High Performance Computing Market Analysis Report By Component, By Deployment, By End-use, By Region And Segment Forecasts From 2020 To 2027

Industry Insights

The global high-performance computing (HPC) market size was accounted for USD 39.1 billion in 2019 and expected to grow with a CAGR of 6.5% over the forecast period, from 2020 to 2027. The increasing need for high-efficiency computing, growing preference for hybrid high-performance computing solutions, advancement in virtualization, and diversification coupled with the expansion of the IT industry are major factors driving the market growth. The ability of the HPC system to process a large amount of data at high speed is expected to drive the market in defense agencies, government agencies, energy companies, utilities, and academic institutions to adopt these systems.  The COVID-19 pandemic is already ushering multiple challenges across various sectors. The market has witnessed significant growth till 2019 while it is expected to witness a decline in 2020.

The growing deployment of cloud computing coupled with several initiatives taken by governments for digitalization, especially in developing countries is expected to drive the HPC market growth. For example, the UAE government introduced digital transformation projects like Smart Dubai and Smart Abu Dhabi. Therefore, such initiatives are expected to boost the demand for cloud computing as well as HPC systems.

HPC is also known as supercomputing that helps for parallel processing to process data with high speed and accuracy. Parallel processing is basically distributing instructions among multiple processors which in turn reduces the time required for running algorithms. High-performance computing is a cluster of computers used to simplify difficult business procedures, thereby expected to boost the demand for HPC systems among enterprises over the forecast period.

The introduction of Exascale computing is projected to open new market growth opportunities during the forecasted period. Exascale computing has the ability to solve billions of calculations per second. It also offers modeling solutions and advanced simulations that help to identify key challenges in energy, natural security, scientific discovery, and economic competitiveness, among others. Moreover, HPC requires high storage and high-speed bandwidth to process a huge amount of data accurately and efficiently.

The U.S. federal agencies such as the office of science and the National Nuclear Security Administration (NNSA), which come under the department of energy, have initiated the project namely the Exascale Computing Project. This initiative is expected to fuel high-performance computing market growth across the globe.

Incumbents of government agencies, educational institutes, defense agencies, research institutions, and the manufacturing industry often have to solve complex problems and perform complex calculations. In addition, space exploration, weather forecasting, and other applications involve complicated calculations as well as the processing of large data, where the HPC system helps to process this large volume of data efficiently and accurately.

Components Insights

Based on components, the market is segmented into servers, storage, software, services, cloud, networking devices, and others. In 2019, the server segment accounted for the largest market share of over 32.0% and is projected to grow with a significant growth rate during the forecast period. This is due to an increase in the number of data centers, as several enterprises are investing in on-premise infrastructure and colocation to fulfill the demand for public cloud services. In addition, this industry is marked by key HPX servers designing companies like IBM Corporation, Dell Inc., Fujitsu Limited, and Lenovo.

The services segment is projected to grow with a CAGR of over 4.0% during the forecast period. Industry players offer several services such as support, maintenance, and management. Support is required while implementing HPC while maintaining services include troubleshooting and up-gradation of existing systems.

Deployment Insights

Based on deployment, the market is classified into cloud and on-premise. In 2019, on-premise held the largest market share of more than 59% and is estimated to grow with a significant CAGR from 2020 to 2027. Government agencies have data security concerns regarding citizens' personal data and enterprises have concerns related to the security of organizational data. Therefore, on-premise deployment is still preferred by enterprises and government agencies over cloud deployment. These factors are expected to drive market growth across the globe, as several countries depend on on-premise deployment to maintain national security.

The cloud segment is projected to grow with a CAGR of more than 7.6% during the forecast period. Cloud computing helps organizations to reduce operational costs as organizations do not need to invest in any additional computing services. Further, it enhances efficiency cost-effectively which is expected to drive the segment growth during the forecast period.

End-use Insights

Based on end-use, the high-performance computing (HPC) market is segmented into healthcare and bioscience; gaming; government and defense; media and entertainment; BFSI; retail; transportation; manufacturing; education and research; and others. In 2019, the government and defense segment accounted for the largest market share of more than 24.0%. This high revenue share can be attributed to government & defense agencies are adopting cutting-edge IT solutions to improve computing efficiency.

Further, governments across several countries are shifting towards HPC to respond to the COVID-19 pandemic. For example, Hewlett Packard Enterprise Development LP is engaged in offering AI and HPC solutions to fight against the COVID-19pandemic. Several organizations across the globe are using HPC to develop a vaccine against coronavirus.

