The worldwide Ethernet switch market has generated $10.8 billion in revenue in Q3 2024, marking a 7.9 percent year-over-year (YoY) decline despite a 6.6 percent sequential growth from Q2 2024.
The enterprise and service provider (SP) router market fell 17.4 percent YoY to $3.1 billion, according to the latest IDC Quarterly Ethernet Switch Tracker and Router Tracker.
Ethernet Switch Market Overview
The Ethernet switch market displayed contrasting trends between its datacenter (DC) and non-datacenter (non-DC) segments:
Datacenter Segment: Revenues surged 18.0 percent YoY and 6.2 percent sequentially. High-speed switches (200/400 GbE) drove growth, with revenues soaring 126.3 percent YoY and 23.8 percent sequentially. ODM Direct sales rose 56.5 percent YoY, accounting for 19.4 percent of DC segment revenues.
Non-Datacenter Segment: Revenues declined 24.7 percent YoY but grew 7.0 percent sequentially. The annual decline reflects a high baseline from 2023 due to backlogged orders being fulfilled. The 1 GbE switch market fell 25.6 percent YoY but increased 11.5 percent sequentially.
Regional Trends:
United States: Total revenues fell 6.5 percent YoY but rose 13.0 percent sequentially. DC revenues grew 23.2 percent YoY, while non-DC revenues dropped 29.3 percent.
Western Europe: Declined 11.9 percent YoY but grew 8.1 percent sequentially.
China: Flat YoY, with a 4.7 percent sequential decline.
Asia-Pacific (excluding Japan & China): Declined 8.7 percent YoY, rising 4.7 percent sequentially.
“Datacenter growth is fueled by high-bandwidth AI workloads, while non-datacenter Ethernet switch vendors are embedding AI capabilities into management platforms to improve operations, aligning with evolving supply-demand dynamics,” Brandon Butler, Senior Research Manager at IDC, said in the report.
Router Market Performance
The combined service provider and enterprise router market showed a sharp 17.4 percent YoY decline but had varied results between segments:
Service Provider Routers: Comprising 70.8 percent of the market, revenues dropped 22.3 percent YoY and 6.3 percent sequentially.
Enterprise Routers: Revenues fell 2.4 percent YoY but grew 1.2 percent sequentially.
Regional Highlights:
Americas: Declined 24.8 percent YoY.
Asia-Pacific: Declined 14.1 percent YoY.
EMEA: Declined 9.3 percent YoY.
Vendor Performance
Cisco: Ethernet switch revenues dropped 24.0 percent YoY but rose 13.7 percent sequentially, capturing 37.2 percent market share. Router revenues declined 29.7 percent YoY.
Arista Networks: DC-focused Ethernet switch revenues grew 18.0 percent YoY and 7.0 percent sequentially, achieving 13.6 percent market share.
Huawei: Ethernet switch revenues fell 6.6 percent YoY (9.7 percent market share). Router revenues dropped 13.4 percent YoY, holding 27.0 percent market share.
HPE: Primarily non-DC, Ethernet switch revenues fell 36.4 percent YoY, with a 5.3 percent market share.
H3C: Ethernet switch revenues declined 7.1 percent YoY (4.1 percent market share). Router revenues fell 8.7 percent YoY, with a 2.4 percent market share.
Outlook
The Ethernet switch market remains a vital technology segment as enterprises and service providers adopt higher-speed switches for AI and cloud computing. The non-datacenter segment shows signs of stabilization, with vendors increasingly integrating AI-driven features into their solutions. However, both markets face challenges amid fluctuating global demand and evolving technology needs.
