TrendForce: ARM-based Server Penetration Rate to Reach 22% by 2025

According to TrendForce research, in recent years, corporate demand for digital transformation, including artificial intelligence and high-performance computing (HPC), has risen, resulting in increased cloud computing use. The world’s main cloud service providers have gradually integrated ARM-based servers to boost service flexibility. By 2025, ARM architecture is predicted to have a 22 percent adoption rate in data center servers.

ARM architecture processors have grown in the sectors of mobile terminals and the Internet of Things (IoT) in recent years, while advancement in the server industry has been gradual, stated TrendForce. However, in recent years, businesses have broadened their cloud workloads, and the industry has begun to recognize the advantages that ARM architecture processing can give to data centers.

ARM-based CPUs, according to TrendForce, have three significant benefits. For starters, they can handle a wide range of workloads and are more scalable and cost-effective. Second, with a more flexible environment, ARM-based CPUs allow for greater customization for various niche industries. Third, the physical footprint is tiny, which is ideal for today’s compact data centers.

Micro Data Centers

Major cloud service providers (CSPs) and telecom carriers are aggressively creating micro data centers, which would further accelerate the spread of ARM-based processors, influenced by geopolitics and the strengthening of data sovereignty in many nations. At the same time, Graviton, led by AWS, has one of the highest market sizes among cloud service providers now embracing ARM-based processors, and began steadily intruding into the market in 2021.

AWS’s deployment of ARM-based CPUs hit 15 percent of overall server deployment in 2021, according to TrendForce, and will top 20 percent in 2022. Other large cloud service companies are being forced to keep up by launching their own initiatives at other foundries. These ideas are projected to go into mass production in 2025 if testing goes well.

Furthermore, according to ARM’s prior Neoverse Platform strategy, the Platform Roadmap would be one of the major drivers of penetration. The ultra-large-scale data centers and edge computing infrastructure are the focus of this product line. However, because x86 is still the market leader, and ARM-based server CPU providers only maintain small-batch production orders at this time, focusing largely on ultra-large-scale data centers, the adoption of ARM-based servers in enterprise data centers will be sluggish, stated TrendForce. As a result, TrendForce expects that ARM-based servers will continue to struggle to compete with x86-based servers before 2025.