The future of the semiconductors industry will be shaped by a range of disruptive themes, with data centres being one of the themes that will have a significant impact on semiconductors companies. A detailed analysis of the theme, insights into the leading companies, and their thematic and valuation scorecards are included in GlobalData’s thematic research report,Data Centers – Thematic Research. Buy the report here.
A data centre is a facility used to house computer systems and associated networking equipment to capture, store, analyse, and re-transmit data.
Covid-19 lockdowns stimulated extra demand for cloud services and extended IT infrastructure. According to Synergy Research, Microsoft, Amazon, and Google account for over half the world’s 600 hyperscale data centres. Apple, Alibaba, and Tencent follow them. The latter pair are under pressure from Beijing to expand their global data centre capacity to boost their cloud services. A major build-out of hyperscale data centres is underway, with the global base expected to increase significantly by 2025, calling for a lot more silicon infrastructure.
Over the next few years, new massively parallel processor chips will arrive to help speed up data centre throughput. At the top of the agenda is developing lower power draw server and networking chips. Arm-based processors will make inroads here. By 2025, multifunctional SoCs and 3D packages of chips will be meeting that agenda.
However, not all companies are equal when it comes to their capabilities and investments in the key themes that matter most to their industry. Understanding how companies are positioned and ranked in the most important themes can be a key leading indicator of their future earnings potential and relative competitive position.
Insights from top ranked companies
Amazon Web Services (AWS) is a leader in the hyperscale cloud services sector because of the potency of its on-demand compute and storage solutions portfolio. As an online retailer, Amazon created the IaaS market with the 2006 launch of its Elastic Compute Cloud (EC2) service, which tapped excess data centre capacity from its ecommerce operations to deliver a low-cost, high-volume virtualised compute and storage service for clients. Amazon has built its own data centres and designs and makes its own data centre processor chips, reducing its dependencies on Intel and AMD. The company will continue to use SDN in its data centre to offer its hardware and platforms as a service. One of Amazon’s key challenges is sustainability. It has pledged to be carbon neutral by 2040, which will be one of its hardest challenges.
Alibaba is China’s biggest home-grown cloud provider. It is very strong in ecommerce, web hosting, and multimedia services, including content delivery network (CDN) solutions, due to its leadership position in these areas in its home territory. However, it lacks a strong focus on other pieces of the data services spectrum, both at the low end in colocation and disaster recovery as a service (DRaaS) and at the high end in hybrid cloud and managed services. Alibaba’s strength outside of China and Asia has been enhanced with new data centres in Indonesia, Malaysia, and India and through the rapid expansion of its global partner ecosystem. The company is building its capabilities in Europe with new data centres in the UK and through partnerships with Equinix and Vodafone.
NVIDIA is a leader in GPUs, which were originally developed to handle video games but have made their way into the data centre. NVIDIA’s CEO Jensen Huang wants to become the leading supplier of the core technologies that power large-scale data centres. NVIDIA is also making big bets in the SDN industry after buying networking and data centre interconnects supplier Mellanox.
To further understand the key themes and technologies disrupting the technology industry, access GlobalData’s latest thematic research report on Data Centers.
- Silicon Motion
- Horizon Robotics
- SK Hynix
- LAM Research
- Rigetti Computing
- Analog Devices
- Cadence Design Systems
- On Semiconductor
- Applied Materials