High-Frequency Trading Server Market: ARM-Based Processor Segment Is Anticipated To Register The Fastest CAGR

 High-frequency Trading Server Industry Overview

The global high-frequency trading server market size is expected to reach USD 501.0 million by 2028, registering a CAGR of 3.5% from 2020 to 2028, according to a study conducted by Grand View Research, Inc. In the trading industry, servers play a pivotal role in reducing tick-to-trade delays; this is driving the product demand. Furthermore, with improvements in server technology over the years, high-frequency trading (HFT) servers, in particular, have witnessed several advancements in terms of processor technology, which is creating opportunities for industry growth. These advancements are fueled by the need to track stock markets where every nanosecond counts and are expected to become an indispensable element of the finance sector over the coming years.

 

Increased adoption of algorithmic trading in global financial markets has encouraged companies in the financial sector to opt for high-speed transactions. Technological advancements, such as integrating AI and social media feeds with electronic trading, are expected to drive the demand for high-speed trading transactions. Thus, the demand for low-latency trading servers has increased tremendously among the derivatives, quantitative, and proprietary trading firms. Asia Pacific has become one of the new revenue pockets for market growth.

Favorable government regulations for the implementation of automated trading and new investment law in China have emerged as potential revenue streams for the vendors. Furthermore, the surge in adoption of Artificial Intelligence (AI) and machine learning technology by small-sized hedge fund firms, is anticipated to drive the overall product demand over the forecast period. A competitive edge is now determined by nanoseconds and microseconds. Speed is important to market participants, such as large investment banks, hedge funds, and other financial companies, because it impacts profitability, and hence the deployment of HFT servers is of paramount importance.


High-frequency Trading Server Market Segmentation

Grand View Research has segmented the global high-frequency trading server market on the basis of processor, form factor, application, and region:

Based on the Processor Insights, the market is segmented into X-86-based, ARM-based, and Non-x86-based (MIPS, Imagination).

  • The x-86 segment accounted for the largest revenue share of over 80% in 2020. The segment growth can be attributed to the large-scale adoption of x-86 core processors and industry dependency on software code based on the x-86 architecture. 

 

  • The ARM-based processor segment is anticipated to register the fastest CAGR over the forecast period. The segment growth can be attributed to the increased adoption of cloud-based migration tools that help vendors port server applications on ARM architecture. 

 

Based on the Form Factor Insights, the market is segmented into 1U, 2U, 4U, and Others (3U, 5U, 6U, 7U).

  • The 2U segment accounted for the highest revenue share of over 42% in 2020 and will expand further at the fastest CAGR from 2021 to 2028 2U form factor allows SMEs to scale up IT infrastructure at a lower cost. The 2U form factor also offers greater flexibility in singular chassis, which enables high-speed transaction on several computer systems.
  • The 4U servers segment is anticipated to register the second-highest CAGR over the forecast period. This growth can be attributed to the increased adoption of virtualized data centers. In addition, considering their technical specification, 4U servers provide improved scalability with up to eight full-height and full-length PCI Express slots.

 

Based on the Application Insights, the market is segmented into Equity Trading, Forex Markets, Commodity Markets, and Others (Bonds and Other Derivatives).

  • The equity trading segment accounted for the largest market share of over 41% in 2020. The segment growth can be attributed to the high penetration of HFT trading platforms, particularly in large-cap equity markets. Based on application, the market has been categorized into equity trading, foreign exchange, commodity markets, and others.

 

  • Foreign Exchange (FOREX) market is anticipated to emerge as the fastest-growing segment from 2021 to 2028. The success of equity trading has influenced the adoption of HFT in forex markets, creating avenues for growth. Traders in these markets aim to improve their profitability by deploying low-latency servers in stock exchanges to execute trading. 

 

High-frequency Trading Server Regional Outlook

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa (MEA)

 

Key Companies Profile & Market Share Insights

The market is highly consolidated with a limited number of players possessing strong distribution networks worldwide. Market participants focus on a combination of organic and inorganic growth approaches to sustain competition. For instance, in 2020, Cisco Systems, Inc. acquired Exablaze, an Australian manufacturer of advanced network devices. The acquisition helped Exablaze to strengthen its product portfolio in next-generation technologies, such as HFT.

The companies are also focused on innovation to keep pace with constantly evolving technology and stay ahead of the competition. For instance, in 2019, International Computer Concepts (ICC) launched Vega R-119i, an overclocked financial server that helped financial companies achieve low latency for high-frequency trading and other financial service applications. Some prominent players in the global High-Frequency Trading (HFT) server market include:

  • ASA Computers, Inc.
  • Blackcore Technologies
  • Hypertec
  • Dell
  • HP enterprise Development LP
  • Hypershark Technologies
  • Lenovo
  • Penguin Computing
  • Super Micro Computer, Inc.
  • Tyrone Systems
  • XENON Systems Pty Ltd.

 

Order a free sample PDF of the High-frequency Trading Server Market Intelligence Study, published by Grand View Research.

 

About Grand View Research

Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.

 

Contact:

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Grand View Research, Inc.

Phone: 1-415-349-0058

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