Driven by unleashed component supply and hyperscale solid demand, the worldwide Service Provider (SP) Router and Switch market surpassed $ 4.1 billion for the first time, according to Dell’Oro’s latest market assessment.
“The second quarter 2023 SP Router Market revenue growth jumped to 16 percent year-over-year, surpassing the exceptional growth of the previous quarter,” said Ivaylo Peev, senior analyst at Dell’Oro Group. “Revenues continued to rise, driven by the vendors’ ability to work through backlogs and fulfill orders, because of the improved component supply. Strong demand for SP routers from hyperscalers in North America contributed to the extraordinary market growth.
A key growth contributor was the core router segment, which rose 26 percent year-over-year, followed by the combined SP Edge Router and Aggregation Switch segment, up 13 percent year-over-year.
Cisco and ZTE gained market share in the overall SP Router market. Huawei gained market share in the combined SP Edge Router and Aggregation Switch segment while losing shares in the SP Core Router segment.
From a regional perspective, Dell’Oro said that the EMEA and China markets emerged, growing double-digit as large regional projects contributed significant revenue growth. Huawei and ZTE saw an increase in EMEA. Specifically, Huawei expanded its business in Western European countries, including Italy, Luxembourg, Portugal, and Spain.
“We were surprised to see EMEA and China achieving double-digit growth after showing relatively weak performance over the past two years. We believe EMEA’s growth was boosted by various new projects in MEA countries, including use cases in Benin, Ethiopia, Morocco, Saudi Arabia, South Africa, UAE, and Turkey. In China, we saw strong investments from the three largest operators, China Mobile, China Unicom, and China Telecom.”
Peev added, "Large-scale deployments made across metro cloud networks, broadband access networks, mobile RAN, and mobile backhaul contributed significantly to the quarter's success.”
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