Surging Demand for Accelerators, HBM, and NICs Underpins Record Expansion Across the AI Infrastructure Stack
REDWOOD CITY, Calif. – June 10, 2025 – According to a recently published report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the on-going AI expansion cycle drove the server and storage component market to 62 percent year-over-year growth in 1Q 2025. The surging demand for accelerators, HBM, and NICs underpins record expansion across the AI infrastructure stack.
“The AI accelerator market was led by robust uptake of NVIDIA’s Blackwell GPU platform as well as the continued rollout of custom accelerators by major cloud service providers,” said Baron Fung, Senior Research Director at Dell’Oro Group. “We estimate Blackwell has already surpassed an estimated 50 percent of the company’s high-end GPU shipments during the quarter, which in turn is prompting upgrades in networking, storage, and infrastructure across the data center.
“Meanwhile, custom silicon continues to gain traction with hyperscalers expanding their deployment of custom accelerators for both training and inference of large foundational models. Beyond AI-specific hardware, general-purpose components such as CPUs, memory, storage drives, and NICs also saw meaningful growth in early 2025. This was partly driven by a recovery in mainstream enterprise server demand, as well as inventory builds and component price hikes ahead of the anticipated expiration of the 90-day reciprocal tariff pause,” Fung added.
Additional highlights from the 1Q 2025 Data Center IT Semiconductors and Components Quarterly Report:
- The Server and Storage Systems Component market is forecast to grow by over 50 percent in 2025 despite tariff-related uncertainties.
- SK Hynix led the HBM market with a 64 percent revenue share, followed by Samsung and Micron.
- ARM CPUs now hold 25 percent of the server market, driven by the NVIDIA GB200 Blackwell ramp and hyperscaler custom deployments.
- Smart NIC and DPU revenues increased by 71 percent because of strong deployment of Ethernet adapters in AI clusters.
Dell’Oro Group’s Data Center IT Semiconductors and Components Quarterly Report tracks revenue, unit and capacity shipments and unit and capacity pricing, along with market share of major semiconductor and component manufacturers that supplies into the data center server and storage system markets starting from 2018. Technology of focus will be major server and storage semiconductors and components such as CPUs, accelerators such as GPUs, FPGAs, and custom AI ASICs, Ethernet Adapters and Smart NICs, HBM and DRAM, and HDDs and NAND/SSDs. In addition, we will provide a forecast of the demand for these components based on shipments of servers and storage system to the hyperscale cloud service providers and to the rest-of-the-market. To purchase this report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks infrastructure, and data center markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit https://www.delloro.com.
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