Industry News
Hyperscalers and Component Supply Release Drive Significant Growth in SP Router Market
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Author : JIUZHOU
Update time : 2023-06-16 10:45:52
According to a recently published report, in the first quarter of 2023, the global service provider (SP) router and switch market saw exceptionally strong growth, driven by hyperscalers and component supply releases. Eventually, equipment suppliers were able to fulfill orders and digest the backlog.
A senior analyst said: "We were surprised that revenue soared, growing 15% year-over-year. In the past 12 years, the SP router market has only grown at this rate three times. For more than two years, component supply has constrained suppliers. The ability to fulfill orders, the order backlog is at a record level.
As far as the short-term outlook is concerned, we may see strong growth in the next quarter, but don't expect it to continue because customers need time to digest inventory, and most of the Market deployments are coming from telecom service providers, who have been updating their networks at a steady pace."
The senior analyst also said: “We have recently seen particularly strong demand from hyperscale operators in North America, deploying routers to interconnect dispersed facilities, to connect to the telco service provider WAN, and to connect within the data center.
Within the data center, we are seeing a significant increase in high-speed network connections, such as 200 Gbps and 400 Gbps Ethernet switch deployments, which in turn has a cascading effect on the network core. Top router manufacturers benefit from this trend, it is worth noting Yes, Cisco's market share gained two percentage points in the quarter, climbing to its highest level since the first quarter of 2019."
Other Highlights from the Service Provider Routers and Switches Report Q1 2023:
In the first quarter of 2023, all regions except EMEA (Europe, Middle East and Africa) will achieve double-digit market growth. North America led the market with considerable growth, followed by CALA (Caribbean and Latin America) and Asia Pacific.
A senior analyst said: "We were surprised that revenue soared, growing 15% year-over-year. In the past 12 years, the SP router market has only grown at this rate three times. For more than two years, component supply has constrained suppliers. The ability to fulfill orders, the order backlog is at a record level.
As far as the short-term outlook is concerned, we may see strong growth in the next quarter, but don't expect it to continue because customers need time to digest inventory, and most of the Market deployments are coming from telecom service providers, who have been updating their networks at a steady pace."
The senior analyst also said: “We have recently seen particularly strong demand from hyperscale operators in North America, deploying routers to interconnect dispersed facilities, to connect to the telco service provider WAN, and to connect within the data center.
Within the data center, we are seeing a significant increase in high-speed network connections, such as 200 Gbps and 400 Gbps Ethernet switch deployments, which in turn has a cascading effect on the network core. Top router manufacturers benefit from this trend, it is worth noting Yes, Cisco's market share gained two percentage points in the quarter, climbing to its highest level since the first quarter of 2019."
Other Highlights from the Service Provider Routers and Switches Report Q1 2023:
In the first quarter of 2023, all regions except EMEA (Europe, Middle East and Africa) will achieve double-digit market growth. North America led the market with considerable growth, followed by CALA (Caribbean and Latin America) and Asia Pacific.
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