Data center component markets projected to grow amid AI expansion

New market research reports indicate significant growth in specialized components for data centers, driven by the rise of artificial intelligence (AI), high-performance computing (HPC), and cloud services.

The global market for AC Rack Power Distribution Units (rPDU) is expected to grow from $2.86 billion in 2025 to $5.123 billion by 2032, representing a compound annual growth rate (CAGR) of 8.7%. The demand is fueled by increasing power density in AI servers, which requires advanced power management, remote monitoring, and high-current capabilities.

Simultaneously, the market for Arrayed Waveguide Grating (AWG) chips used in optical communications is also projected to expand at a CAGR of 8.7%. This segment is expected to grow from $463 million in 2025 to $825 million by 2032. The growth is linked to the need for high-capacity, low-latency optical infrastructure to support the massive data volumes processed by generative AI and the transition toward 800G and 1.6T optical modules.