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Apple’s rapid transition to an Arm-based system-on-chips showed the industry how fast such a transition is possible if properly architected. Canalys analysts believe that Arm’s architecture is progressing so fast that Arm-powered SoCs will take a significant share of the PC market and half of the cloud server market in just four years. But not everyone in the industry is so optimistic.
“By 2026, not 2050 but 2026, four years from now, half of cloud processors will be based on ARM, 30% of computers will be based on ARM,” said Steve Brazier, president and CEO of market research firm Canalys, at an event, DigiTimes reports (opens in a new tab). “It’s an extraordinary event and an industry-changing event that just hasn’t been taken seriously enough.
30% of computers by 2026
Arm already controls a large part of the PC market. Almost 100% of the PCs Apple sells are based on the M-series SoCs today, and in Q3 2022, it controlled 13.5% of the PC market in terms of units, according to IDC. (opens in a new tab). Moreover, the company increased its unit shipments from 7.174 million Macs in Q3 2021 to 10.060 million systems in Q3 2022 amid deteriorating demand, which is quite an achievement. Meanwhile, Arm-powered SoCs also power many inexpensive Chromebooks. Although such systems are not very popular, it is probably safe to say that the Arm architecture already commanded at least 15% of the PC boxes sold in Q3 2022.
According to Dean McCarron of Mercury Research, this assumption may be a bit too optimistic. He estimates that in Q3 2022, Arm commanded 13.1% of PC client processors, up from 9.4% in Q2 2022 and up from 8.9% in Q3 2022. It should be noted that while IDC counts PCs sold, Mercury Research counts CPUs sold. and GPUs that could be sold this quarter or next. Considering inventory correction at PC manufacturers and increasing sales of Apple PCs, it makes sense that the share of sold x86 CPUs decreased in the third quarter. In any case, the share of Arm processors is growing because of Apple and Chromebooks.
“We notice that within the Chromebook market, it looks like Arm’s share seems to have increased in the quarter, even though the market was very weak,” McCarron told Tom’s Hardware.
Arm vs x86 Consumer Market Share Q2 2022
| Arm vs x86 Market Mud | QQ22 | 2Q22 | 1Q22 | 4Q21 | 3Q21 | 2Q21 | 1Q21 | 4Q20 | 2Q20 |
|---|---|---|---|---|---|---|---|---|---|
| Arm Unit Share | 13.1% | 9.5% | 11.3% | 10.3% | 8.3% | ~7.0% | 5.9% | 3.4% | Less than 2% |
The head of Canalys believes that Arm has the potential to grow further in the PC space, especially if other major PC suppliers such as HP, Dell, Lenovo, Acer and Asus come up with their own Arm-based SoCs. However, he never mentioned – at least according to the DigiTimes story – Qualcomm’s efforts to move its Snapdragon platforms into always-connected laptops from Lenovo and HP and then come up with something more powerful based on Nuvia technologies. However, Qualcomm could become a major player, especially in notebooks.
We can hardly imagine HP, Dell or Lenovo developing their own Arm-based SoCs for their PCs to differentiate themselves from each other and offer unique competitive advantages. Developing chips is expensive these days, and since these companies sell boatloads of computers with completely different configurations, they’ll need several different SoCs to address all their markets. Given the relatively thin profit margins on the computer market, it is unlikely that these companies will try to make their processors replace those of AMD or Intel. Meanwhile, they can start ordering customized versions of chips from the major CPU designers. With multi-chip designs like Intel’s Meteor Lake, it should be pretty easy to add a third IP to the processor, though we’re guessing.
It remains to be seen whether the Arm architecture will actually capture an additional 15% – 17% of the consumer PC market in the next four years as Apple gains share (although we don’t expect Apple to dominate a third of the PC market by 2026) or because the joint effort from Apple, Qualcomm and MediaTek will play their part. But with so much work happening around Arm, the technology is poised to increase its adoption.
Meanwhile, Arm adoption in the Windows space will largely depend on the experience of Arm-based machines running Windows 12, which happens when Qualcomm launches its Nuvia-based Snapdragons.
“It will be an incredible shock for Intel and AMD to suddenly find themselves fighting to protect their business,” Brazier said.
50% of Cloud Servers by 2026
Servers are another frontier that the Arm architecture has entered reasonably recently thanks to data center SoCs from Ampere, AWS and Huawei. According to Omdia, Arm SoCs controlled about 7.1% of the server market in Q2 2022. Omdia only tracks data center machines, so we are talking about blades, rack servers, white-box servers used by hyperscalers, tower servers and hyper-converged. infrastructure servers, but not edge servers, mission/business critical machines and other niche markets.
In the coming years, we will see more Arm server processors from other manufacturers, such as SiPearl and Chinese cloud giants, assuming they can develop SoCs that they can produce in volume with decent yields and ship them to China without infringing the recent one. US export regulations. Therefore, the share of Arm in data centers will increase.
As costs of operating cloud machines increase, designing highly custom SoCs for specific applications makes sense, and CPU cores based on the Arm architecture can be customized to meet the requirements of particular applications. Moreover, SoCs are, by definition, designed with specific requirements in mind.
In fact, even Intel acknowledges that custom chips make a lot of sense for cloud servers, which is why it’s willing to produce both Arm- and x86-based SoCs for IFS customers as part of the IDM 2.0 strategy.
But neither Intel nor AMD is giving up half of the cloud server market without a fight. AMD is set to release its 128-core codenamed Bergamo processor based on the Zen 4c microarchitecture optimized for cloud and hyperscalers. Intel, on the other hand, builds a host of special-purpose accelerators into its 60-core Sapphire Rapids CPU to address the specific needs of both enterprise and hyperscale customers.
However, not everyone needs Arm-based servers. Enterprises that use tens of thousands of servers are unlikely to adopt Arm because they run applications developed for x86, and the benefits of Arm for them are not obvious. Therefore, Brazier believes that cloud servers will be the main market that Arm-based SoCs will initially address. He believes that Arm’s advantages in this market are so significant that the architecture will be used by 50% of cloud server SoCs.
In the coming years we will see more Arm server processors from other manufacturers, such as SiPearl and Chinese cloud giants, assuming that they can develop SoCs that they can produce in volume with decent yields and ship them to China without violating the recent United States. export regulations. Therefore, the share of Arm in data centers will increase.
As costs of operating cloud machines increase, designing highly custom SoCs for specific applications makes sense and CPU cores based on the Arm architecture can be customized to meet requirements of highly specific applications. Moreover, SoCs are by definition designed with specific requirements in mind.
In fact, even Intel acknowledges that custom chips make a lot of sense for cloud servers, which is why it’s willing to produce both Arm- and x86-based SoCs for IFS customers as part of the IDM 2.0 strategy.
But neither Intel nor AMD is giving up half of the cloud server market without a fight. AMD is set to release its 128-core codenamed Bergamo processor based on the Zen 4c microarchitecture optimized for cloud and hyperscalers. Intel, on the other hand, is building a host of special-purpose accelerators into its 60-core Sapphire Rapids CPU to address specific needs of both enterprise and hyperscale customers.
However, not everyone needs Arm-based servers. Enterprises that use tens of thousands of servers are unlikely to adopt Arm because they run applications developed for x86 and the benefits of Arm for them are not obvious. Therefore, Brazier believes that cloud servers will be the main market that Arm-based SoCs will initially address. Apparently, he believes that Arm’s advantages on this market are so significant that the architecture will be used by 50% of cloud server SoCs.
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