A data center is a network of computing and storage resources that enable the delivery of shared software applications and data. These centers can house large amounts of critical and important data, and therefore are vital to the daily functions of companies and consumers alike, with security and reliability of data centers as key factors. As such, IT spending on data center systems worldwide is expected to reach 237 billion U.S. dollars in 2021.

Cloud and hyperscale data centers

In the past, data centers were highly controlled physical infrastructures, but the cloud has since changed that model. Cloud IT infrastructure spending surpassed 74 billion U.S. dollars in 2020 and is forecast to rise further in the coming years. The evolution of technology, along with the rapid growth in demand for data across the globe, is largely driven by the leading hyperscale data center providers . To meet the demands across industries, firms are rapidly expanding and delivering new infrastructure options, with more than 600 hyperscale data centers expected worldwide in 2021. Hyperscale computing is necessary for cloud and big data storage, as well as other applications that are demanded in the modern, digital world.


To provide greater security and efficiency, many data centers are overseeing the widespread implementation of artificial intelligence (AI) in their processes and systems. AI technologies and tasks require specialized AI chips that are more powerful and optimized for advanced machine learning (ML) algorithms. As a result, data centers, as well as related infrastructure in servers and storage, represent an important opportunity for the global semiconductor industry .

Another interesting development in the data center industry is the rise of edge computing . IT infrastructure is moved into edge data centers, specialized facilities that are located nearer to end-users. IT equipment on the infrastructure edge capital expenditure is expected to amount to 8.5 billion U.S. dollars in 2021 and is forecast to surpass 100 billion U.S. dollars by 2028. The continued growth and adoption of technologies like 5G and IoT will contribute to this growth, with a reduction in network latency and improved service orchestration supporting the shift toward automation in data centers.


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