Ethernet Switch Market Booms, Router Market Faces Decline in 3Q23: IDC

The latest findings from the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker reveal intriguing trends in the networking industry for the third quarter of 2023 (3Q23).
Top Ethernet Switch suppliers in Q3 2023 IDC report

Ethernet Switch Market Growth

15.8 percent Surge: The Ethernet switch market experienced a robust 15.8 percent year-over-year revenue growth, reaching $11.7 billion in 3Q23.

Supply Chain Recovery: Improved component availability eased supply chain challenges stemming from the global pandemic, enabling vendors to fulfill backlogged orders and drive revenue growth.

Segment Dynamics: Non-datacenter (non-DC) segment revenues soared by 22.2 percent in 3Q23 and escalated by 36.5 percent year-to-date. In contrast, datacenter (DC) market revenues climbed by 7.2 percent year-over-year in the same quarter and are up 16.8 percent year-to-date.

Key Observations in the Ethernet Switch Market:

High-Speed Adoption: Hyperscalers and cloud providers fueled adoption of higher-speed Ethernet switches, particularly witnessing a 44.0 percent surge in revenues for 200/400 GbE switches in the DC segment.

Continued Growth: Revenues for 100GbE switches increased by 6.0 percent year-over-year, while 25/50 GbE revenues surged by 26.3 percent.

Geographical Trends: Markets across various regions experienced growth, notably the United States (26.7 percent), Canada (28.6 percent), and Latin America (25.9 percent).

Vijay Bhagavath, IDC Research VP for Cloud and Datacenter Networks, emphasized the significance of Ethernet switching amidst evolving trends, stating, “Ethernet switching remains a critically important technology for efficiently and effectively connecting networks across the globe.”

Router Market Challenges

Declining Figures: The enterprise and service provider router market faced a year-over-year decline of 9.4 percent in revenue, totaling $3.7 billion in 3Q23.

Regional Variances: The Americas experienced a 7.3 percent decline, while the Asia/Pacific region fell by 11.1 percent year-over-year.

Vendor Performance Highlights:

Cisco: Witnessed a 20.1 percent rise in Ethernet switch revenues and a 3.6 percent decline in combined router revenue.

Arista Networks: Showed a substantial 27.3 percent surge in Ethernet switch revenues, dominating 91.1 percent of the DC segment.

Huawei: Recorded a 1.0 percent increase in Ethernet switch revenue and a 6.5 percent decline in combined router revenue.

HPE: Notable growth of 88.4 percent in Ethernet switch revenue, primarily in the non-DC segment, securing a market share of 7.7 percent.

H3C: Experienced declines in both Ethernet switch and router revenues in 3Q23.

The findings underscore the Ethernet switch market’s resilience amid supply chain improvements while signaling a challenging landscape for router market players during the same period.

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