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Dell’Oro reports that the adoption of 400 Gbps products will promote the continuous growth of the global SP router market


According to the latest report of Dell’Oro Group, a market research company, the service provider (SP) router and switch market will continue to expand until 2027, and the market will grow at a compound annual growth rate of 2% between 2022 and 2027. Dell’Oro Group predicts that the cumulative revenue of the global SP router and switch market will be close to 77 billion dollars by 2027. The widespread adoption of products based on 400 Gbps technology will continue to be a key driver of growth. Telecom operators and cloud service providers will continue to invest in network upgrading to adapt to the increasing traffic level and benefit from the economic efficiency of 400 Gbps technology.

“Compared with the previous forecast, our growth forecast remains basically unchanged,” said Ivaylo Peev, senior analyst at Dell’Oro Group. “Because economists predict the possibility of economic recession in Europe and North America is very high, we expect that in the first few years of the forecast period, the market uncertainty will continue to exist and the macroeconomic situation will deteriorate. However, we expect that the global SP router and switch market will stabilize in the second half of the forecast period, because we believe that the fundamentals of the SP router market will remain healthy.”

Other key contents of the five-year forecast report of the router and switch market of the service provider in January 2023 include:

·The router that supports 400 Gbps based on the latest generation of high-capacity ASIC has the advantages of faster speed per port and lower energy consumption, thus reducing the total number of ports required, thus reducing the size of the chassis. The higher speed per port also reduces the cost per bit per port. The reduction of energy consumption, combined with the smaller and more space-saving router shape, will enable the SP to make more cost-effective investment and reduce operating costs through the transition to the 400 Gbps port.

·In the SP core router segment, Dell’Oro Group expects that the market revenue will grow at a compound annual growth rate of 4% between 2022-2027, and the growth will be mainly driven by the adoption of 400 Gbps technology.

·The total revenue of the joint segment of SP edge routers and SP aggregation switches is expected to grow at a compound annual growth rate of 1%, and will be close to $12 billion by 2027. The main growth force of this segment is still the expansion of mobile backhaul network to support the adoption of 5G RAN, followed by the increase of residential broadband deployment.

·Dell’Oro Group expects that China’s IP mobile backhaul market will decline because SP will transfer its investment to the core network and metropolitan area network, so Dell’Oro Group expects that the demand for SP core router products will increase.

Post time: Feb-16-2023