Ethernet switch market sees $10.8B in 3Q24

The worldwide Ethernet switch market recorded $10.8 billion in revenue in the third quarter of 2024 (3Q24), a 7.9% year-over-year (YoY) decline. Despite the annual drop, the market grew 6.6% from the second to the third quarters of 2024. The total worldwide enterprise and service provider (SP) router market declined 17.4% y/y to $3.1B in 3Q24. These findings are detailed in the latest editions of the International Data Corporation (IDC) Quarterly Ethernet Switch Tracker and IDC Quarterly Router Tracker.

Ethernet Switch Market Highlights
The Ethernet switch market showed varying trends across the datacenter and non-datacenter segments. Revenues in the datacenter (DC) portion of the market rose 18.0% YoY and rose 6.2% sequentially from 2Q24 to 3Q24. Total market revenues for 200/400 GbE switches rose 126.3% YoY in 3Q24 and rose 23.8% from the second to the third quarter of 2024, indicating strong interest in the highest-speed Ethernet switches. ODM (original device manufacturer) Direct sales continue to be a growing part of the datacenter segment, rising 56.5% YoY, and comprising 19.4% of the datacenter portion of the Ethernet switch revenues.

The non-datacenter (non-DC) segment, primarily used in enterprise campus and branch deployments, declined 24.7% YoY, However, this segment rose 7.0% from the second to the third quarters of 2024. The annualized decline was attributed to challenging comparisons with the quarter from a year earlier, which had historically high revenues driven by product backlog drawdown. 1GbE switch revenue declined 25.6% on an annualized basis but rose 11.5% sequentially.

From a geographic perspective, in the United States, the total Ethernet switch market declined 6.5% YoY but rose 13.0% sequentially. In the US, the datacenter market increased 23.2% YoY while the non-datacenter segment fell 29.3% annually. In Western Europe, the market fell 11.9% YoY but rose 8.1% from 2Q24 to 3Q24. In Central & Eastern Europe the market declined 17.8% annually but rose 9.0% sequentially. In the Asia Pacific region, excluding Japan & China, the market declined 8.7% YoY but rose 4.7% sequentially, while in the People’s Republic of China, the market was flat annually with a 4.7% sequential decline

“Ethernet switching is a critically important technology for enterprises, service providers and cloud giants, as connectively demands continue to rise in the cloud and AI era,” says Brandon Butler, Senior Research Manager, Enterprise Networks, IDC. “While datacenter growth is fueled by high-bandwidth and low-latency AI workloads, the requirements are driving enterprises and service providers to deploy ever-faster Ethernet switch speeds. In the non-datacenter segment, Ethernet switch vendors are embedding AI capabilities into software management platforms to improve operations and performance, aligning with the market’s transition to more balanced supply-demand dynamics.” IDC