Linley Group: Data-center transition drives 10GbE demand

OCTOBER 27, 2008 -- Stating that the transition to 10GbE is still in its early stages, the firm believes that 10GbE switch shipments are ramping and should reach more than 1 million ports in 2008.

OCTOBER 27, 2008 -- Data-center and aggregation switches will be the primary applications driving growth for 10-Gigabit Ethernet (10GbE) through 2009, according to The Linley Group's (search for Linley Group) latest report, "A Guide to Ethernet Switch and PHY Chips, Fifth Edition." Stating that the transition to 10GbE is still in its early stages, the firm believes that 10GbE switch shipments are ramping and should reach more than 1 million ports in 2008. The firm also believes that the Gigabit Ethernet (GbE) market has already consolidated around a handful of major vendors, with startup activity shifting to 10GbE.

"The next major technology transition is underway, as the Ethernet market evolves to support yet another 10X increase in data rates," said Jag Bolaria, report coauthor and senior analyst, The Linley Group. "Ethernet evolution drives incumbent vendors to become more competitive as they must once again vie for leadership, and gives new entrants the opportunity to emerge and gain share. Our guide uniquely provides readers with both the business and technical data they need to identify which companies, technologies, and chips are best for their designs and why."

The new report covers a number of key segments in the networking market, including: GbE, 10GbE switch chips, GbE-over-copper PHYs, 10GbE PHYs for copper and optical media, 10GBase-KR backplane transceivers, and power-over-Ethernet (PoE) controllers.

In addition to 10GbE growth, the firm reports that the infrastructure market for GbE silicon grew 15 percent in 2007. The Linley Group also expects combined GbE/PHY revenue to grow about 12 percent in 2008, with switch-plus-PHY revenue slowing in 2009 and beyond.

As the data center transitions to 10GbE, thousands of servers will require connections, according to The Linley Group. With virtualization rapidly becoming a mainstream technology, server usage and I/O bandwidth requirements will further increase. Moreover, LAN aggregation will be a critical application for 10GbE switches. These trends will drive the need for higher port counts, Layer 3 switching, and security features, according to the report. In 2009, the combination of 10GbE switch chips, optical PHYs, and 10GBase-T adoption should make 10GbE a meaningful portion of overall Ethernet switch/PHY revenue.

Although Broadcom is the leading supplier of GbE components, The Linley Group believes it has not secured its place as the dominant supplier for 10GbE products. Solarflare and Aquantia offer 10GBase-T PHYs with the lowest power dissipation, while Fujitsu is the first vendor to integrate 10-Gbit/sec SERDES in its 10GbE switch, and AMCC was the first vendor to sample a 10GBase-KR transceiver for the backplane. Competitors looking to challenge Broadcom must move quickly and aggressively to build a leading set of 10GbE components, the analysts assert.

"A Guide to Ethernet Switch and PHY Chips, Fifth Edition" is currently available directly from The Linley Group and is priced at $2,995 for a single-user license.

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