Don’t expect a lot of data switch CPO through 2027: Dell’Oro

Feb. 7, 2023
The Ethernet data center switch market is set to skyrocket from 2023 to 2027, according to Dell’Oro Group. However, it’s probably not a good idea to hold your breath as you wait for many of them to leverage co-packaged optics, the market researcher says.

The Ethernet data center switch market is set to skyrocket from 2023 to 2027, according to Dell’Oro Group. However, it’s probably not a good idea to hold your breath as you wait for many of them to leverage co-packaged optics (CPO), the market research firm’s analysts say in the new Ethernet Switch – Data Center 5-Year Forecast Report.

Overall the data center switch market will enjoy a nearly double-digit CAGR between 2022 and 2027 to surpass $100 billion in cumulative spending over the next five years.

“Although we expect to see some near-term slowdown in revenue growth in 2023, we forecast data center switch sales to grow high-single-digit to double-digits for every year of our forecast horizon,” said Sameh Boujelbene, vice president at Dell’Oro Group. “Most of the growth will be propelled by cloud service providers, which are expected to comprise 60% of the data center switch sales by 2027 and to drive significant adoption of 400-Gbps, 800-Gbps, and 1600-Gbps speeds.

“We expect 400 Gbps and higher speeds to comprise nearly 70% of data center switch sales by 2027. The proliferation of artificial intelligence workloads will further accelerate this adoption,” Boujelbene added.

Given these increases in transmission rates, there is some question about whether pluggable modules will be able to keep pace with switch input/output requirements, particularly in terms of thermal and density requirements, Boujelbene said. “However, CPO adoption will depend on several factors including 1) whether CPO can bring significant cost and power savings compared to pluggables; 2) customers’ roadmaps and interests. Our current forecast for CPO doesn’t show significant volume adoption within our forecast period,” she stated.

Pushing this question is the fact that 800-Gbps ports are expected to eclipse 400 Gbps by 2025. The availability of 800-Gbps optics and 25.6-Tbps chips has sparked the adoption of 800 Gbps switch ports, first at Google. Dell’Oro expects other cloud service providers to follow suit.

Dell’Oro’s Ethernet Switch – Data Center 5-Year Forecast Report provides an overview of market trends and includes tables covering manufacturers’ revenue, port shipments, and average selling price forecasts for various technologies: modular and fixed by port speed; fixed managed and unmanaged by port speed; SONiC by customer segments; and CPO by port speed. Dell’Oro forecasts the following port speeds: 1/10/25/40/50/100/200/400/800/1600 Gbps, and SerDes speed.

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About the Author

Stephen Hardy | Editorial Director and Associate Publisher, Lightwave

Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.

Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.

He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.

You can connect with Stephen on LinkedIn as well as Twitter.

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