Arm SoCs to Grab 30% of PC Market by 2026: Analyst

Qualcomm Snapdragon PC
(Image credit: Qualcomm)

Apple's rapid transition to Arm-based system-on-chips has shown the industry how swift such changeover is possible if architected correctly. Analysts from Canalys believe that Arm's architecture advances so fast that Arm-powered SoCs will grab a sizeable 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 the cloud processors will be ARM-based, 30% of PCs will be ARM-based," said Steve Brazier, president, and CEO of market research firm Canalys, at an event, reports DigiTimes (opens in new tab). "It is an extraordinary event and an industry-changing event that simply has not been taken seriously enough.

30% of PCs by 2026

Arm already controls a sizeable chunk of the PC market. Almost 100% of the PCs that Apple sells are based on the M-series SoCs these days, and in Q3 2022, it controlled 13.5% of the PC market regarding units, according to IDC (opens in 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 loads of inexpensive Chromebooks. While 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 sold-in CPUs and GPUs, which might get sold this quarter or next. Given inventory correction at PC makers and increasing sales of Apple's PCs, it is reasonable that the share of sold-in x86 CPUs dropped in the third quarter. In any case, the share of Arm's processors is growing because of Apple and Chromebooks.

"We note that within the Chromebook market, is appeared that Arm's share looks to have increased in the quarter, though the market was very weak," McCarron told Tom's Hardware.

Arm vs x86 Consumer Market Share Q2 2022

Swipe to scroll horizontally
via Mercury Research
Arm vs x86 Market ShareQQ222Q221Q224Q213Q212Q211Q214Q202Q20
Arm Unit Share13.1%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 leading PC suppliers like 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 drive its Snapdragon platforms into always-connected laptops by Lenovo and HP and then come up with something more powerful based on technologies from Nuvia. Yet, Qualcomm could become a significant player, particularly in notebooks.

We can hardly imagine HP, Dell, or Lenovo developing their own Arm-based SoCs for their PCs to differentiate from each other and offer unique competitive advantages. Developing chips are expensive nowadays, and since these companies sell boatloads of PCs featuring completely different configurations, they will need several different SoCs to address all of their markets. Keeping in mind the relatively thin profit margins on the PC market, it is unlikely that these companies will try to make their processors replace those from AMD or Intel. Meanwhile, they may start ordering customized versions of chips from the leading CPU designers. With multi-chiplet designs like Intel's Meteor Lake, it should be pretty easy to add third-party IP to the processor, though we are speculating.

It remains to be seen whether the Arm architecture will indeed capture an additional 15% - 17% of the client PC market in the next four years because Apple gains share (although we do not expect Apple to command one-third of the PC market by 2026) or because the joint effort of Apple, Qualcomm, and MediaTek will play its role. But given that so much work is 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 to be when Qualcomm rolls out its Nuvia-based Snapdragons.

"It will be an incredible shock for Intel and AMD, to suddenly find themselves fighting to protect their business," said Brazier.

50% of Cloud Servers by 2026

Servers are another frontier that the Arm architecture entered reasonably recently thanks to datacenter-grade SoCs from Ampere, AWS, and Huawei. According to Omdia, Arm SoCs controlled around 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 about edge servers, mission/business critical machines, and other niche markets.

In the coming years, we are going to see more Arm server processors from other makers, 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 U.S. export regulations. Therefore, the share of Arm in data centers will increase.

As costs of running cloud machines are increasing, 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 is 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 battle. 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-in loads of special-purpose accelerators into its 60-core Sapphire Rapids CPU to address the specific needs of both enterprise and hyperscale customers.

Not everyone needs Arm-based servers, though. Enterprises that use tens of thousands of servers will unlikely adopt Arm since they run applications developed for x86, and Arm's advantages for them are not obvious. Therefore, Brazier believes cloud servers will be the primary market that Arm-based SoCs will address initially. 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 are going to see more Arm server processors from other makers, such as SiPearl and Chinese cloud giants, assuming that they can develop SoCs which they can produce in volume with decent yields and ship them to China without violating the recent U.S. export regulations. Therefore, the share of Arm in datacenters will increase.

As costs of running cloud machines are increasing, designing highly-custom SoCs for specific applications makes sense and CPU cores based on the Arm architecture can be customized to meet requirements of very 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 is 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 are giving up half of the cloud server market without a battle. 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-in loads of special-purpose accelerators into its 60-core Sapphire Rapids CPU to address specific needs of both enterprise and hyperscale customers.

Not everyone needs Arm-based servers though. Enterprises that use tens of thousands of servers will unlikely adopt Arm since they run applications developed for x86 and Arm's advantages for them are not obvious. Therefore, Brazier believes cloud servers will be the primary market that Arm-based SoCs will address initially. 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.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • setx
    Quite a funny article, completely oblivious to what is actually happening in the world: https://www.semianalysis.com/p/arms-nuclear-option-qualcomm-must
    TLDR: ARM tries to kill Qualcomm/Nuvia, mass exodus to RISC-V, Apple is unaffected for now.

    So, soon it would be only Apple on ARM, and with Apple who cares what is inside?
    Reply
  • ikernelpro4
    Admin said:
    Arm could seize 50% of the cloud server, and 30% of PC markets in four years, says Canalys.

    Arm SoCs to Grab 30% of PC Market by 2026: Analyst : Read more
    No.

    setx said:
    Quite a funny article, completely oblivious to what is actually happening in the world: https://www.semianalysis.com/p/arms-nuclear-option-qualcomm-must
    TLDR: ARM tries to kill Qualcomm/Nuvia, mass exodus to RISC-V, Apple is unaffected for now.

    So, soon it would be only Apple on ARM, and with Apple who cares what is inside?
    Another issue is that most people who hype ARM up right now have either zero idea how ARM works or what the differences between x86_64 and ARM are.
    I love to ask those young folks that question, and they suddenly all stop praising ARM as if it's their deity...

    Really goes to show how you (Apple & the news) can shove literally anything down gullable people's throat...
    Reply
  • Kamen Rider Blade
    This sounds like "The Death of PC Gaming" claims we've been hearing all these years.

    Same with "The Death of x86" claims that we've been hearing since ARM came back to the fore front due to the Smart Device revolution.

    I'll believe it when I see it.
    Reply
  • -Fran-
    I'll have to side with most peeps commenting above: while I'd like to see more ARM and RISC-V offerings all around, I seriously doubt X86 will see a big enough dent to worry Intel (or AMD).

    The very first statement is already a huge caveat: "Apple's rapid transition to Arm-based system-on-chips has shown the industry how swift such changeover is possible if architected correctly". Apple's ecosystem is closed, as everyone knows, so they can effect changes to pretty much the full software stack onesidedly (is this a word? lol). Microsoft can't and I'm willing to say the Windows ecosystem is way bigger than Apple's. Sure, you can always emulate, but there's some strings attached there. Linux is like the only platform where ARM and RISC-V can flourish with no strings attached. Almost everything there is either opensource or you can compile it to whatever ISA flavour you like.

    Overall, this to me reads the same (sadly, again) as "this is the year of Linux". And I say that shedding a tear :(

    Regards.
    Reply
  • Chung Leong
    Developers dislike cross-platform deployment. Who wants to deal with a huge unknown as you're approaching a deadline? Unless higher-core-count (min 16, ideally 32 to 64) ARM laptops become available on the market, I don't see it catching on on the server side.
    Reply