Huawei Firmly Ranks Top 3 in the Global Ethernet Switch Market in Q2
According to IDC, the worldwide Ethernet switch market grew revenues 38.4% year-over-year in the second quarter of 2023 (2Q23) to $11.8 billion. The total worldwide enterprise and service provider (SP) router market recorded $4.6 billion in revenue in 2Q23, a 9.4% year-over-year increase.
Huawei's Ethernet switch revenue increased 17.7% in 2Q23, giving the company a market share of 9.0%. The company's combined SP and enterprise router revenue rose 10.8%, giving the company a market share of 33.3% in the quarter.
The Ethernet switch market's growth of 38.4% in 2Q23 builds on annualized growth of 31.6% in 1Q23. Through the first half of 2023, the Ethernet switch market is up 35.2% compared to the first half of 2022. A major driver of growth in the market continues to be the easing of supply chain issues that began during the global pandemic. With improved component availability, vendors are increasingly able to recognize revenues from fulfilling backlogged product orders. This trend is particularly relevant in the non-datacenter segment of the Ethernet switching market, where revenues grew 52.5% year over year in 2Q23, while port shipments rose 16.6%. Revenues in the datacenter portion of the market rose 21.7% year over year in 2Q23, while port shipments declined 2.4%.
Meanwhile, the higher-speed segments of the Ethernet switch market continue to see strong growth in the data center segment, driven by hyperscalers and cloud providers building data center network capacity. Market revenues for 200/400 GbE switches rose 61.9% year over year and 100GbE revenues increased 18.5% in 2Q23. Revenues for the 25/50 GbE segment increased 54.2% year over year. ODM (original device manufacturer) Direct sales continue to be an important part of the datacenter segment, rising 12.2% compared to 2Q22 to make up 12.6% of the datacenter segment's revenues.
Lower-speed switches, which are typically deployed in enterprise campus and branch locations, showed strength too, driven in part by the continued easing of supply chain constraints. Revenues for 1GbE switches rose 53.1% year over year in 2Q23. 10GbE switches rose 18.1% year over year in the quarter. And 2.5/5GbE switch revenue – also known as multi-gigabit Ethernet switches – rose 157.5% year over year in 2Q23.