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Home » Ethernet Switch, Router Trackers Show Strong Market Growth in Q2 2023

Ethernet Switch, Router Trackers Show Strong Market Growth in Q2 2023

Peter Oluka by Peter Oluka
September 13, 2023
in Telecoms
0
Ethernet Switch
Ethernet Switch

Ethernet Switch

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The worldwide Ethernet switch market grew revenues 38.4% year-over-year in the second quarter of 2023 (2Q23) to $11.8 billion.

The total worldwide enterprise and service provider (SP) router market recorded $4.6 billion in revenue in 2Q23, a 9.4% year-over-year increase.

These results were published today in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.

Ethernet Switch Market Highlights

The Ethernet switch market’s growth of 38.4% in 2Q23 builds on annualized growth of 31.6% in 1Q23. Through the first half of 2023, the Ethernet switch market is up 35.2% compared to the first half of 2022. A major driver of growth in the market continues to be the easing of supply chain issues that began during the global pandemic.

With improved component availability, vendors are increasingly able to recognize revenues from fulfilling backlogged product orders.

This trend is particularly relevant in the non-datacenter segment of the Ethernet switching market, where revenues grew 52.5% year over year in 2Q23, while port shipments rose 16.6%. Revenues in the datacenter portion of the market rose 21.7% year over year in 2Q23, while port shipments declined 2.4%.

Meanwhile, the higher-speed segments of the Ethernet switch market continue to see strong growth in the datacenter segment, driven by hyperscalers and cloud providers building datacenter network capacity.

Market revenues for 200/400 GbE switches rose 61.9% year over year and 100GbE revenues increased 18.5% in 2Q23. Revenues for the 25/50 GbE segment increased 54.2% year over year. ODM (original device manufacturer) Direct sales continue to be an important part of the datacenter segment, rising 12.2% compared to 2Q22 to make up 12.6% of the datacenter segment’s revenues.

Lower-speed switches, which are typically deployed in enterprise campus and branch locations, showed strength too, driven in part by the continued easing of supply chain constraints.

Revenues for 1GbE switches rose 53.1% year over year in 2Q23. 10GbE switches rose 18.1% year over year in the quarter. And 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 157.5% year over year in 2Q23.

From a geographic perspective, the Ethernet switch market saw growth in most regions of the world. In the Americas, quarterly market revenues rose 54.3% on an annualized basis with growth of 51.8% in the United States and 88.3% in Latin America.

In Europe, the market rose 49.1% year over year with growth of 60.8% in Central and Eastern Europe and 44.0% in Western Europe. In the Middle East and Africa region, revenues grew 62.4% year over year.

In the Asia/Pacific region, markets grew 7.7%, with the People’s Republic of China market falling 7.8% year over year and Japan’s market growing 18.9%.

“The Ethernet switch market’s continued growth momentum is indicative of enterprises, hyperscalers, and services providers worldwide continuing to efficiently invest in higher-speed and feature-rich platforms to support new applications such as Generative AI workloads,” said Vijay Bhagavath, research vice president, Cloud and Datacenter Networks at IDC. “Meanwhile, the component shortage issues continue to ease, allowing vendors across the Ethernet switching market to recognize revenues from backlogged orders and book new orders. The Ethernet switching market will continue to be dynamic in the quarters and years to come as supply chains normalize and high-performance network capacity continues to be built out.”

Router Market Highlights

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The service provider segment, which includes both communications SPs and cloud SPs, accounted for 77.5% of the market’s total revenues in 2Q23. Revenues in the service provider segment increased 14.8% year over year while revenues in the enterprise segment declined 6.1% in the quarter.

From a regional perspective, the combined service provider and enterprise router market in the Americas rose 10.3%, while in the Asia/Pacific region the market rose 3.0% year over year. In the Europe, Middle East & Africa (EMEA) region, the market was up 18.3% year over year in 2Q23.

Vendor Highlights

Cisco‘s Ethernet switch revenues increased 55.3% year over year in 2Q23, giving the company a market share of 47.2%. Cisco’s combined service provider and enterprise router revenue grew 18.1% in the quarter, giving the company a market share of 35.9% in 2Q23.

Arista Networks saw Ethernet switch revenues increase 42.6% year over year in 2Q23, giving the company 10.4% market share.

Huawei’s Ethernet switch revenue increased 17.7% in 2Q23, giving the company a market share of 9.0%. The company’s combined SP and enterprise router revenue rose 10.8%, giving the company a market share of 33.3% in the quarter.

HPE‘s Ethernet switch revenue increased 78.8% in 2Q23, resulting in a market share of 7.1%.

H3C’s Ethernet switch revenue declined 10.9% year over year 2Q23, giving the company a market share of 4.1%. In the combined service provider and enterprise routing market, H3C’s revenues decreased 10.0% in 2Q23, resulting in a market share of 2.0%.

Juniper’s Ethernet switch revenue grew 35.2% year over year in 2Q23, resulting in a market share of 2.9%. Juniper’s routing revenue increased 2.5% year over year in 2Q23, giving the company a market share of 10.3% this quarter.

Ethernet Switch market
Source: IDC

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  • Peter Oluka
    Peter Oluka

    Peter Oluka (@peterolukai), editor of Techeconomy, is a multi-award winner practicing Journalist. Peter’s media practice cuts across Media Relations | Marketing| Advertising, other Communications interests. Contact: peter.oluka@techeconomy.ng

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Peter Oluka

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Peter Oluka (@peterolukai), editor of Techeconomy, is a multi-award winner practicing Journalist. Peter’s media practice cuts across Media Relations | Marketing| Advertising, other Communications interests. Contact: peter.oluka@techeconomy.ng

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