AMD Expected to Occupy Over 20% of Server CPU Market and Arm 8% in 2023

[TheLostSwede]

AMD and Arm have been gaining up on Intel in the server CPU market in the past few years, and the margins of the share that AMD had won over were especially large in 2022 as datacenter operators and server brands began finding that solutions from the number-2 maker growing superior to those of the long-time leader, according to Frank Kung, DIGITIMES Research analyst focusing primarily on the server industry, who anticipates that AMD's share will well stand above 20% in 2023, while Arm will get 8%.

Prices are one of the three major drivers that resulted in datacenter operators and server brands switching to AMD. Comparing server CPUs from AMD and Intel with similar numbers of cores, clockspeed, and hardware specifications, the price tags of most of the former's products are at least 30% cheaper than the latter's, and the differences could go as high as over 40%, Kung said.




Such a gap makes a key difference to server companies as they usually procure their CPUs in large volumes and picking AMD's solutions would make a major reduction in their costs. Since Intel's and AMD's processors are both based on the x86 architecture, compatibility is not an issue that server companies need to worry about, Kung noted.

AMD CPUs' high number of cores also makes them perfect for the server environment as the higher the number of cores a CPU has, the more servicing capability it can offer. AMD's 96-core Genoa-architected EPYC processor was launched in the fourth quarter of 2022 with a 128-core CPU set to debut in the first half of 2023, while Intel's best offering in terms of the core number still stays at 60 at the moment.

Support from TSMC is the second driver. AMD's server CPUs are all made via TSMC's latest manufacturing process, allowing them to feature top-notch performances, noted Kung, adding that thanks to TSMC's advanced technologies and high yield rate, AMD has not had a problem with missing its product launch schedule. However, such is not the case with Intel.

The third driver is the fact that Intel is manufacturing all its top-tier CPUs in house. Information from Intel's upstream suppliers shows that Intel's in-house manufacturing technologies have been rather unstable during the past several years, while server brands and datacenter operators have often seen Intel delaying the volume production schedule of its new server platform.

Among datacenter operators, Microsoft and Google are the keenest in procuring servers powered by AMD's solutions. Currently, over 30% of server orders placed by the two cloud service providers are AMD-based models, while within server brands, HP Enterprise (HPE) is keener on AMD-powered servers.

Arm-based processors' penetration in the server market was a bit slower compared to AMD-based ones in 2022 in terms of market share increase, and the growth will decelerate even more in 2023, said Kung. However, in the long term, Arm-based processors will still have the potential for major growth.

Although Arm-based CPUs can achieve a neck-to-neck computing performance compared to x86-based ones from AMD and Intel while consuming much less power, compatibility is currently their biggest weakness.

Since most server programs are designed based on the x86 architecture, the problem is unlikely to fix until more Arm-based servers start to show up, attracting more middleware developers to join the market and write solutions to translate x86 codes for Arm systems.

However, datacenter operators and server brands are still aggressive about Arm processors' development in the server market. Amazon and Alibaba have already started working on Arm-based products before 2022, Microsoft and Google also began projects with Arm products in 2022, and HPE is expanding its adoption of Arm-based servers. Nvidia is now pushing its GPUs to support Arm architecture and Ampere is developing Arm-based chips. In the upcoming years, the opportunity from ESG is expected to take off for Arm CPUs as demand from large-scale datacenter and edge computing servers will surge, Kung added.

View at TechPowerUp Main Site | Source

 

[Daven]

Some experts say a monopoly is busted when share drops below 70%. Looks like that will happen to Intel this year in the server market.

Also this report is only looking at the CPU vendor in servers. Servers use to have between 1 and 8 CPU sockets and no GPUs. That time brought huge revenues to Intel as 4 and 8 socket SKUs demanded a high premium. Now servers purposefully do not want CPU sockets taking up space in order to have room for GPUs. 1 and 2 CPU sockets are now the norm taking away a HUGE revenue source from those CPU vendors unlucky enough to have GPUs replacing the loss in volume (Intel cough).

