Publication date: 07 Dec 2022
IDC's Worldwide Quarterly Ethernet Switch and Router Trackers Show Continued Growth in Third Quarter of 2022
Worldwide Ethernet Switch Market Increased 23.9% Year Over Year in the Third Quarter of 2022; Router Market increased 5.6%
NEEDHAM, Mass., December 7, 2022 – The worldwide Ethernet switch market grew 23.9% year-over-year in the third quarter of 2022 (3Q22) with revenues of $10.0 billion. The total worldwide enterprise and service provider (SP) router market recorded $4.1 billion in revenue in 3Q22, a 5.6% increase year over year. 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 23.9% builds on growth of 14.6% in the second quarter of 2022; through the first three quarters of 2022, the market is up 17.4% compared to the first three quarters of 2021. The Ethernet switch market showed strength across both the datacenter and non-datacenter segments of the market. Revenues in the non-datacenter/enterprise campus and branch segment grew 25.6% year over year, while port shipments increased 25.3% year over year. Revenues in the datacenter portion of the market rose 21.7% year over year in 3Q22, while port shipments increased 14.7%.
The higher-speed segments of the Ethernet switch market continue to see significant growth, driven by hyperscalers and cloud providers building out network capacity. Market revenues for 200/400 GbE switches grew 25.2% on a sequential basis from the second quarter to the third quarter of 2022, with port shipments increasing 19.0% sequentially. 100GbE revenues increased 19.8% year over year in 3Q22, while port shipments rose 15.1%; 100GbE switch sales account for 23.8% of the market's total revenues. 25/50 GbE revenues increased 29.2% year over year in 3Q22 while port shipments rose 17.3% annually.
Lower-speed switches, which are typically deployed in enterprise campus and branch locations, showed strength too. Revenues for 1GbE switches rose 22.8% year over year in 3Q22, with port shipments increasing 26.9%. 1 GbE switches make up 34.0% of the total market's revenues. 10GbE switches rose 6.3% year over year, while port shipments grew 19.6% year over year. 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 79.1% on an annualized basis, with 36.2% sequential growth from 2Q22 to 3Q22, with port shipments increasing 110.6% annually and 40.2% sequentially.
"Component shortages and supply chain disruptions have not gone away, but they relented enough in the third quarter of 2022 to enable suppliers to better meet rising demand for Ethernet switches in datacenters and enterprise campuses," said Brad Casemore, research vice president, Cloud and Datacenter Networks at IDC. "Network infrastructure vendors have enacted various strategies to mitigate the impact of supply chain disruptions. Customers, too, have adapted by placing orders earlier than they had done before the pandemic. These measures, combined with increased availability of components, are allowing network vendors to deliver more products and recognize corresponding revenues, leading to the robust growth IDC witnessed in the third quarter."
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 24.8% year over year, while in China (PRC), the market increased 17.5% and in Japan the market declined 1.8%. In the United States, the market rose 29.5% year over year, while Canada's market increased 16.7% and the Latin America market was up 46.1%. In Western Europe, the market rose 25.8% annually, while in the Middle East & Africa region the market grew 23.5%. In Central and Eastern Europe, the market declined 5.4%.
Router Market Highlights
Total revenue in the worldwide enterprise and service provider router market rose 5.6% year over year in 3Q22. The service provider segment, which includes both communications SPs and cloud SPs, accounted for 75.3% of the market's total revenues. The service provider segment of the market increased 3.8%. Revenues in the enterprise segment account for the remaining share of the market and rose 11.8% from a year earlier.
From a regional perspective, the combined service provider and enterprise router market grew 16.7% year over year in the U.S. In Canada, the router market was flat at 0.1% annualized growth, while in Latin America the market rose 35.2%. In the Asia/Pacific region, excluding Japan and China, the market declined 7.7% year over year. Japan's market rose 9.3% while the China market was down 4.4% annually. Revenues in Western Europe increased 11.8% year over year, while the Central and Eastern Europe market declined 25.9% annually and the Middle East and Africa region declined 2.8%.
3Q22 Company Highlights
Cisco's Ethernet switch revenues increased 19.9% year over year in 3Q22, giving the company a market share of 43.8%. Cisco's combined service provider and enterprise router revenue grew 5.2% in the quarter, giving the company market share of 37.0%.
Huawei's Ethernet switch revenue increased 28.6% in 3Q22, giving the company market share of 11.1%. The company's combined SP and enterprise router revenue declined 5.1% year over year, resulting in a market share of 24.9%.
Arista Networks saw Ethernet switch revenues increase 66.0% year over year in 3Q22 and up 14.0% from the second to third quarters of 2022, giving the company 9.7% market share in the quarter.
H3C's Ethernet switch revenue increased 7.5% in 3Q22, giving the company a market share of 5.4%. In the combined service provider and enterprise routing market, H3C's revenues declined 1.7% in the quarter, giving the company 2.0% market share for 3Q22.
HPE's Ethernet switch increased 2.4% in the quarter, resulting in market share of 4.8% for 3Q22.
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