IDC: Ethernet Switch Market Up 10.8% Y/Y, Router Market Down Slightly in Q2/21

The worldwide ethernet switch market recorded revenues of $7.4 billion in the second quarter of 2021 (2Q21), an increase of 10.8% year-over-year. Meanwhile, worldwide enterprise and service provider (SP) router market revenues declined 0.5% year-over-year in Q2/21 to $3.9 billion. These results are from the International Data Corporation (IDCWorldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.

Ethernet Switch Market Highlights

The Ethernet switch market’s annualized growth of 10.8% builds upon the 7.6% growth in the first quarter of 2021. For the first half of the year, Ethernet switch revenues are up 9.3% over 2020. Compared to the second quarter of 2019 – before the COVID-19 pandemic – revenues increased 3.8%.

From a geographic perspective, the 2Q21 Ethernet switch market had strong results across most parts the world. In Asia/Pacific, the People’s Republic of China revenues grew 11.6% year-over-year while Japan’s market increased 8.3%. More broadly in the Asia/Pacific region, excluding China and Japan, the market rose 20.5% year-over-year in the quarter, buoyed by the market in Singapore growing 58.2% annually. In Europe, results were mixed: Western Europe’s market rose 23.1% year over year with strength from France, which grew 39.3%. Central and Eastern Europe’s market was essentially flat at 0.5% growth with Russia declining 4.8%. In the Middle East & Africa, the market increased 2.6% year-over-year. Across the Americas, revenues in the United States rose 6.2%, Canada’s market fell 1.0%, and Latin America’s market increased 8.1% year-over-year with Mexico rising 15.8% compared to a year earlier.

“IDC witnessed a strong start to 2021 for the global Ethernet switch market, as macroeconomic conditions improved and a growing number of organizations worldwide demonstrated perseverance and digital resilience in the face of the rolling challenges presented by the COVID-19 pandemic,” Brad Casemore, research vice president at IDC, said. “Enterprises made notable investments in their campus networks, while hyperscalers and other providers of cloud services continue to drive growth in high-bandwidth datacenter switching.”

Overall, port shipments increased 28.4%, driven by strength in the non-datacenter portion of the Ethernet switch market. Non-datacenter Ethernet switch revenues grew 17.7% in Q2/21 with port shipments increasing 36.1%. The non-datacenter ethernet switch portion of the market makes up 88.6% of port shipments and 58.5% of total market revenues with the balance of revenues and port shipments in the datacenter portion of the market. In the datacenter segment, revenues rose 2.4% year-over-year, while port shipments declined 10.6%.

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 132.5% from the first quarter to the second quarter of 2021, with port shipments more than tripling (+206.0%) on a sequential basis. 100GbE revenues increased 15.4% on an annualized basis, while port shipments rose 11.4% year-over-year. 25/50 GbE revenues increased 25.6% year-over-year while port shipments rose 1.3%.

Lower-speed switches, a more mature part of the market, saw mixed results. 10GbE port shipments rose 3.1% year-over-year, but revenue declined 8.4%. 10Gb switches make up 23.4% of the market’s total revenue. 1GbE switches increased 33.2% annually in port shipments and 14.4% in revenue. 1GbE accounts for 35.9% of the total Ethernet switch market’s revenue. 2.5/5GbE revenue increased 25.3% sequentially from 1Q21 to 2Q21, while port shipments rose 26.6% quarter over quarter.

Router Market Highlights

The worldwide enterprise and service provider router market declined 0.5% year-over-year in Q2/20 with the major service provider segment, which accounts for 76.7% of revenues, falling 0.8% and the enterprise segment increasing 0.4%. From a regional perspective, the combined service provider and enterprise router market increased 15.7% in Asia/Pacific (excluding Japan and China). Japan’s market increased 4.9% while the People’s Republic of China market was down 14.4% year-over-year. Revenues in Western Europe grew 3.3% year-over-year, while in Central and Eastern Europe the combined enterprise and service provider market was flat. The Middle East & Africa region grew 4.3%. In the U.S., the enterprise segment was down 4.8%, while service provider revenues increased 7.8%, giving the combined markets a 4.6% increase on an annualized basis. The Latin America market grew 1.0% on an annualized basis and Canada’s market increased 2.2% year-over-year.

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