China Data Center Processor Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

China Data Center Processor Market Trends and Insights

Cloud-service hyperscale's’ shift toward AI-centric GPU clusters

Hyperscale providers are rebuilding compute fleets around AI-optimized servers, with AI server shipments forecast to reach 2.07 million units in 2025. Projects such as GB200 clusters demand high-bandwidth memory and advanced packaging, fuelling sustained processor refreshes and liquid-cooling retrofits. Domestic cloud firms accelerate these deployments to train large language models amid foreign-chip constraints. The scale of orders is catalyzing local ASIC vendors and broadening the China data center processor market for specialist accelerators.

“East Data, West Compute” project accelerating regional builds

A USD 6.1 billion state investment, coupled with over CNY 200 billion (USD 27.86 billion) in private capital, is erecting eight computing hubs that will house 1.95 million racks. Western sites leverage cheaper land and renewable energy, handling compute-heavy eastern workloads while meeting mandates for 80% green power by 2025. This policy is stimulating demand for energy-efficient processors and is expected to cut carbon emissions up to 20% by 2030 while adding USD 53 billion in economic value.^{[1]Xinyan Yu, “China’s ‘East Data, West Compute’ plan accelerates data-centre build-out,” South China Morning Post, scmp.com}

Mandatory domestic-content targets for government workloads

The “Made in China 2025” rule specifies 70% local content in public-sector data centers. Feiteng CPUs have already shipped 10 million units through government projects, and TencentOS Server V3 now ships with Kunpeng, Hygon, and Feiteng support. These procurement rules compel systems integrators to standardize on domestic chips, cementing predictable demand even as performance gaps with foreign offerings narrow.^{[2] Ian Cutress, “Feiteng CPUs Hit 10 Million Milestone,” Tom’s Hardware, tomshardware.com}

Rapid liquid-cooling adoption enabling faster refresh cycles

Liquid cooling is now used in 22% of Chinese facilities and is expanding 15% annually, enabling rack densities up to 80 kW quadrupling the capability of conventional air-cooled deployments. The technology shortens processor refresh intervals, underpins AI training clusters, and helps operators meet the PUE ≤ 1.5 requirement for new builds. 

U.S. export controls on advanced process nodes

The December 2024 Bureau of Industry and Security update placed 140 Chinese firms on the Entity List and tightened rules on lithography and high-bandwidth memory. Foundries such as SMIC struggle to access sub-7 nm tools, and U.S. EDA software restrictions add further hurdles. NVIDIA absorbed a USD 4.5 billion reserve for restricted H20 GPU exports, highlighting the scale of lost opportunities. ^{[3]CSIS Strategic Technologies Program, “Updated Semiconductor Export Controls to China,” Center for Strategic and International Studies, csis.org} Yet the squeeze has triggered accelerated R&D at firms like Huawei, whose Ascend 910C now delivers 60% of H100 inference performance.

Shortage of senior chip-architecture talent

China needs 789,000 semiconductor professionals by 2024, yet supply trails by one-third. Wage inflation has doubled entry-level salaries since 2018, while only 40% of graduates gain meaningful internships. The deficiency is most acute in advanced CPU and GPU design, slowing the roll-out of competitive domestic processors despite heavy state investment in training programs. 

Segment Analysis

By Processor Type: AI Accelerators Drive Next-Generation Computing

CPU products retained leadership with 34.2% China data center processor market share in 2024, reflecting their suitability for versatile cloud and enterprise workloads. AI Accelerator/ASIC units, however, are expanding at a 22.3% CAGR as hyperscalers pursue efficiency for model training and inference. GPU deployments continue to rise for both AI and graphics, while FPGA sales meet niche reconfigurable computing demand. 

The migration toward accelerator-rich servers is reshaping procurement: DeepSeek will deploy 32,000 Ascend 910C chips in its next model, and Biren Technology plus Moore Threads are raising fresh capital to position as domestic “NVIDIA alternatives”. This bifurcation is widening the addressable China data center processor market and encouraging cross-licensing among local vendors.

Note: Segment shares of all individual segments available upon report purchase

By Application: AI/ML Training Reshapes Infrastructure Demands

AI/ML Training & Inference consumed 30.7% of the China data center processor market size in 2024, underscoring the sector’s pivot toward intelligence-first services. Advanced Data Analytics leads future growth at 21.7% CAGR, reflecting enterprises’ demand for real-time insights. High-Performance Computing serves academia and national supercomputing centers, while Security & Encryption gains traction amid heightened cyber threats. 

National AI compute capacity is set to reach 1,037 EFLOPS by 2025. Tencent and Alibaba now integrate self-designed ASICs in their stacks, supported by USD 912 billion of public AI research investment. This vibrant startup ecosystem pressures processor vendors to supply cost-effective yet powerful silicon

By Architecture: RISC-V Disrupts Traditional x86 Dominance

x86 still commanded 47.9% share in 2024, buoyed by a mature software base. RISC-V, however, is surging at a 23.1% CAGR as developers exploit the open ISA to tailor chips for cloud and edge workloads. ARM solutions serve mobile-cloud convergence, and POWER architectures endure in selected HPC clusters. Loongson’s 32-core 3D5000, formed from two chiplets and drawing 130-170 W, illustrates how local firms leverage RISC-V for data-center scale. Government-backed RISC-V Innovation Alliance partnerships and new training centers further erode legacy lock-in.

Note: Segment shares of all individual segments available upon report purchase

By Data Center Type: Cloud Providers Lead Infrastructure Transformation

Cloud Service Providers remain the principal buyers of processors, fueling more than half of server demand. The colocation market is growing fastest at 23.5% CAGR as enterprises balance cloud agility with dedicated control. Enterprise-owned facilities persist where data residency or compliance rules dictate isolated hardware. 

State-owned operators China Mobile and China Telecom have invested 239 billion yuan in “East Data, West Compute” hubs, strengthening public-sector leverage over compute capacity. The shift supports domestic chip suppliers through bulk orders tied to procurement mandates.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Eastern metros such as Beijing, Shanghai, and Guangzhou still host the densest concentration of data centers, but face strict power-quota ceilings and land scarcity. Western provinces—Guizhou, Inner Mongolia, Xinjiang—are now absorbing compute-intensive workloads as renewable energy and cooler climates lower operating costs 

Talent pools remain skewed eastward; Beijing, Shanghai, and Shenzhen aggregate most chip-design engineers, giving local incubators a head start on next-generation CPU and GPU projects. Western facilities thus favor standardized, energy-efficient processors that can be operated remotely while local universities scale semiconductor curricula. 

Environmental rules are diverging: Beijing bans new data centers with PUE above 1.5, whereas western authorities incentivize >80% renewable power. Processor vendors are tailoring line-ups accordingly—offering low-power SKUs for urban cores and high-density accelerators for renewable-rich regions.