In our latest forecast published in January 2021, revenue for the worldwide Ethernet controller and adapter market is projected to increase at a 3% compound annual growth rate (CAGR) from 2020 to 2025 to $2.7 billion.
This market is characterized by speed transitions. We project during our forecast horizon, the majority of the Cloud and Enterprise server market will upgrade port speeds from 10 Gbps to 25 Gbps, with a growth of 25 Gbps leveling by 2025. Newer technologies, Smart NICs and 100 Gbps Ethernet, and to a lesser extent, 50 Gbps, with CAGR growing strong double-digits by 2025, fueling market growth opportunities.
- As the Tier 1 Cloud service providers refresh their networks, we anticipate an upgrade in server connectivity to 100 Gbps, based on PAM-4 SerDes, for general-purpose workloads. High-end workloads such as high-performance computing, accelerated computing, and all-flash arrays, will also benefit with 100 Gbps connectivity across all customer types.
- Smart NICs, also referred to as data processing units (DPU), are also gaining traction, with numerous product introductions in 2020. Smart NICs are generally equipped with a programmable processor, such as an ARM-based SoC or FPGA; onboard memory and storage; operating system; and high-speed I/O, and offer various offload and security benefits. In 2020, the Top 4 US Cloud SPs comprised the vast majority share of the Smart NIC port shipments. By 2025, however, we expect Smart NICs to expand in customer segments outside of the Top 4 US Cloud, reaching a third of the Smart NIC port shipments. Due to the higher price premium of Smart NICs over that of traditional NICs, we anticipate that the impacts of Smart NICs on market revenue could be significant. We also predict that 100 Gbps will be the connectivity of choice for Smart NICs.
- While the growth of 25 Gbps will continue to moderate and reach maturity during our forecast horizon, 25 Gbps will likely be widely adopted and become the primary revenue contributor. We forecast 25 Gbps to comprise 38% of the cumulative market revenue by 2025.
We believe that these advances in server network connectivity will enable the major Cloud service providers to continue to scale their networks, and drive the adoption of bandwidth-hungry AI applications.
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About the Report:
The Dell’Oro Group Controller and Adapter 5-Year Forecast Report provides complete, in-depth analysis of the market with tables covering manufacturers’ revenue; average selling prices; and unit and port shipments by speed (1 Gbps, 10 Gbps, 25 Gbps, 40 Gbps, 50 Gbps, and 100 Gbps) for Ethernet and Fibre Channel Over Ethernet (FCoE) controllers and adapters. The report also covers Smart NIC and InfiniBand controllers and adapters. To purchase this report, please contact us at firstname.lastname@example.org.