On July 9, according to Reuters, Arm announced that the number of server customers using processors based on the Arm architecture has grown to 70,000, a 14-fold increase since 2021.
The rapid growth in Arm’s server market customer base is primarily driven by the surge in demand brought about by the recent boom in generative artificial intelligence computing.
Arm’s CEO, Rene Haas, also stated that a significant portion of Arm’s growth in the data center market is due to artificial intelligence. Since 2021, with the explosion of the AI boom, the number of startups using Arm chips has also surged 12 times.
Currently, major cloud computing giants such as Amazon AWS, Alibaba Cloud, Google, Microsoft, and Huawei have launched their own Arm-based server processors, which are widely used in their own data centers. For example, Amazon has released several generations of server processors since 2018, including AI versions, and has deployed millions of Arm-based chips in its data centers.
According to a report released by market research firm Counterpoint at the beginning of 2023, in 2022, AWS and Ampere, two Arm server CPU manufacturers, captured 4.68% of the global server CPU market by revenue.
Another research firm, Bernstein Research, predicts that in 2023, nearly 10% of servers globally will use Arm server CPUs, with half of them deployed by AWS, which has over 2 million self-developed Graviton chips in its cloud.
Importantly, Nvidia’s AI chips, such as the GB200/300 series, integrate Nvidia’s self-developed Arm architecture Grace CPU, which has been widely adopted by numerous AI server manufacturers, leading to a greater number of downstream AI software customers.
Notably, Qualcomm has announced its return to the Arm server chip market, acquiring SerDes giant Alphawave for $2.4 billion.
Additionally, Arm seems to be developing its own server CPUs for large cloud service providers like Meta. If Meta deploys them in bulk, it will inevitably control a significant portion of the server CPU market, as Meta is one of the major procurement customers for servers globally.
Recently, SoftBank Group announced its acquisition of Ampere for $6.5 billion, and SoftBank is also the majority shareholder of Arm. This acquisition is seen as a move to help Arm better expand into the server market.
Rene Haas stated that Arm has achieved considerable revenue from selling data center chips based on the Arm architecture and is currently working to expand its business into the PC market.
Arm previously projected that this year, the proportion of servers shipped to top-tier hyperscale cloud service providers based on the Arm architecture would approach 50%, while Arm architecture processors would account for 40% of the overall shipment volume in the PC and tablet market this year.
Despite the booming development of chips related to building AI data centers, sales in many other semiconductor markets, such as PCs and mobile devices, remain sluggish. Coupled with uncertainties such as the US-China trade war and reciprocal tariffs, Arm declined to provide annual financial guidance when announcing its results in May.
Historically, the advantage of Arm architecture processors has been their high energy efficiency, making them very suitable for mobile applications. Over the years, Arm has leveraged its monopoly position in the mobile market to accumulate a vast ecological advantage. As the server and PC markets increasingly focus on processor energy efficiency, Arm has also begun to experience rapid growth in these two markets, driving a swift increase in the number of related applications and developers.
According to data disclosed by Arm, the number of applications running on the Arm architecture has roughly doubled since 2021, reaching 9 million; the number of developers based on the Arm architecture has also increased by 1.5 times, reaching 22 million.
Editor: Chip Intelligence – Wandering Sword
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