Market Analysis | Global Ethernet Switch Market Slips 3.5% in 2020

IDC reported that in 2020, the global Ethernet switch market fell 3.5% to $27.8 billion, and the enterprise and service provider router market fell 4.0% to $14.9 billion.

ICC News (Compile: Nina) According to research data from IDC, in the fourth quarter of 2020, the global Ethernet switch market revenue was US$7.5 billion, a year-on-year decline of 1.4%; for the full year of 2020, the switch market revenue was US$27.8 billion. It was down 3.5% from 2019. At the same time, in the fourth quarter of 2020, the global enterprise and service provider router market reached US$4.3 billion, a slight increase of 0.6% year-on-year; for the full year of 2020, the router market revenue reached US$14.9 billion, down 4.0% compared to 2019. — Ethernet Switch Market Highlights From a geographic perspective, Asia Pacific (excluding China and Japan): Down 7.4% in the fourth quarter and down 5.3% for the full year. China: Strong fourth quarter with revenue up 19.1%; full year up 12.3%. Japan: Quarterly performance was also good, with revenue up 23.1% year over year in the fourth quarter and 11.1% for the full year.

Central and Eastern Europe: Down 11.9% in the fourth quarter and 1.9% for the full year. Western Europe: Down 6.0% in the fourth quarter and 8.9% for the full year. Middle East and Africa: Down 9.4% in the fourth quarter and 2.9% for the full year. United States: Down 3.6% in the fourth quarter and 6.6% for the year. Latin America: Down 28.5% in the fourth quarter and 20.4% for the full year. In terms of product segments, high-speed switching platforms continue to drive the growth of the Ethernet switch market. 100Gb switch port shipments increased 28.4% year over year to 7.4 million in the fourth quarter; revenue increased 27.2% year over year to $1.78 billion.

For the whole year, port shipments in this segment increased by 40.0% year-on-year. 25Gb/50Gb switches also saw significant growth, with full-year revenue up 33.5% to $655 million and port shipments up 28.1% year over year. Low-speed switches are a more mature segment of the market, with port shipments and revenue showing mixed results as the segment’s average selling price (ASP) continues to decline. 10Gb switch port shipments increased 20.5% year over year in the fourth quarter, but revenue fell 2.7% year over year. 10Gb switch revenue accounted for 26.2% of the total market revenue. 1Gb switches accounted for 35.4% of the total Ethernet switch market revenue. In 2020, data center Ethernet switches accounted for 14.1% of all port shipments but 43.6% of full-year revenue.

Meanwhile, non-data center switches still accounted for the majority (85.9%) of all port shipments and 56.4% of revenue. Brad Casemore, vice president of data center and multi-cloud networking at IDC, said: “Data center high-speed Ethernet switch ports have proliferated, benefiting from the demand from Hyperscalers, Tier-2 clouds, and some cloud-building large enterprises.

Meanwhile, the more mature non-data center market continued to be challenged by the impact of the COVID-19 pandemic in the fourth quarter of 2020, with some organizations delaying or re-evaluating campus network investments as they adapt to a mixed workforce. “—— Router Market Highlights In the fourth quarter of 2020, the global enterprise and service provider router market performed relatively stable, with a year-on-year increase of 0.6%, of which the service provider segment, which accounted for a large proportion, increased by 2.0%, and the enterprise segment decreased by 3.1%.

For the full year of 2020, the overall market declined by 4.0%, with the service provider segment down 2.9% and the enterprise segment down 7.5%. From a geographic perspective, the performance of global markets was mixed.

In the fourth quarter of 2020, Central and Eastern Europe increased by 10.0%, Western Europe increased by 1.4%, Middle East and Africa increased by 14.4%, Asia Pacific (excluding China and Japan) decreased by 1.2%, China increased by 2.8%, and Japan increased 4.0%, the United States fell 6.8%, and Latin America fell 6.0%. —— Supplier performance Cisco: Fourth-quarter Ethernet switch revenue fell 11.8% year-on-year, and full-year revenue fell 9.5%. In the highly competitive 25GbE/50GbE/100GbE segment, Cisco remained the market leader with a 38.7% share in the fourth quarter.

Enterprise and service provider router revenue declined 13.8% year over year in the fourth quarter, and for the full year, revenue fell 15.1%, bringing its annual share to 32.9%.

Huawei: Ethernet switch revenue fell 1.5% year over year in the fourth quarter, but grew 4.8% for the full year, bringing its annual share to 10.5%. Enterprise and service provider router revenue increased 7.1% in the fourth quarter and 6.0% for the full year for a 32.9% annual share.

Arista: Ethernet switch revenue grew 13.6% in the fourth quarter and fell 9.9% for the year. 100Gb accounted for a whopping 72.9% of the company’s Ethernet switch revenue, reflecting its position in the Hyperscaler data center, cloud provider and large enterprise markets. HPE: Ethernet switch revenue increased 20.7% year over year in Q4 and 1.9% for full-year 2020, with an annual share of 5.8%.

Juniper: Ethernet switch revenue fell 4.1% year over year in the fourth quarter and 3.0% for the full year, with an annual share of 3.0%.

Enterprise and service provider router revenue increased 9.0% year over year in the fourth quarter and edged down 0.7% for the full year, with an annual share of 10.8%.

IDC research director Petr Jirovsky said:

“Geographically, the Ethernet switch and router markets are unevenly represented globally, suggesting that the COVID-19 pandemic continues to have an uneven impact on the global economy.

Looking ahead to 2021, IDC expects demand for high-speed networking equipment to continue driving market growth. “