LightTrends Newsletter

LightCounting updates its Ethernet, InfiniBand, and Optical Switches for Cloud Datacenters report

Data center operators' new focus on AI infrastructure boosted sales of Nvidia’s systems in 2023. We estimate that sales of their InfiniBand switch ASICs grew 2.3x in 2023, compared to 2022. This strong growth will extend into 2024 prior to moderating in 2025-2028, generating a 25% CAGR in 2024-2029.

Sales of Ethernet switch ASICs were essentially flat in 2023 because of lower investments in compute nodes within Cloud Datacenters, but this market will return to growth in 2024 and grow steadily after that. The majority of Cloud companies plan to use open-source Ethernet switches in their production AI infrastructure, instead of proprietary InfiniBand solutions. We estimate that sales of Ethernet switches will grow at a 14% CAGR in 2024-2029.

Google is also accelerating their investments into AI infrastructure, which relies heavily on optical circuit switches (OCSes). Other companies are considering deploying them as well and take advantage of savings in cost and power consumption in OCS-based datacenter networks. We increased our forecast for sales of OCS hardware which is now projected to grow at 28% CAGR in 2024-2029.

From a technology perspective, the next big transition for both Ethernet and InfiniBand switch ASICs is the move to 200Gbps SerDes, which should begin in 2025. Our forecast includes shipment projections for SerDes lanes by speed from 50G to 200G PAM4. We also forecast adoption of co-packaged optics (CPO) including switch densities up to 204T. While massive investments in AI infrastructure are driving overall network-system growth, not all technologies will benefit equally. Our new report explains the dynamics of network switching, driven by our underlying models for hyperscale operators.

The new report is available to subscribers at: https://www.lightcounting.com/login