Ethernet switch market increased 31.5% YoY in Q1

The worldwide Ethernet switch market grew revenues 31.5% year over year in the first quarter of 2023 (1Q23) to $10 billion. The total worldwide enterprise and service provider (SP) router market recorded $4.1 billion in revenue in 1Q23, a 14.1% annual 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 growth of 31.5% in 1Q23 builds on annualized growth of 3.3% in 4Q22 and 19.4% for the full year 2022. In 1Q23, 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 38.7% year over year, while port shipments rose 14.1%. Revenues in the datacenter portion of the market rose 23.2% year over year in 1Q23, while port shipments increased 19.7%.

The higher-speed segments of the Ethernet switch market continue to see strong growth, driven by hyperscalers and cloud providers building out datacenter network capacity. Market revenues for 200/400 GbE switches rose 141.3% annually in 1Q23 and were up 14.3% sequentially from 4Q22 to 1Q23. 100GbE revenues increased 18.2% year over year in 1Q23. 25/50 GbE revenues increased 21.1% in 1Q23.

Lower-speed switches, which are typically deployed in enterprise campus and branch locations, showed strength too. Revenues for 1GbE switches rose 43.7% year over year in 1Q23. 10GbE switches rose 9.7% year over year in the quarter. 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 128.0% year over year in 1Q23.

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 31.8% year over year, but in the People’s Republic of China, the market fell 5.0%. In the United States, the market rose 40.3% while Canada’s market increased 39.1% year over year. The Latin America market rose 65.3% in the quarter. In Western Europe, the market rose 36.1% annually while in Central and Eastern Europe the market increased 16.4%. The Middle East & Africa region saw market growth of 40.4% in the quarter.

“The Ethernet switch market continued to show strong growth rates in the first quarter of 2023, driven by a variety of factors,” noted Brandon Butler, research manager, Enterprise Networks at IDC. “One significant factor is the continued easing of component shortages, which is allowing vendors to recognize revenues from fulfilling backlogged product orders. Meanwhile, connectivity remains another important market driver as enterprise, service providers, and hyperscalers continue to deploy ever-faster Ethernet switching capacity to meet the demands of a digital-first world.” IDC