WW Ethernet Switch Revenue Increased 12.7% Y/Y in 1Q22 at $7.6 Billion

The WW Ethernet switch market grew 12.7% Y/Y in with revenues of $7.6 billion.

The total WW enterprise and service provider (SP) router market recorded $3.6 billion in revenue in 1Q22, a 3.5% increase Y/Y.

These growth rates are according to results published in the International Data Corporation‘s Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.

Ethernet Switch Market Highlights
IDC’s WW Ethernet switch tracker segments the market by 2 major categories: datacenter switching and non-datacenter switching. Non-datacenter switching includes Ethernet switch deployments in the enterprise campus and branch.

Revenue in this segment makes up 53.7% of the total market and grew 6.4% Y/Y in 1Q22, while port shipments increased 4.7% year over year. Revenue for the datacenter portion of the Ethernet switch market makes up the balance of the total market. Revenue in the datacenter segment rose 20.8% on an annual basis in 1Q22, while port shipments increased 3.7%.

The higher-speed segments of the Ethernet switch market continue to see significant growth, driven by hyperscalers and cloud providers. Market revenue for 200/400GbE switches grew 35.6% from 4Q21 to 1Q22, with port shipments increasing 78.6% on a sequential basis. 100GbE revenue increased 22.4% Y/Y in 1Q22, while port shipments rose 26.1% Y/Y. 100GbE switch sales account for 26.7% of the market’s total revenue. 25/50GbE revenues increased 38.0% compared to 1FQ21 while port shipments declined 5.1%.

Lower-speed switches, a more mature part of the market, saw moderate growth. 1GbE switches make up 31.4% of the total market’s revenue and revenue in this speed rose 1.2% Y/Y in 1Q22 with port shipments increasing 4.3%. 10GbE, which make up 19.5% of the total market’s revenue, declined 5.7% in the quarter, while port shipments grew 5.7% Y/Y. 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – were flat, with 0.5% change from 4Q21 to 1Q22, but port shipments rose 21.5% sequentially.

“Despite persistent and manifold supply-chain challenges – compounded by macroeconomic concerns and geopolitical conflicts and uncertainty – the WW Ethernet switch market demonstrated notable resilience and robustness in the first quarter of 2022,” said Brad Casemore, research VP, datacenter and multicloud networking, IDC. “Organizations across geographies and industries recognize that the network is the digital nervous system of modern IT infrastructure, and they are investing accordingly. The continued expansion of datacenter switching capacity by hyperscalers and other major cloud providers, as well as a healthy refresh cycle in the enterprise campus and branch, has provided a steady impetus for growth.”

From a geographic perspective, the Ethernet switch market experienced growth in most regions in 1Q22. In USA, revenue rose 17.9% Y/Y. The market in Latin America grew 5.6% annually in the quarter and Canada’s market increased 14.9%. In AsiaPac (excluding Japan and China), the market rose 8.8% Y/Y. In the People’s Republic of China, the market rose 22.8% while in Japan, the market declined 17.9%. In Western Europe, Ethernet switch market revenue grew 11.7% annually while in Central and Eastern Europe, the market grew 9.0%. The market in the Middle East and Africa region rose 2.6% Y/Y. Russia is still the largest market in the Central and Eastern Europe region, making up 23.6% of the region’s revenue – down from 34.9% in full year 2021. The Russia market declined 33.6% Y/Y in 1Q22.

Router Market Highlights
Total revenue in the WW enterprise and service provider router market increased 3.5% Y/Y in 1Q22. The SP segment, which includes both communications SPs and cloud SPs, accounted for 78.4% of revenues and this segment of the market increased 4.5% Y/Y. Revenues in the enterprise segment were essentially flat with a 0.1% increase from a year earlier.

From a regional perspective, the combined SP and enterprise router market in 1Q22 fell 12.7% in the APeJC region. Japan’s market declined 5.4% while the People’s Republic of China market was up 4.6% Y/Y. Revenue in Western Europe increased 6.8% Y/Y, while the Central and Eastern Europe combined enterprise and service provider market declined 16.9% annually and the Middle East & Africa region increased 2.7%. In USA, the enterprise segment decreased 3.0%, while the SP revenue increased 14.7%, giving the combined markets a 10.8% increase on an annualized basis. The Latin American market grew 20.7% on an annualized basis and Canada’s market declined 5.8%.

Vendor Highlights
Cisco’s Ethernet switch revenue increased 3.8% Y/Y in 1Q22, giving the company market share of 45.4%. Meanwhile, Cisco’s combined SP and enterprise router revenue grew 1.3% in the quarter. Cisco’s combined SP and enterprise router market share stood at 36.6% in 1Q22.

Huawei’s Ethernet switch revenue increased 7.2% in 1Q22, giving the company market share of 7.5%. The company’s combined SP and enterprise router revenue increased 6.7% Y/Y, resulting in a market share of 26.2%.

Arista Networks saw Ethernet switch revenue increases 33.5% in 1Q22, giving the company 9.3% market share in the quarter.

H3C’s Ethernet switch revenue increased 25.3% in 1Q22, giving the company market share of 5.6%. In the combined SP and enterprise routing market, H3C’s revenues rose 9.4% in the quarter, giving the company 2.0% market share for 2021.

HPE’s Ethernet switch revenue increased 11.4% in the quarter, resulting in market share of 6.0% in the quarter.