The global data center semiconductor market is projected to grow from 86.8 billion USD in 2024 to 265.8 billion USD by 2

The data center semiconductor market is set to expand significantly in the coming years. Research and Markets released a report on July 6, 2026, projecting growth from USD 86.8 billion in 2024 to USD 265.8 billion by 2029, representing a robust 25.1% CAGR. This expansion is primarily driven by enterprises increasingly adopting generative AI for applications including content creation, customer service automation, drug discovery, and personalized marketing. The rising adoption is fueling demand for high-performance AI servers capable of managing intensive computational workloads.

Within this market, the power stage segment is anticipated to hold the largest market share by 2029. Power stages play a vital role in efficient power conversion and delivery across data center components. Modern AI-driven workloads require extremely high current at low voltages, necessitating advanced power stages that integrate elements such as MOSFETs and gate drivers. These components are crucial for efficient power regulation, minimizing losses, and reducing heat generation. As server architectures become increasingly power-dense, each component including CPUs, GPUs, memory modules, and networking chips requires multiple power stages, leading to high unit volumes per server. The shift toward 48V power distribution systems in hyperscale data centers further boosts demand for high-efficiency power stages capable of managing higher input voltages.

The multi-channel ADC/DAC segment is estimated to record the highest CAGR during the forecast period. This growth is driven by the increasing necessity for precise, real-time monitoring and control in complex, power-dense AI infrastructure. As data centers expand to support high-performance computing and AI workloads, the need to monitor multiple analog signals across various systems intensifies. Multi-channel ADCs convert numerous analog inputs into digital data for system analytics, while DACs facilitate control of power and thermal management systems. According to the report, 30% of data center servers are expected to be equipped with AI semiconductors by 2029. Additionally, data center power consumption is projected to increase approximately tenfold over the next five years.