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Ethernet adapter market correction underway in 1Q 2023

According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, a correction for the Ethernet Controller and Adapter market is underway as server vendors and cloud service providers reduce excess inventories as server demand weakens. However, the Smart NIC market is poised for double-digit growth in 2023, with broader adoption in the Cloud and Enterprise markets.

“After achieving record growth in 2022, the Ethernet Controller and Adapter market started the year on a soft note with revenues down 8 percent Y/Y in 1Q 2023,” said Baron Fung, Senior Research Director at Dell’Oro Group. “This was not a surprise given that the market for most server components has been in a correction for several quarters, and server demand had fallen sharply during the quarter. This slowdown could persist for several quarters. However, there are growth opportunities in 2023, with increased Smart NIC adoption and shift towards higher server port speeds to support accelerated computing requirements for AI applications,” added Fung.

Additional highlights from the 1Q 2023 Ethernet Adapter and Smart NIC report include:

  • The Ethernet Controller and Adapter market is forecast for 6 percent revenue growth in 2023.
  • 100 Gbps and higher speed ports could account for nearly half the market in 2023.
  • Smart NIC open vendors such as AMD, Intel, and NVIDIA in a position to capture more than 30 percent of the Smart NIC market in 2023.

Dell Oro

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