What Drives China's Server CPU Market Surge? 2024 Industry Overview

Instruction‑Set Distribution

The Chinese server CPU market is currently dominated by two ecosystems: the X86‑based Wintel system, primarily serving servers and PCs, and the ARM‑based AA system, which underpins Android and mobile devices. In the Wintel model, CPU manufacturers produce chips while OS vendors supply the operating system; in the AA model, CPU makers license instruction sets or IP cores to chip or system vendors, and OEMs customize chips and OS distributions.

Market Size

According to estimates, the Chinese server CPU market grew from RMB 100.59 billion in 2018 to RMB 190.05 billion in 2023, representing a compound annual growth rate (CAGR) of 13.6 % over the five‑year period. The market reached RMB 211.10 billion in 2024 and is projected to expand to RMB 362.83 billion by 2028, driven by a projected 14.5 % CAGR.

Key Growth Drivers

Two main factors are fueling this expansion: the rapid development of China’s data‑center sector and the Xinchuang (information‑technology innovation) push that promotes high‑priced domestic CPUs. Government policies, such as the “East‑Data‑West‑Compute” initiative and the establishment of national compute‑hub nodes across eight major regions, are also boosting server procurement and, consequently, CPU demand.

Competitive Landscape

Performance: In benchmark performance, the HaiGuang series (X86) and the Kunpeng series (ARM) hold leading positions.

Ecosystem: HaiGuang and Zhaoxin, both X86‑based, benefit from mature ecosystems. ARM‑based vendors such as FeiTeng and Kunpeng are actively building their own ecosystems. Companies like ShenWei and Loongson, which use self‑developed instruction sets, lack comparable ecosystem advantages.

Instruction‑Set Autonomy: ShenWei and Loongson achieve the highest level of autonomy by using self‑designed instruction sets. ARM‑based vendors (Kunpeng, FeiTeng) rely on licensed instruction sets and therefore have slightly lower autonomy. X86‑based HaiGuang and Zhaoxin depend on IP licensing, resulting in limited independence.

Policy and Pricing Context

In February 2022, the National Development and Reform Commission and other ministries approved the construction of national compute‑hub nodes and ten national data‑center clusters, officially launching the “East‑Data‑West‑Compute” project. This policy accelerates server purchases and raises demand for server CPUs.

Domestic server CPUs are priced nearly twice as high as foreign counterparts, and short‑term price reductions are unlikely. The Xinchuang push toward domestic CPU adoption is expected to sustain market growth despite the price premium.

Visual Data