Driven by the ramping of 400 Gbps interfaces, North America led the worldwide Service Provider (SP) Router and Aggregation Switch market with double-digit revenue growth, according to a new report from Dell'Oro Group. Despite North America’s performance, the worldwide SP Router and Aggregation Switch market was flat year-over-year (Y/Y) in 2Q 2022, although revenues were in line with average revenues of the last five years.
“In 2Q 2022, we observed continuing strong demand for SP Routers in North America, driven by the ramping adoption of 400 Gbps technologies across Telecom- and Cloud SPs and an ongoing capacity expansions by the SPs,” said Ivaylo Peev, Senior Analyst at Dell’Oro Group. “We see the flat 2Q22 Y/Y global market performance as a positive signal, as market conditions remained difficult in the second quarter. Economic uncertainty, raising inflation, China’s zero-COVID-19 policy, and the war in Ukraine are depressing markets in 2022. Adverse foreign exchange rates and the comparison to a strong 1Q 2021 are adding to the factors negatively impacting the performance of the SP Router and Aggregation Switch market,” added Peev.
- Double-digit market growth in North America and moderate growth in the Caribbean and Latin America (CALA) regions were offset by steeply decreasing revenues in Europe, Middle East and Africa (EMEA) and a market decline in Asia Pacific (APAC) and China.
- Positive growth in the SP Core Router and the Aggregation Switch segments was offset by negative performance in the SP Edge Router segment.
- The Enterprise High-End Router segment grew strongly in 2Q 2022, recording double-digit growth across all regions except APAC. APAC’s total growth was limited due to a decline in China.
- Adverse foreign exchange rates driven by a strengthened US dollar (USD) suppressed market results in large parts of EMEA and APAC regions, as business transactions were negatively impacted by the conversion between local currencies and the USD.
