Industry News
The phenomenon of the decline of the global data center switch market in 1Q24
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Author : JIUZHOU
Update time : 2024-06-13 14:15:22
1Q24 global Ethernet data center switch spending has declined in the past three years. Although artificial intelligence drives the development of Ethernet data center switches. But it is not enough to offset the decline in network spending for connecting general servers.
According to a recent report released by a market research company:
In the first quarter of 2024 (1Q24), global Ethernet data center switch spending declined.
This is the first decline since the fourth quarter of 2020.
Although Ethernet data center switches have made progress in artificial intelligence back-end networks for connecting accelerated servers.
However, this growth is not sufficient to make up for the decrease in overall spending on connecting servers.
The market research firm's vice president said:
"Companies sold fewer Ethernet data center switches in the first quarter. This was because of backlog clearing, inventory reduction, and spending cuts."
"While certain service providers outperformed others, it's contingent upon their position in the processing cycle."
"This decline was widespread in both cloud service provider (SP) and enterprise market segments."
"Overall spending on front-end networks was weak, but spending on AI back-end networks continued to grow exponentially."
"While Ethernet managed to secure a growing portion of AI infrastructure expenditure."
"However, this expansion was unable to compensate for the decrease in front-end networks."
Other highlights of the "2024 Q1 Ethernet Switch-Data Center Report":
Almost all major brand vendors saw a general decline.
Driven by the recovery of spending by several large cloud service providers, white box vendors also saw revenue growth.
In the first quarter of 2024, shipments of 200Gbps, 400Gbps and 800Gbps switches accounted for nearly 25% of total port shipments. This was the only segment that saw growth this quarter.
As some AI workloads begin to favor Ethernet. Companies are expected to accelerate the adoption of 400Gbps and 800Gbps in 2024 and 2025.
According to a recent report released by a market research company:
In the first quarter of 2024 (1Q24), global Ethernet data center switch spending declined.
This is the first decline since the fourth quarter of 2020.
Although Ethernet data center switches have made progress in artificial intelligence back-end networks for connecting accelerated servers.
However, this growth is not sufficient to make up for the decrease in overall spending on connecting servers.
The market research firm's vice president said:
"Companies sold fewer Ethernet data center switches in the first quarter. This was because of backlog clearing, inventory reduction, and spending cuts."
"While certain service providers outperformed others, it's contingent upon their position in the processing cycle."
"This decline was widespread in both cloud service provider (SP) and enterprise market segments."
"Overall spending on front-end networks was weak, but spending on AI back-end networks continued to grow exponentially."
"While Ethernet managed to secure a growing portion of AI infrastructure expenditure."
"However, this expansion was unable to compensate for the decrease in front-end networks."
Other highlights of the "2024 Q1 Ethernet Switch-Data Center Report":
Almost all major brand vendors saw a general decline.
Driven by the recovery of spending by several large cloud service providers, white box vendors also saw revenue growth.
In the first quarter of 2024, shipments of 200Gbps, 400Gbps and 800Gbps switches accounted for nearly 25% of total port shipments. This was the only segment that saw growth this quarter.
As some AI workloads begin to favor Ethernet. Companies are expected to accelerate the adoption of 400Gbps and 800Gbps in 2024 and 2025.
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