High Performance Computing Market Size, Share & Trends Analysis Report By Component (Servers, Services), By Deployment (On-premise, Cloud), By End-use, By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global high performance computing market size was valued at USD 39.1 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 6.5% from 2020 to 2027. The growing need for high-efficiency computing, continued diversification, and expansion of the IT industry, advances in virtualization, and rising preference for hybrid High Performance Computing (HPC) solutions are some of the factors expected to fuel the growth of the market. The ability of HPC systems to process large volumes of data at higher speeds is prompting government agencies, defense agencies, academic institutions, energy companies, and utilities to adopt HPC systems, which also bodes well for the growth of the HPC market. The COVID-19 pandemic is already ushering a host of challenges to several sectors. According to industry experts, the HPC market witnessed significant growth until 2019. However, the market is projected to witness a substantial decline in 2020.

However, the market is expected to gradually pick up its pace from 2021 owing to increasing demand for high-performance computing due to its benefits, such as increased computational power and ability to calculate complex algorithms. The rising popularity of cloud computing, coupled with the digitization initiatives being adopted by various governments, would play a decisive role in catapulting the market growth over the forecast period. For instance, the Government of the United Arab Emirates (UAE) has launched digital transformation projects, such as Smart Abu Dhabi and Smart Dubai. Such projects would encourage the adoption of cloud computing and trigger the demand for HPC systems.

HPC, which is also referred to as supercomputing, envisages the use of parallel processing to process the data at higher speeds and accuracies and provide outputs efficiently. Parallel processing is achieved by distributing the program instructions among several processors so that the time taken to run the algorithms is reduced drastically. HPC systems often involve a cluster of computers, whose aggregate power can offer high computational capabilities. In other words, HPC systems can potentially simplify complex business procedures. As a result, the demand for HPC systems is expected to grow.

The emergence of exascale computing is expected to open new growth opportunities for the HPC market over the forecast period. Exascale computing is the ability of computing systems to perform a billion calculations per second. Exascale computing also provides advanced simulation and modeling solutions that can potentially address the key challenges in natural security, energy, economic competitiveness, and scientific discovery. HPC systems require higher performance bandwidth and memory capacity to process large volumes of data efficiently and exascale computing can address both these challenges.

Meanwhile, the National Nuclear Security Administration and the Office of Science, both of which fall under the U.S. Department of Energy, have embarked upon a collaborative effort called the Exascale Computing Project. Such projects are also anticipated to fuel the growth of the market. Incumbents of the manufacturing industry, defense agencies, government agencies, educational institutes, and research institutions often have to perform complicated calculations and solve complex problems. Applications such as space exploration and weather forecasting also involve complex calculations and processing of large volumes of data. High processing power and processing efficiency are crucial in such cases and HPC systems can be very useful for these applications.

Component Insights

The servers segment held the largest revenue share of 32.58% in 2019. This is attributed to a rise in the number of data centers as various mid-size enterprises and businesses are in the process of investing in colocation and on-premises infrastructure to support the growing demand for public cloud services. Additionally, the market is marked by the presence of key HPC servers manufacturing companies, such as Fujitsu Limited, IBM Corporation, Dell Inc., and Lenovo.

The services segment is expected to expand at a CAGR of 4.1% from 2020 to 2027. HPC vendors provide various services, including maintenance, support, and management. Support is particularly required while implementing HPC systems and start using them. On the other hand, maintenance services involve upgrading existing systems and troubleshooting.

Deployment Insights

The on-premise segment held the largest revenue share of 59.24% in 2019.  This is attributed to the fact that governments remain keen on securing the sensitive data related to the national security and personal data of the citizens and enterprises are concerned about the protection of their respective organizational data. As a result, on-premise infrastructure is still being preferred over a cloud-based infrastructure. For instance, in Mexico, although the Data Protection Laws, which came into force in 2010, allow the distribution of data assets across Mexico, the government is still of the opinion that all the sensitive data being maintained by various government agencies and personal data of the citizens should remain within the Mexican jurisdiction in order to maintain the national security. Such factors are expected to fuel the growth of the on-premise segment.

The cloud segment is expected to expand at the highest CAGR of 7.6% over the forecast period. Cloud deployment helps organizations in minimizing their operational costs as they do not have to invest in any additional computing resource. Other benefits such as enhanced efficiency and cost-effectiveness are also expected to fuel the growth of the cloud segment.

End-use Insights

The government and defense held the largest revenue share of 24.21% in 2019. This is attributed to government and defense agencies aggressively adopting cutting-edge IT solutions in order to enhance the computing efficiency. Government agencies are expected to adopt HPC systems in order to support digitization initiatives and contribute to economic development.

