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Worldwide x86 and ARM server-class microprocessor revenue will increase 1,3% to $13,9-billion while server microprocessor market unit shipments will increase 3,5% to 22,9-million units in 2016, according to a new forecast from the International Data Corporation (IDC).
The report, Worldwide x86 and ARM Server-class Microproessor 2016-2020 Forecast, also predicts that combined x86 and ARM server-class microprocessor revenues will log a compound annual growth rate (CAGR) of 2,2% from 2015-2020, reaching $15,3-billion in 2020.
Among the report’s cited growth drivers for server-class microprocessors in 2016 are substantial direct purchases by major cloud service providers, such as Google and Amazon, and the use of server microprocessors in system categories outside of servers, such as storage systems and networking systems.
In the first quarter of 2016 (1Q16), IDC estimated that 17,3% of x86 and ARM server-class processors–primarily Intel Xeon–were shipped for storage, networking, and embedded systems, compared to 8,8% in 1Q13.
The report also cites a competitive shift coming. After many years of ecosystem development and processor designs that failed to gain traction in the data center, ARM processor vendors, such as Applied Micro and Cavium, have garnered notable design wins and partnerships from communications service providers (CSPs) and systems vendors representing a wide spectrum of end customers and workloads.
IDC expects that in 2017, ARM vendors will begin to gain market traction with their newest generation of designs.
“With an expanding system total available market (TAM), expanding workload base, and emerging competition, the next five years of the server-class microprocessor market will see more system- and workload-specific designs, moderation in pricing, and some modest change in market share,” says Shane Rau, research vice president, Computing Semiconductors at IDC.
Other key findings from IDC’s forecast include:
• IDC estimates that the average worldwide contract price paid by a server-class microprocessor customer rose 25% from 2010 to 2015. Intel held 93% unit share in 2010 and 99,2% unit share in 2015.
• The high market average selling price (ASP) is attracting new microprocessor vendors to the server-class microprocessor market. These vendors are being encouraged by significant sources of demand, such as major cloud service providers and systems makers in China seeking an alternative to Intel.
• In late 2016 and through 2017, several processor vendors will issue new products with the potential to compete with Intel’s mainstream product line, the Xeon E5-26xx series. These products include AMD’s x86-based Zen, Qualcomm’s ARM-based Hydra, Applied Micro’s ARM-based X-Gene 3, Cavium’s ARM-based ThunderX 2, and possibly Broadcom’s ARM-based Vulcan.