Market Trends of Co-packaged Optics Industry
Growth in High-performance Computing
- High-performance computing (HPC) uses parallel processing to run advanced application programs efficiently, reliably, and quickly. Newer workloads, such as genomic sequencing, machine learning, deep learning, speech and facial recognition, and pattern recognition, are being executed on HPC systems.
- The market has also been witnessing mergers and acquisitions by the major players to expand their offerings, further driving the co-packaged optics market. For instance, in June 2021, Hewlett Packard Enterprise announced that it had acquired Determined AI, a San Francisco-based start-up delivering a robust software stack to train AI models faster, at any scale, using its open-source machine learning platform. HPE will combine Determined AI's software solution with its AI and high-performance computing offerings to enable ML engineers to quickly implement and train machine learning models, primarily to provide faster and more accurate insights from their data in various industries.
- Also, in motorsports, vehicle designers have constantly been looking for the tiniest sliver of time to shave off through the usage of advanced engineering. Still, these advancements are getting more and more difficult to achieve. As of June 2021, D2H Advanced Technologies, an engineering firm with efforts in sports such as NASCAR, started working with Ohio Supercomputer Center to use supercomputing to supercharge its design work. Much of the work will be related to computational fluid dynamics, studying how air flows through and around multiple components of a motorsport vehicle.
- Additionally, in June 2021, Azure announced the general availability of its Azure ND A100 v4 Cloud GPU instances powered by NVIDIA A100 Tensor Core GPUs that help achieve leadership-class supercomputing scalability in a public cloud. The company also states that for demanding customers, who have been chasing the next frontier of AI and high-performance computing, scalability is very crucial to unlocking improved total cost of solution and time-to-solution, and the ND A100 v4 is primarily designed to let the most demanding customers scale up and scale out without slowing down.
- Multiple large banks have been leveraging AI on HPC systems in new approaches, rapidly processing more extensive data sets to recognize and prevent fraudulent transactions, further driving the studied market. The connections are optimized to ensure the clusters work quickly and in sync. For instance, in May 2021, ICICI Bank announced that it is adopting Artificial Intelligence and Machine Learning on a larger scale. In 2020, these technologies have reduced internal costs for the bank and helped significantly drive its deposit and lending growth, the bank's management stated during an earnings call with analysts. According to its financial results, the bank also reported a net profit of INR 4,402 crore in the fourth quarter of FY21, around 260.5% higher than in the previous year.
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Asia Pacific is Expected to Hold Significant Market Share
- Operators in the data center industry are using various strategies to partake in India's digital expansion. The most prominent case is the rise in land acquisitions made by data center operators who sought out prime real estate to offer scalable alternatives for their clients, which resulted in a valuation of prices at various locations.
- For instance, in August 2022, Amazon Data Services Pvt Ltd leased 5.5 acres of freehold industrial land from L&T in Mumbai's Powai neighborhood for 21 years and six months. According to Propstack, records about the property indicate that Amazon intends to build a data center there. The monthly rent is Rs 3.57 crore. Amazon's city-center data center will be a crucial component in the economy of a global metropolis as firms are rapidly congregating in urban areas. It is also significant that Amazon opted to be in the center of a Mumbai suburban business sector when most data centers prefer to be situated on the outskirts of any city.
- In May 2022, The Ministry of Electronics and Information Technology (MeitY) will soon come out with a New Data Center Policy draft. As part of the policy framework, the Ministry is considering reducing the number of clearances needed for setting up a data center. Accordingly, plans are on to discuss the matter with central ministries and State governments for possible alignment on this subject. Data centers need about 40 clearances, which takes a lot of time.
- In March 2022, Energy producer ZR Power Holdings announced its plans to invest over INR 1,700 crore to develop a large data center at Mahape in Navi Mumbai in an upward revision of the investment agreed upon by the Maharashtra government last year. In December 2021, the Telangana-headquartered company signed an MoU with the Maharashtra government to spend over INR 1,200 crore for setting up two data centers, one each in Navi Mumbai and Pune.
- Further, the relocations and addition of several servers o meet the growing customer demand bolstered the market growth rate. For instance, in March 2022, NSE stated that it continually installed additional servers due to the increased trading volume, which takes up much room. The National Stock Exchange (NSE) has announced that it will build a dedicated data center outside of Mumbai and relocate the data and co-location servers to that facility. As part of this plan, the biggest stock exchange in the nation will also relocate its primary data center away from its current location.
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