08 Sep 2022
IDC's Worldwide Quarterly Ethernet Switch and Router Trackers Show Growth Momentum Continuing in Second Quarter of 2022
Worldwide Ethernet Switch Market Increased 14.6% Year Over Year in the Second Quarter of 2022; Router Market Increased 6.3%
NEEDHAM, Mass., September 8, 2022 – The worldwide Ethernet switch market grew 14.6% year over year in the second quarter of 2022 (2Q22) with revenues of $8.5 billion. The total worldwide enterprise and service provider (SP) router market recorded $4.2 billion in revenue in 2Q22, a 6.3% year-over-year increase. These growth rates are according to results published in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.
Ethernet Switch Market Highlights
The Ethernet switch market's annualized growth of 14.6% builds on momentum from the first quarter of 2022, when the market increased 12.7% year over year; for the first half of 2022, the market is up 13.7% compared to the first half of 2021. Revenues in the non-datacenter segment of the Ethernet switch market – which includes Ethernet switch deployments in the enterprise campus and branch – grew 5.8% year over year, while port shipments decreased 0.4% year over year. Revenues in the datacenter segment rose 26.9% year over year in 2Q22, while port shipments increased 11.7%.
The higher-speed segments of the Ethernet switch market continue to see significant growth, driven by hyperscalers and cloud providers. Market revenues for 200/400 GbE switches grew 67.4% on a sequential basis from the first to the second quarters of 2022, with port shipments increasing 89.5%. 100GbE revenues increased 28.3% year over year in 2Q22, while port shipments rose 23.4% year over year; 100GbE switch sales account for 26.2% of the market's total revenues. 25/50 GbE revenues increased 22.1% year over year in 2Q22 while port shipments rose 5.4% annually.
Lower-speed switches, which are a more mature part of the market, saw moderate growth. Revenues in the 1GbE segment of the market rose 2.6% year over year in 2Q22, with port shipments increasing 1.6%. 10GbE switches declined 1.3% in the quarter, while port shipments grew 2.1% year over year. 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 41.2% on an annualized basis, with 6.0% sequential growth from 1Q22 to 2Q22, with port shipments increasing 58.7% annually, but rising 0.8% sequentially.
"The Ethernet switch market maintained its strong growth in the second quarter of 2022, driven by a variety of factors. In the datacenter, hyperscalers and other cloud service providers are adding switches to keep pace with robust demand from customers for popular applications and services. In the campus, growth is sustained by enterprises pursuing digital transformation and resiliency. What's impressive is that this growth is occurring in the face of headwinds occasioned by supply-chain disruptions, rising inflation, and a the ongoing war in Ukraine," said Brad Casemore, research vice president, Cloud and Datacenter Networks at IDC. "The resilience of the Ethernet switch market's growth rates in recent quarters shows the importance of connectivity and digital infrastructure in today's digital-first business world."
From a geographic perspective, the Ethernet switch market saw growth in most regions of the world. In the Asia/Pacific region, excluding Japan and China, the market grew 14.0% year over year, while in the People's Republic of China, the market increased 9.3% and in Japan the market fell 6.4%. In the United States, the market rose 23.3% year over year, while Canada's market increased 10.4% and the Latin America market was up 18.8%. In Western Europe the market rose 14.8% annually, while in the Middle East & Africa region the market grew 1.7%. In Central and Eastern Europe, the market declined 12.5%, with Russia's market down 89.2% from a year earlier.
Router Market Highlights
The service provider segment, which includes both communications SPs and cloud SPs, accounted for 73.8% of the total router market revenues, and this segment of the market increased 2.2%. Revenues in the enterprise segment account for the remaining share of the market and rose 20.2% from a year earlier.
From a regional perspective, the combined service provider and enterprise router market in 2Q22 rose 3.4% in the Asia/Pacific region, excluding Japan & China. Japan's market declined 6.9% while the People's Republic of China market was down 1.8% annually. Revenues in Western Europe increased 4.2% year over year, while the Central and Eastern Europe market declined 25.2% annually. The Middle East & Africa region increased 9.3%. In the U.S., the enterprise segment of the market increased 36.6%, while service provider revenues increased 16.8%, giving the combined markets a 21.3% increase on an annualized basis. The Latin America market grew 11.0% on an annualized basis and Canada's market declined 1.1%.
Cisco's Ethernet switch revenues increased 10.2% year over year in 2Q22, giving the company market share of 42.3%. Meanwhile, Cisco's combined service provider and enterprise router revenue grew 4.1% in the quarter. Cisco's combined SP and enterprise router market share stood at 33.2% in 2Q22.
Huawei's Ethernet switch revenue increased 9.4% in 2Q22, giving the company market share of 10.6%. The company's combined SP and enterprise router revenue increased 5.3% year over year, resulting in a market share of 32.8%.
Arista Networks saw Ethernet switch revenues increase 55.1% in 2Q22, giving the company 10.1% market share in the quarter.
H3C's Ethernet switch revenue increased 4.8% in 2Q22, giving the company market share of 6.3%. In the combined service provider and enterprise routing market, H3C's revenues rose 5.6% in the quarter, giving the company 2.5% market share for 2Q21.
HPE's Ethernet switch revenue declined 5.5% in the quarter, resulting in market share of 5.5% in the quarter.
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