AI Hardware Demand Boosts Data Center Semiconductor Market by 44%

September 12, 2025
The data center semiconductor and components market saw a 44% year-over-year growth in Q2 2025, driven by AI hardware demand, according to Dell'Oro Group.

The data center semiconductor and components market experienced a significant 44% year-over-year growth in the second quarter of 2025, driven by the increasing demand for AI hardware, announced in a press release by Dell'Oro Group. This surge is attributed to the rising need for accelerators, high-bandwidth memory (HBM), and network interface cards (NICs) across AI infrastructure.

Dell'Oro Group highlighted that NVIDIA's Blackwell Ultra GPUs, along with custom accelerators from Google and Amazon, were key drivers of this growth. These components have significantly boosted revenues for HBM memory, back-end NICs, and Grace ARM CPUs tailored for AI workloads.

The report also noted that ARM CPUs now account for 25% of the server market, propelled by NVIDIA's GB200 and GB300 models and custom deployments by hyperscalers. Additionally, smart NIC and DPU revenues have doubled year-over-year, reflecting strong deployment of Ethernet adapters in AI clusters. NVIDIA led the vendors in data center IT component revenues, followed by SK Hynix and Samsung, due to the demand for HBM and general-purpose server components.

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