Worldwide Ethernet switch revenues grew 22% year over year in the fourth quarter of 2022 (4Q22) to $10,3-billion and grew 18,7% for the full year 2022 to $36,5-billion.
The total worldwide enterprise and service provider (SP) router market recorded $4,6-billion in revenue in 4Q22, a 0,7% year-over-year increase, according to the the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.
For the full year, router market revenues increased 3,9% to $16,5-billion.
Ethernet market highlights
The Ethernet switch market’s growth of 22% year over year in 4Q22 builds on growth of 23,9% in the third quarter of 2022. Annual growth of 18,7% for the full year builds on the market growing 9,7% in 2021 compared to 2020.
In the fourth quarter, the Ethernet switch market showed strength across both the datacentre and non-datacentre segments of the market.
Revenues in the non-datacentre/enterprise campus and branch segment grew 22,6% year over year in 4Q22, while port shipments rose 18% year over year. For the full year, non-datacentre Ethernet switch revenues rose 15,7% while port shipments grew 12,2%.
Revenues in the datacentre portion of the market rose 21,2% year over year in 4Q22, while port shipments increased 17,3%. For the full year, datacentre Ethernet switch revenues rose 22,6% year over year and port shipments increased 12,2%.
The higher-speed segments of the Ethernet switch market continue to see strong growth, driven by hyperscalers and cloud providers building out datacentre network capacity.
Market revenues for 200/400 GbE switches rose more than 300% for the full year in 2022 but were flat at 0,7% sequential growth from 3Q22 to 4Q22. 100GbE revenues increased 18,7% year over year in 4Q22 and rose 22% for the full year. 25/50 GbE revenues increased 30,1% year over year in 4Q22 and rose 29,8% for the full year.
Lower-speed switches, which are typically deployed in enterprise campus and branch locations, showed strength too. Revenues for 1GbE switches rose 21,4% year over year in 4Q22 and grew 12,6% for the full year. 10GbE switches rose 1.0% year over year in the quarter but were flat at 0,4% for the full year. 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 122,1% year over year in 4Q22, with 53,1% sequential growth from 3Q22 to 4Q22.
“Strong growth in the Ethernet switch market continued in the fourth quarter of 2022, driven by a variety of trends, but the most significant factor was the continued easing of component shortages and a reduction in supply chain disruptions,” says Brad Casemore, research vice-president: cloud and datacentre networks at IDC. “Meanwhile, enterprises, service providers, and hyperscalers continue to build out Ethernet switching capacity, reinforcing the importance of connectivity and network 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 20,8% year over year in 4Q22 and rose 17,5% for the full year. In the People’s Republic of China, the market fell 5% year over year in 4Q22, but rose 9,2% for the full year; in Japan the market fell 6,4% year over year in the quarter and was down 8,6% for the full year.
In the US, the market rose 32,2% year over year in 4Q22 and rose 26,2% for the full year; Canada’s market increased 25,6% year over year in the quarter and rose 17% for the full year. The Latin America market rose 82,7% in the quarter and increased 39,6% for the full year.
In Western Europe, the market rose 25,3% annually in 4Q22 and increased 19,7% for the full year, while in the Middle East & Africa region the market grew 49,9% in the quarter and rose 19,9% on the full year. In Central and Eastern Europe, the market declined 1,7% in the quarter and ended the full year off 2,8% compared to 2021.
Router market highlights
The service provider segment, which includes both communications SPs and cloud SPs, accounted for 73,7% of the market’s total revenues. The service provider segment of the market decreased 4% year over year in 4Q22 and finished the full year up 1,3%.
Revenues in the enterprise segment account for the remaining share of the market and rose 17,1% year over year in the quarter and increased 12,9% for the full year.
From a regional perspective, the combined service provider and enterprise router market in the US rose 18,5% year over year in 4Q22 and was up 17% for the full year. In Canada ,the router market increased 12,3% in the quarter and rose 1,4% for the full year, while in Latin America the market rose 5,2% in 4Q22 and was up 16,7% for the full year.
In the Asia/Pacific region (excluding Japan & China), the market increased 0,7% in the quarter, but fell 3,9% for the full year. Japan’s market was up with 5,6% growth in 4Q22 and a 0,3% increase for the full year. The People’s Republic of China market decreased 18,9% in the quarter and 6,7% for the full year.
Revenues in Western Europe decreased 1% in 4Q22 but rose 5,2% for the full year, while the Central and Eastern Europe market was down 17,1% in the quarter and 21,2% for the full year. The Middle East & Africa region was up 5,2% in the quarter and grew 3,7% for the full year.
Vendor highlights
Cisco’s Ethernet switch revenues increased 18,4% year over year in 4Q22 and rose 13.4% for the full year, giving the company a market share of 43,3% to end 2022. Cisco’s combined service provider and enterprise router revenue grew 10,9% in the fourth quarter and rose 5,5% for the full year, giving the company a market share of 35,1% to end the year.
Huawei’s Ethernet switch revenue increased 28,6% in 4Q22 and rose 20% on the full year, giving the company market share of 10,3% to end 2022. The company’s combined SP and enterprise router revenue declined 15,1% year over year in 4Q22, and was down 3,4% for the full year, giving the company a market share of 28,4% to end the year.
Arista Networks saw Ethernet switch revenues increased 63,6% year over year in 4Q22 and rose 55,4% for the full year, giving the company 9,9% market share to end 2022.
H3C’s Ethernet switch revenue declined 10% year over year 4Q22, but rose 5,1% for the full year, giving the company a market share of 5,4% to end the year. In the combined service provider and enterprise routing market, H3C’s revenues decreased 8,6% in 4Q22, and were flat at 0,4% growth for the year, resulting in market share of 2,2% for 2022.
HPE’s Ethernet switch revenue increased 14% in the quarter and rose 5,3% for the full year, resulting in a market share of 5,4% in 2022.