Manufacturing processes are time-consuming and computation-intensive. Therefore, manufacturing industry incumbents are adopting CAD software and simulation along with HPC systems. HPC system can be used for computational structural mechanics, computational electromagnetics, and computational fluid dynamics in the manufacturing industry to ensure rapid access, enhance computational speed and performance, thereby this segment is expected to witness significant growth over the forecast period.

Regional Insights

North America held the largest market share in terms of revenue, in 2019.  The need to process a large amount of data along with having strong security measures has increased. Therefore, several enterprises are adopting new technologies which are expected to drive the market growth in this region, especially in the U.S. Furthermore, this region is a hub of global conglomerates like General Motors and Boeing along with SMEs which are expected to adopt HPC systems extensively to curb technical errors. This factor is projected to grow a significant demand for HPC in this region.

Asia Pacific is estimated to grow with the fastest CAGR of more than 7.5% from 2020 to 2027. The growing adoption of HPC for weather forecasting and research is a major factor driving the market growth. China market is one of the leading markets in the Asia Pacific. Moreover, in this region, China is home to supercomputers including Sunway TaihuLight and Tianhe-2 (Milkyway-2). In China, the National University of Defense Technology developed Tianhe-2 (Milkyway-2) and was funded by the government of Guangdong province and the government of Guangzhou city.

COVID-19 Impact Analysis

The COVID-19 outbreak hurts market growth. Due to several government restrictions such as regulations for people movements, limitations for foreign trade, and halt in operations of the manufacturing industry, the demand for HPC has declined across transportation, retail, and other sectors.

However, HPC is playing a vital role during this pandemic, as many research institutes are also finding applications in developing and manufacturing vaccination and medicines. The high-performance computing system is helping researchers to accelerate the development of drugs and vaccines. It is further assisting in public health development efforts against the outbreak of new coronavirus. The biotech & life sciences communities are facing scientific challenges due to the novel coronavirus pandemic.HPC helps total computing capabilities from the world's most advanced and powerful computers to help researchers execute complex computational programs. This is expected to drive the demand for HPC during this period.

High-Performance Computing Market Share Insights

The market is highly competitive in nature due to the presence of a large number of market players including Cisco Systems, Inc.; Advanced Micro Devices, Inc. (AMD); Cray Research, Inc.; Atos SE; and Dell Technologies, Inc. among others. Governments across several countries are encouraging academic and research institutions to adopt advanced IT systems to boost economic development. Thus, market players are engaged in offering advanced solutions to strengthen their footprints in a competitive market. For example, in 2018, the Garvan Institute of Medicine entered into a partnership with Dell Technologies, Inc. to get access to the company’s performance computing in genomics research.

The growing deployment of cloud computing is one of the major factors for market growth. Thus, several key players like Cisco Systems, Inc.; HP, Inc.; Intel Corporation; Cray Research Inc.; and Dell Technologies, Inc., among others are focusing on mergers, collaborations, acquisitions, and partnerships with cloud computing pioneers to enhance their offerings and position in the market. For example, in 2018, Atos SE partnered with Google Cloud to offer secure cloud solutions. Further, by this partnership, Atos SE expects to adopt cloud computing and enable companies to grow their businesses by offering access to advanced cloud infrastructure. The major players operating in this market are Dell Technologies Inc., Fujitsu, Atos SE, Intel Corporation, Cisco Systems, Inc., IBM Corporation, Advanced Micro Devices, Inc., and Hewlett Packard Enterprise Development LP.

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 in each of the sub-segments from 2016 to 2027. For this study, Million Insights has segmented the global high-performance computing (HPC)market report based on components, deployment, end-user, and region:

• Components Outlook (Revenue, USD Billion, 2016 - 2027)
    • Servers
    • Storage
    • Networking Devices
    • Software
    • Services
    • Cloud
    • Others

• Deployment Outlook (Revenue, USD Billion, 2016 - 2027)
    • On-Premise
    • Cloud

• End-use Outlook (Revenue, USD Billion, 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 Billion, 2016 - 2027)
    • North America
        • The U.S.
        • Canada
    • Europe
        • The U.K.
        • Germany
        • France
    • The Asia Pacific
        • China
        • India
        • Japan
        • Singapore
    • Latin America
        • Brazil
        • Mexico
    • Middle East & Africa