The global Ethernet switch market surged 32.3 percent to $11.7 billion in revenue in Q1-2025, according to IDC’s latest tracker.
This growth in Ethernet switch market reflects heightened enterprise and hyperscaler spending as the demand for infrastructure tailored to artificial intelligence (AI) accelerates. Complementing this trend, the enterprise and service provider (SP) router market also posted solid performance, growing 5.9 percent to $3.4 billion.
Customer Spending Trends
Customer investments are clearly shifting toward high-performance datacenter infrastructure, driven by the exponential growth of AI workloads. Spending in the datacenter (DC) segment of the Ethernet switch market climbed a striking 54.7 percent. Enterprises and hyperscalers are prioritizing low-latency, high-bandwidth networks — evidenced by the 189.7 percent rise in revenue from 200/400 GbE switches.
Meanwhile, the enterprise segment showed stable recovery, with non-datacenter switch revenue increasing 9.6 percent. Demand for 1GbE switches, which dominate the campus and branch networking space, rose 7.2 percent, suggesting a renewed enterprise focus on foundational infrastructure upgrades.
Innovation Trends
Vendors are innovating aggressively to meet evolving enterprise and hyperscaler requirements. The introduction of 800 GbE switches — tracked for the first time in Q1-2025 — generated $350.8 million in revenue, accounting for 5.1 percent of the Ethernet switch market. This milestone underscores the market’s readiness for next-generation, AI-optimized networking infrastructure.
AI-driven network management features are also playing a key role in enterprise network modernization. Advanced AI capabilities in switches are attracting enterprise buyers seeking improved performance, energy efficiency, and automated operations in increasingly complex environments.
Vendor Strategy
Vendors are responding to this high-growth environment with targeted strategies. Original device manufacturer (ODM) Direct sales continued to surge — up 67.5 percent in Q4-2024 — capturing 20.6 percent of DC segment revenues. This points to a growing preference among hyperscalers and cloud service providers for custom, scalable solutions tailored to their unique infrastructure needs.
Geographically, North America remains the epicenter of growth, with U.S. DC switch revenue up 66.0 percent and non-DC switches up 17.4 percent. Vendors in this region are capitalizing on massive cloud and AI infrastructure rollouts. EMEA and Asia Pacific also showed growth of 19.5 percent and 22.7 percent, respectively, signaling global momentum.
As AI reshapes enterprise IT and cloud infrastructure, both traditional and ODM vendors are aligning their product roadmaps to capture growing demand across datacenter and campus environments. With innovation in Ethernet technologies and customer spending tilting toward high-speed, AI-ready solutions, the industry is poised for continued growth through 2025 and beyond.
Switch vendors
In Q1 2025, Cisco maintained its leadership in the global Ethernet switch market with revenues rising 4.7 percent to $3.6 billion, securing a 30.9 percent market share. The company saw strong performance in the non-datacenter (non-DC) segment, which accounts for 65.7 percent of its switch revenue, growing 9.3 percent. However, Cisco’s datacenter (DC) switch revenue declined 3.2 percent.
Arista Networks recorded Ethernet switch revenues of $1.6 billion, up 27.1 percent. With 90.9 percent of its switch business rooted in the datacenter segment, Arista captured 13.9 percent of the total Ethernet switch market and 21.5 percent of the DC segment.
NVIDIA has emerged as a major force in the Ethernet switch market, driven entirely by datacenter deployments. Its revenue skyrocketed 760.3 percent to $1.46 billion, and increased 183.7 percent sequentially from Q4 2024. This surge, powered by its Spectrum X Ethernet platform, gave NVIDIA a 12.4 percent share of the total market and 21.2 percent share of the DC segment.
Huawei posted a 15.4 percent growth in Ethernet switch revenue to $704 million, translating to a 6.0 percent market share.
HPE Aruba Networking, with 84.5 percent of its switch business concentrated in the non-DC segment, experienced a slight revenue decline of 0.5 percent. The vendor held 5.0 percent market share in the Ethernet switch market for the quarter.
The router market grew in the first quarter of 2025, with the service provider segment — covering both communications and cloud service providers — accounting for 75.7 percent of the total and rising 5.8 percent year over year. The enterprise segment, representing the remainder, increased by 6.0 percent year over year. Regionally, the Americas led with an 8.1 percent annual growth, followed by Asia Pacific at 6.2 percent, and EMEA at 2.6 percent.
In the first quarter of 2025, Cisco’s total router revenue declined 2.5 percent, resulting in a market share of 31.9 percent. Huawei’s router revenue increased 12 percent during the same period, giving the company a market share of 28.4 percent.
Rajani Baburajan
