Worldwide Ethernet switch market increased 22.0% year over year in Q4 2022 and 18.7% for the full year; Router market increased 0.7% in Q4 2022 and 3.9% for the full year

Worldwide Ethernet switch revenues grew 22.0% 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. For the full year, router market revenues increased 3.9% to $16.5 billion. These results were published today in the International Data Corporation (IDC) Worldwide Quarterly Ethernet Switch Tracker and Worldwide Quarterly Router Tracker.

Ethernet Switch Market Highlights

The Ethernet switch market's growth of 22.0% 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 datacenter and non-datacenter segments of the market. Revenues in the non-datacenter/enterprise campus and branch segment grew 22.6% year over year in 4Q22, while port shipments rose 18.0% year over year. For the full year, non-datacenter Ethernet switch revenues rose 15.7% while port shipments grew 12.2%. Revenues in the datacenter portion of the market rose 21.2% year over year in 4Q22, while port shipments increased 17.3%. For the full year, datacenter 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 datacenter 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 22.0% 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," said Brad Casemore, research vice president, Cloud and Datacenter Networks, 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 5.0% 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 United States, 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 17.0% 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 4.0% 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 U.S. rose 18.5% year over year in 4Q22 and was up 17.0% 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 1.0% 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 20.0% 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 10.0% 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 14.0% in the quarter and rose 5.3% for the full year, resulting in a market share of 5.4% in 2022.

A graphic illustrating the worldwide market share of the top 5 Ethernet switch companies over the previous five quarters is available by viewing this press release on IDC.com.

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Worldwide Ethernet switch revenues 18.7% for the full year 2022 to $36.5 billion while the service provider router market grew 3.9% to $16.5 billion, according to IDC.