Nvidia reported earnings yesterday. We do not need to recap those since we imagine all of you were attending watch parties for the event. But we do want to update our quarterly look at the market for data center processors. The quick summary of which is that past trends continue and all roads point to Nvidia.
Nvidia now claims 82% of the data center wallet, up a bit from last quarter, and up from 66% this time last year. AMD is 80 bps in share below Intel, and looks set to overtake them in the coming quarter. If we strip out Nvidia’s networking revenue, which the others do not include in their figures, then Nvidia comes in at 79%.
AMD, Intel and Nvidia all report “Data Center Revenue”, although their definitions vary a bit of what gets included. We think of these figures as “Wallet Share”, not market share. To really size the market for data center processors we would need to include the internal silicon from the hyperscalers. That is challenging as it is not clear what dollar amount we should use to account for them. We have a pretty good sense of how big those deployments are in units, but there is no reliable way to track this data on a regular basis.
One final note. We also look at TSMC’s revenue segmentation. They made big news this quarter when their “HPC” segment overtook Mobile and PC for the first time, reflecting the massive growth in data center which gets included in HPC. Nvidia’s cost of goods sold for all products in the quarter was $7.5 billion which is 69% of TSMC’s HPC revenue. However, this figure is misleading as not all of Nvidia’s products fall into the HPC category. More importantly, Nvidia’s Data Center revenue includes HBM memory which they mark up. They source that directly from memory makers like SK Hynix and not TSMC. That being said, we think using TSMC as a yardstick provides some context as to just how large the market has gotten.
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