Furthermore, governments of several countries are inclined towards using HPC as a response to the COVID-19 pandemic. For instance, according to Hewlett Packard Enterprise Development LP, the company is engaged in providing HPC and AI solutions to fight against the pandemic. The U.S. Department of Energy’s Argonne National Laboratory (ANL), The Lawrence Livermore National Laboratory (LLNL), France’s National Center for Scientific Research (CNRS), together with GENCI, are using the HPC solutions to discover the vaccine for the virus.

Meanwhile, manufacturing processes tend to be computation-intensive and time-consuming. Hence, incumbents of the manufacturing industry often adopt simulation and CAD software, along with HPC systems. In the manufacturing industry, HPC systems can be particularly used for computational fluid dynamics, computational structural mechanics, and computational electromagnetics in order to enhance the performance, improve the computational speed, and ensure rapid access to data, thereby resulting in the segment growth over the forecast period.

Regional Insights

North America held the largest share of 39.95% in 2019. This is attributed to the region being the largest regional market for technology-based solutions. Additionally, it is anticipated to be a strong player in the global economy, especially in the implementation and development of new technologies. While the need to process large volumes of raw data is growing, having robust security measures in place is of paramount importance. This is driving the need to implement the latest technologies, which, in turn, is encouraging the adoption of HPC systems.

Moreover, North America is home to some of the large enterprises, such as Boeing and General Motors, which along with other SMEs, are aggressively adopting HPC systems to help them in easing the technical restraints they are facing. As a result, the adoption of HPC systems is growing in North America.

Asia Pacific is projected to expand at the highest CAGR of 7.9% over the forecast period owing to the growing adoption of HPC systems for scientific research and weather forecasting. At the same time, China happens to be among the top 10 countries leading in the high performance computing market. China is also home to supercomputers, such as Tianhe-2 (Milkyway-2) and Sunway TaihuLight. Tianhe-2 (Milkyway-2) was developed by the National University of Defense Technology of China and was funded by the government of Guangzhou city and the government of Guangdong province.

Key Companies & Market Share Insights

The market is highly consolidated and is characterized by intense competitive rivalry as few market players are conducting their business operations worldwide. The market has witnessed various inorganic growth strategies, such as acquisitions & mergers, partnerships, and collaborations, adopted by companies over the recent past. For instance, in February 2020, Atos SE announced the acquisition of Maven Wave, a U.S.-based technology and cloud consulting organization. With this acquisition, Atos SE aims to enhance its business in cloud-solutions, machine learning, and data analytics in multi-cloud platforms.

Market players are also focusing on expanding their businesses by launching various partnership programs across different regions. Cloud computing is one of the potential factors responsible for the growth and rising adoption of HPC systems. Owing to this, various key players, such as Cray Research Inc.; Cisco Systems, Inc.; Dell Technologies, Inc.; HP, Inc.; and Intel Corporation, focus on acquisitions, mergers, and collaborations or partnerships with major pioneers in the cloud computing market to introduce cloud computing or to provide cloud computing solutions in order to gain a competitive edge and enhance their product portfolio. For instance, in April 2018, Atos SE entered into a partnership with Google Cloud to provide enterprises secure cloud solutions, thereby enhancing digital transformation. Furthermore, through this partnership, Atos SE expects to thrive in cloud computing technology and enable companies to enhance their businesses by providing access to advanced cloud infrastructure. Some of the prominent players in the high performance computing market include:

• Atos SE

• Advanced Micro Devices, Inc.

• Hewlett Packard Enterprise Development LP

• Cisco Systems, Inc.

• Dell Technologies Inc.

• Fujitsu

• Intel Corporation

• IBM Corporation

High Performance Computing Market Report Scope 

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global high performance computing market report based on component, deployment, end-use, and region:

• Component Outlook (Revenue, USD Million, 2016 - 2027)

  • Servers

  • Storage

  • Networking Devices

  • Software

  • Services

  • Cloud

  • Others

• Deployment Outlook (Revenue, USD Million, 2016 - 2027)

  • On-premise

  • Cloud

• End-use Outlook (Revenue, USD Million, 2016 - 2027)

  • Banking, Financial Services, and Insurance (BFSI)

  • Gaming

  • Media & Entertainment

  • Retail

  • Transportation

  • Government & Defense

  • Education & Research

  • Manufacturing

  • Healthcare & Bioscience

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

  • Europe

    • The U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • Singapore

  • Latin America

    • Brazil

    • Mexico

  • The Middle East & Africa