IDC in a recent market report said Intel’s Xeon E5-26xx server microprocessor will face challenges soon.
The high market average selling price (ASP) is attracting new microprocessor vendors to the server-class microprocessor market. These vendors are being encouraged by significant sources of demand, such as major cloud service providers and systems makers in China seeking an alternative to Intel.
In late 2016 and through 2017, several processor vendors will issue new products to compete with Intel’s mainstream product line, the Xeon E5-26xx series. These products include AMD’s x86-based Zen, Qualcomm’s ARM-based Hydra, Applied Micro’s ARM-based X-Gene 3, Cavium’s ARM-based ThunderX 2, and possibly Broadcom’s ARM-based Vulcan.
Server market
The revenue from x86 and ARM server microprocessor will increase 1.3 percent to $13.9 billion in 2016.
The size of the global server microprocessor market in terms of unit shipments will be 22.9 million units in 2016, an increase 3.5 percent.
IDC says the combined x86 and ARM server-class microprocessor revenues will log a compound annual growth rate (CAGR) of 2.2 percent from 2015-2020, reaching $15.3 billion in 2020.
Direct purchases by cloud service providers, such as Google and Amazon, and the use of server microprocessors in system categories outside of servers, such as storage systems and networking systems are the growth drivers for server microprocessors in 2016.
17.3 percent of x86 and ARM server processors — primarily Intel Xeon — were shipped for storage, networking, and embedded systems in the first quarter of 2016 against 8.8 percent in Q1 2013.
In 2017, ARM vendors will begin to gain market traction with their newest generation of designs after many years of ecosystem development and processor designs that failed to gain traction in the data center.
IDC says ARM processor vendors, such as Applied Micro and Cavium, have garnered notable design wins and partnerships from communications service providers (CSPs) and systems vendors.
The average contract price paid by a server microprocessor customer rose 25 percent from 2010 to 2015. Intel held 93 percent unit share in 2010 and 99.2 percent unit share in 2015.