Owing to benefits such as increased bandwidth, high energy efficiency, and port density, Ethernet switch chips are increasingly being used across various industries. The global Ethernet switch chips market is experiencing a surge in its demand lately. There has been a greater demand for this market in comparison to their other traditional alternatives.
The rapid application of Ethernet switch chip technologies across a wide range of industries is driving the growth of the market. Ethernet switch chips are used in several applications such as commercial, self-developed, data centers, telecom and networks, and industrial. Such factors foster remarkable progress in the global Ethernet switch chip market. The market consistently undergoes a series of developments in order to provide better services.
The advancement in technology has led to faster development of ethernet switch chips that can be customized to meet specific requirements. This has enabled companies to deploy ethernet switch chips in various applications such as data centers, telecom and networks, industrial automation, automotive, and consumer electronics.
Considering these factors, it is reasonable to say that the global Ethernet switch chips market is growing at an appreciable compound annual growth rate (CAGR) of 8.21%. It is expected that the market might acquire a size of USD 4.81 billion during the forecast period, that is, 2021-31.
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If stated in lucid language, then ethernet switch chips are integrated circuits used to build the switching and routing components of Ethernet-based networks. They are responsible for forwarding data between network nodes by processing information from incoming frames and forwarding it to the correct destination port on the switch. The chips typically also include features such as link aggregation, virtual LANs (VLANs), quality of service (QoS), and other traffic management capabilities.
The significant increase in the demand for faster communication networks and the proliferation of connected devices are some of the major factors driving the growth of this market. Factors such as the rising adoption of the Internet of Things (IoT) will further contribute to the growth of this market. In addition, rising awareness about cost-effective solutions and growing demand for cloud computing are likely to fuel the demand for Ethernet switch chips in the near future.
However, with increasing competition among vendors in this market, there may be pricing pressure and margin squeeze for vendors, which could hamper the growth of the market. In addition, there is a need for increased awareness among users about the performance benefits of ethernet switch chips in order to ensure faster adoption. In spite of all these restraints, the market is expected to experience a considerable rate of growth with new additions and developments that might take place in the market during the forecast period, that is, 2021-31.
The key players in the global Ethernet switch chips market include Broadcom Inc., Intel Corporation, Marvell Technology Group, Texas Instruments Incorporated, Microsemi Corporation, Aquantia Corp., MoSys Inc., Mellanox Technologies Ltd., Cavium LLC, Credo Semiconductor, STMicroelectronics N.V., and Meridian Semiconductor Corporation. These players operate in the market and adopt a number of strategies to stay in the market and establish themselves at a higher position than their competitors.
Segment Analysis
The 25G-40G Type Remains the Most Lucrative Segment
The global Ethernet switch chip market is segmented by type into 10G, 25G 40G, 100G, and 100G Above segments. The 10G segment accounted for the largest share in 2019 owing to its wide range of applications in enterprise networking and data centers. The 25G-40G segment is expected to experience the highest CAGR during the forecast period due to its higher speed over 10 Gbps connections while consuming less power as compared to other technologies.
The Self-Developed Segment to Remain Dominant During the Study Period
On the basis of application, the market is divided into commercial use and self-developed use. Commercial usage is expected to be popular among consumers due to the increasing demand for advanced communication solutions. The self-developed segment is expected to grow at a higher CAGR due to the growing trend of developing custom solutions and devices with improved capabilities.
Asia Pacific Region is Expected to Render Ample Investment Avenues
The global Ethernet switch chips market is further segmented into five regions – North America, Europe, Asia Pacific, Middle East, Africa, and South America. North America currently dominates the market due to the presence of major market players such as Intel Corporation, Broadcom Inc., Cisco Systems Inc., HPE Networking, and Dell EMC. However, by the end of the forecast period, Asia Pacific is expected to witness the highest growth during the forecast period due to increased investments in this region for the development of advanced communication infrastructure.
Covid-19 Impact and Market Status
The crisis of the novel coronavirus was received by different industries in varying manners. The production process got adversely affected and the flow of raw materials was disturbed. The demand and supply chain was impacted negatively. Due to various regulatory measures imposed by the government, the manufacturers had to bear a number of challenges. The outbreak of the COVID-19 pandemic has had a significant impact on the global Ethernet Switch Chips market. The commercial sector, which is the major end-user of these products, has been adversely affected by the pandemic. The self-developed sector has also been impacted as many organizations have put their development projects on hold due to financial constraints. The regional markets for Ethernet switch chips have also been affected by the pandemic.
North America and Europe, which are the largest markets for these products,
have seen a significant decrease in demand due to the slowdown in economic activity. Asia Pacific and Middle East and Africa have also been impacted as many countries in these regions are under lockdown. South America has been less affected as compared to other regions but is expected to see a decline in demand in the coming months. Despite these setbacks, the market is all geared up to acquire a moderate rate of growth during the forecast period, that is, 2021-31 as the restrictions are gradually being relaxed.
Latest Innovations in the Global Ethernet Switch Chips Market: a Snapshot
• In recent years, the global Ethernet switch chips market has witnessed numerous technological advances and product innovations. For instance, Broadcom Inc. launched its BCM56970 Tomahawk 4 24-port 100/25 GbE switches in August 2019 to provide a high-density solution for data centers.
• Intel recently introduced its 25G Ethernet controllers which offer up to four ports of 25GbE performance with low latency and lower power consumption. In addition, Marvell Technology Group released its Prestera DX family of switches in 2021 which provide up to 12 ports of 25GbE connectivity.
• Furthermore, market players are focusing on mergers and acquisitions (M&A) activities to expand their product portfolio and gain a competitive edge in the global Ethernet switch chips market. For example, in 2020, Microchip Technology acquired Microsemi Corporation Ethernet switch chips to strengthen its presence in the embedded security solutions market for industrial, automotive, aerospace, and defense applications.
Ethernet Switch Chips Market Scope
| Metrics | Details |
| Base Year | 2023 |
| Historic Data | 2018-2022 |
| Forecast Period | 2024-2031 |
| Study Period | 2018-2031 |
| Forecast Unit | Value (USD) |
| Revenue forecast in 2031 | USD 4.81 billion |
| Growth Rate | CAGR of 8.21 % during 2021-2031 |
| Segment Covered | Type, Application, Regions |
| Regions Covered | North America, Europe, Asia Pacific, Middle East and Africa, South America |
| Key Players Profiled | Broadcom Inc., Intel Corporation, Marvell Technology Group, Texas Instruments Incorporated, Microsemi Corporation, Aquantia Corp., MoSys Inc., Mellanox Technologies Ltd., Cavium LLC, Credo Semiconductor, STMicroelectronics N.V., and Meridian Semiconductor Corporation. |
Key Segments of the Ethernet Switch Chips Market
By Type Overview, 2021-2031 (USD Billion)
• 10G
• 25G-40G
• 100G
• 100G Above
By Application Overview, 2021-2031 (USD Billion)
• Commercial
• Self-Developed
By Regional Overview, 2021-2031 (USD Billion)
North America
• U.S
• Canada
Europe
• Germany
• France
• UK
• Rest of Europe
Asia Pacific
• China
• India
• Japan
• Rest of Asia Pacific
South America
• Mexico
• Brazil
• Rest of South America
Middle East and Africa
Frequently Asked Questions (FAQ) :
The global Ethernet Switch Chips market size projected to reach 4.81 billion by 2031.