 

[Denver]

Considering all the performance and efficiency advantages of recent EPYC processors, it is difficult to understand why anyone would choose to buy Xeon processors instead...maybe a matter of brand loyalty or compatibility, Idk.

 

[AnotherReader]

Considering all the performance and efficiency advantages of recent EPYC processors, it is difficult to understand why anyone would choose to buy Xeon processors instead...maybe a matter of brand loyalty or compatibility, Idk.

I think it's also a matter of supply. AMD was unable to meet demand for EPYC in the past.

 

[Daven]

Considering all the performance and efficiency advantages of recent EPYC processors, it is difficult to understand why anyone would choose to buy Xeon processors instead...maybe a matter of brand loyalty or compatibility, Idk.

AMD probably cannot manufacture enough volume to replace Intel overnight. Nor should we want them to. Replacing one monopoly for another won’t help matters. Another poster said it best, we want Intel and AMD to provide 50/50 share across all market segments and stay there for as long as possible leap frogging each other on advancements.

 

[Mac the Geek]

I'd like to see more info on the ARM sub-market. I assume that almost all of them are custom-designed processors, like the Graviton line that underpins AWS. But how many customers are moving to ARM, and what they're looking for in the space, are questions that pique my curiosity.

 

[TheLostSwede]

Considering all the performance and efficiency advantages of recent EPYC processors, it is difficult to understand why anyone would choose to buy Xeon processors instead...maybe a matter of brand loyalty or compatibility, Idk.

Meta doesn't agree...

https://twitter.com/x/status/1628804828192477184

 

[Denver]

Meta doesn't agree...

View attachment 285198

https://twitter.com/x/status/1628804828192477184

I don't get it... What's the point of that if chiplets are more area efficient production as well? Intel's design wastes much more silicon and energy in production. No wonder the company is self-destructing.

PS: I would come to the conclusion that it is complete madness when seeing the comparison on the slide: Epyc 7702 @ 64c vs Xeon 2234 @ 4c 14nm lol

 

[AnotherReader]

Meta doesn't agree...

View attachment 285198

https://twitter.com/x/status/1628804828192477184

Their graph says something else: Xeon Gold 6348 has both lower performance and higher embodied carbon than the EPYC 7702. Only low performance models like the E-2234 have a low carbon footprint. That isn't surprising as it's a small quad core CPU while the EPYCs have to pay the cost of that massive IO die in addition to the CPU chiplets.

 

[Steevo]

I don't get it... What's the point of that if chiplets are more area efficient production as well? Intel's design wastes much more silicon and energy in production. No wonder the company is self-destructing.

PS: I would come to the conclusion that it is complete madness when seeing the comparison on the slide: Epyc 7702 @ 64c vs Xeon 2234 @ 4c 14nm lol

Shhhh Dylan is getting some sweet rewards for shitposting on Twitter from the blue guy.

 

[Crackong]

Considering all the performance and efficiency advantages of recent EPYC processors, it is difficult to understand why anyone would choose to buy Xeon processors instead...maybe a matter of brand loyalty or compatibility, Idk.

Some companies might have made their critical software based on Intel specific libraries or heavily relying on accelerators such as AMX.
Unfortunately they have to keep paying the Intel tax.

 

[BoboOOZ]

Some companies might have made their critical software based on Intel specific libraries or heavily relying on accelerators such as AMX.
Unfortunately they have to keep paying the Intel tax.

The server market is very conservative, they are more interested in application compatibility and reliability of supply than pure performance and even price. They take years to change a platform.

The reverse to that is that once those guys go AMD, AMD will have to screw up very badly for them to get back to Intel. It's an extremely stable source of revenue.

 

[Mac the Geek]

Both the previous comments are absolutely true. I work with servers on a daily basis, and it's been years since one of the customers I support has even dabbled in AMD hardware. (HP [yes, before the HPE split] DL385 G6 was the last time one of my customers bought AMD.) I don't doubt that the market-share report is accurate; I just have customers who aren't willing to stray from the Xeon path.

In my father's day, the adage was "nobody ever got fired for buying IBM". Today, that's Intel. They have so much corporate inertia driving sales, it's taken years of being second-best for their market share to erode to 70%.