Ethernet adapter and smart NIC market to exceed $16 billion by 2028

According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, networks, and data center industries, we project the Ethernet Adapter and Smart NIC market to exceed $16 billion by 2028. We raised our market outlook significantly because of strong requirements for back-end Ethernet server connectivity to support the scale out of AI server clusters.

“The advent of generative AI applications is driving the demand to interconnect accelerated servers with a back-end Ethernet network necessary for the training of large language models. This is a new market opportunity for Ethernet adapters, with significantly higher growth compared to the traditional front-end Ethernet adapter market”, said Baron Fung, Senior Research Director at Dell’Oro Group. “While the back-end network market today is predominantly InfiniBand-based today, Ethernet-based solutions are forecast for broad adoption as customers seek a multi-vendor solution,” added Fung.

Additional highlights from the Ethernet Adapter and Smart NIC 5-Year July 2024 Forecast Report:

• The total Ethernet Adapter and Smart NIC market, which includes server connectivity for both front-end and back-end networks, is projected to grow at a 27 percent compound annual growth rate by 2028.
• Server access speed for back-end networks will be at least one generation ahead compared to that of front-end networks to maintain pace with compressed GPU accelerator roadmaps.
• Smart NICs, which include DPUs and IPUs, are positioned for high growth to support the strong demands of back-end Ethernet-based networks.

Dell’Oro