how to identify differences between Server and Client component in Next Js 13

Hey guys just learning next js 13 and installed material ui library for pre build component. I have a small doubt using it as NEXT is about server and client components. Lets say I have created a custom theme provider component using material UI. And next js does not allow to use material ui component with server component so I make it client component with (‘use client ‘) and later wrapped all the children component that is on layout.js file with custom theme provider component that I created before. Now my question is if I make any component inside child component that will it be server component or client component?
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