LightTrends Newsletter

LightCounting updates forecast for Ethernet switch market

Despite a slower than expected growth in revenues of the leading Cloud companies, AI infrastructure remains a priority. This new focus will sustain the market for high bandwidth and low latency Ethernet and InfiniBand switches in the next 5 years. We also expect deployments of optical circuit switches in AI clusters will expand beyond Google’s datacenters.

Our latest forecast for sales of Ethernet switching ASICs is presented in the figure below. The forecast includes chips sold in the global merchant market as well as chips used by Cisco in their own equipment (captive market). The forecast for 2023 has not changed since our October 2022 edition, but our lower forecast for 2024-2028 reflects a bit more conservative long-term strategies of the Cloud companies. Increasing deployments of InfiniBand and optical switches will also limit growth in sales of Ethernet switches.

We estimate that sales of InfiniBand switch ASICs will almost double from 2022 to 2028, reaching close to $700 million. We also expect that InfiniBand will lead in adoption of higher bandwidth switches. Sales of 51.2T InfiniBand switches will account for close to 70% of this market segment by 2028.

This report also includes our estimates for deployments of optical circuit switches at Google’s datacenters and offers a forecast for this emerging market.

The report and accompanying spreadsheet with forecast details are available for download by LightCounting clients.