In the fourth quarter of 2021 (Q4 2021), the global Ethernet switch market expanded 11.8 percent year over year, hitting $8.5 billion in sales, according to a recent study published by IDC. The market generated $30.7 billion in sales for the entire year of 2021, representing a 9.7% year-over-year increase.
Meanwhile, revenue for the global enterprise and service provider router market was $4.6 billion in Q4 2021, up 7.0 percent year over year. The router market generated $15.9 billion in sales in 2021, a 6.5 percent rise over the previous year.
“The Ethernet switch market’s growth in the final quarter of 2021 led to a strong growth rate for the full year, with generally positive results across the globe,” said Petr Jirovsky, research director for IDC Networking Trackers. “Varying factors continue to drive the Ethernet switch market, including adoption of 400 GbE in the data center segment and continued growth of multi-gigabit Ethernet switches in the campus and branch segment of the market.”
In terms of geography, the Ethernet switch market grew in most areas in both the fourth quarter and the entire year of 2021. Ethernet switch market sales in the United States climbed 12.2 percent year over year in Q4 2021 and 7.0 percent for the whole year. Latin America’s market expanded 3.4 percent year over year in the third quarter and 7.7 percent for the whole year. In Q4 2021, the Canadian market rose 7.0 percent, but was down 1.0 percent for the year.
In Q4 2021, the market in Asia/Pacific (excluding Japan and China) climbed 24.9 percent year over year, and is expected to grow 15.0 percent yearly in 2021. The People’s Republic of China (PRC) stock market climbed 21.1 percent in the third quarter and 17.5 percent for the year. The Japanese stock market lost 14.3 percent in the third quarter and 0.8 percent for the year.
Market Challenges in 2022
Ethernet switch market sales in Western Europe increased 14.7 percent year over year in Q4 2021, and 17.7 percent for the whole year. Growth in Central and Eastern Europe was slower, at 3.7 percent in the third quarter and 0.3 percent for the year. The Ethernet switch market in the Middle East and Africa plummeted 9.9 percent in the third quarter and 5.4 percent for the year.
“Organizations of all sizes around the globe are prioritizing connectivity as a critical component of their digital infrastructure strategies, and that’s why we’re seeing solid growth in the Ethernet switch market,” said Brad Casemore, research vice president, Datacenter and Multicloud Networks at IDC. “The Ethernet switch market faces challenges in 2022, most notably from component shortages impacting supply chains, but also from the economic uncertainty associated with geopolitical conflict. These headwinds will be counterbalanced by the continued buildout of high-speed data center network capacity at hyperscalers and other major cloud providers in the quarters ahead.”
Data Center Segments
With growth in both the non data center and data center segments of the Ethernet switch market, overall port shipments climbed 13.0% in Q4 2021 and 16.2% on an annualized basis in 2021. In Q4 2021, revenue from non data center Ethernet switches increased by 12.1 percent year over year, while port sales increased by 14.6 percent. Non data center switching revenues increased 10.5 percent year over year, while port shipments increased 18.5 percent. In Q4 2021, the non data center Ethernet switch segment of the market accounted for 88.3 percent of port shipments and 57.3 percent of total market sales, with the data center segment accounting for the remaining revenues and port shipments. Market sales in the data center segment gained 11.5 percent in the quarter and 8.5 percent year over year, while port shipments increased 1.7 percent in the quarter and 2.0 percent year over year.
Hyperscalers and cloud providers continue to fuel considerable growth in the higher-speed portions of the Ethernet switch market. Between the third and fourth quarters of 2021, market sales for 200/400 GbE switches increased by 40.4 percent, with port shipments growing by 22.9 percent sequentially. In Q4 2021, income from 100GbE jumped 17.2 percent year over year, while port shipments increased 17.3 percent. Just under a quarter of the market’s total sales (24.7%) comes from 100GbE. In Q4 2021, income from 25/50 GbE climbed by 21.8 percent year over year, while port shipments increased by 2.6 percent.
Lower-speed switches, which are a more established segment of the industry, had a mixed bag of outcomes. In Q4 2021, revenue from 1 GbE switches climbed 6.2 percent year over year, while port sales jumped 12.8 percent; 1GbE switches account for a third (33.4 percent) of overall market revenue. 10 GbE revenues fell 5.5 percent in the quarter, accounting for 22.4 percent of overall market revenues, while port shipments increased modestly by 0.9 percent year over year. From 3Q21 to Q4 2021, 2.5/5GbE switch revenues jumped 23.5 percent sequentially, while port shipments increased 21.6 percent.
Vendor Highlights
- Cisco – Ethernet switch sales climbed 7.5 percent year over year in Q4 2021, and 3.4 percent year over year in 2021, giving the vendor a market share of 45.3 percent by the end of the year. In the meantime, Cisco’s combined service provider and enterprise router revenue increased 17.9 percent in the quarter and 12.0 percent year over year. Cisco’s combined SP and enterprise router market share at the end of the year was 34.6 percent.
- Huawei – The company’s Ethernet switch sales climbed 14.4% in Q4 2021 and 8.3 percent for the whole year, giving it a market share of 10.2 percent for 2021. The company’s combined SP and enterprise router sales climbed 0.5 percent year over year, but down 1.2 percent year over year, giving it a market share of 30.5 percent.
- Arista Networks – Ethernet switch sales increased 28.2 percent in the fourth quarter of 2021 and 27.7 percent for the whole year, giving the vendor a 7.6 percent market share in 2021.
- H3C – Ethernet switch sales surged 21.1 percent in Q4 2021 and 17.9 percent for the whole year, giving the vendor a 6.1 percent market share at the end of 2021. H3C’s revenue increased 22.8 percent in the quarter and 33.7 percent year over year in the combined service provider and enterprise routing market, giving the vendor a 2.2 percent market share in 2021.
- HPE – Ethernet switch sales fell 0.6 percent in the quarter but increased 16.7 percent year over year, giving the vendor a 6.1 percent market share in 2021.
