom accelerators are now being shipped in volumes akin to commercial GPUs, catering to AI and cloud workloads. Despite the robust demand for general-purpose server components—including CPUs, NICs, memory, and storage—current market dynamics such as inventory adjustments and tariff-driven pull-ins are influencing revenue trends.

The report highlights significant market forecasts for 2025, predicting a growth rate of 46% for the server and storage systems component market. NVIDIA stands out as the leading vendor in data center IT component revenues, closely followed by SK Hynix and Samsung. Growth for SK Hynix and Samsung stems from heightened demand for HBM and trends within the general-purpose server market.

Moreover, ARM CPUs have made substantial inroads, now constituting 25% of the server market, primarily fueled by NVIDIA’s GB200 and GB300 processors alongside hyperscaler custom deployments. Additionally, revenues for Smart NICs and Data Processing Units (DPUs) have doubled year-over-year, driven by robust adoption of Ethernet adapters in AI clusters.

The Dell’Oro Group report provides comprehensive tracking of market revenues, shipments, and capacity related to major semiconductor and component manufacturers supplying the data center server and storage market since 2018. It focuses on critical components such as CPUs, GPUs, FPGAs, custom AI ASICs, Ethernet adapters, Smart NICs, HBM, DRAM, HDDs, and SSDs, along with forecasts based on server and storage system shipments to hyperscale cloud providers.

The Dell’Oro Group specializes in market research and analysis across telecommunications, security, enterprise networks infrastructure, and data center markets, aiding businesses in making informed decisions.

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