The worldwide Ethernet switch market grew revenues 38.4% year-over-year in the second quarter of 2023 (2Q23) to $11.8 billion, according to a newly published report from IDC. Meanwhile, 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.
"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."
Some highlights of the IDC Worldwide Quarterly Ethernet Switch and Router Trackers:
Ethernet switching
- With improved component availability, vendors are increasingly able to recognize revenues from fulfilling backlogged product orders, especially 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%.
- 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.
- Revenues for 1GbE switches rose 53.1% year over year in 2Q23. 10GbE switches rose 18.1% year over year in the quarter.
- 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 157.5% year over year in 2Q23.
Routing
- 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.
