#United States #Redwood City #Dell'Oro Group #High End Routers #Core Routers

High-End Router Market Surges Towards $15 Billion

Recent research from Dell'Oro Group reveals that the market for high-end routers is gearing up for significant growth, predicted to exceed $15 billion by the year 2030. This remarkable forecast follows a year of market correction in 2024, when an oversupply led to an 18 percent decline in growth due to reduced demand from the networking sector.

The Rebound of Core Routers

The robust recovery is predominantly being led by core router revenue, which is expected to grow at an impressive compounded annual growth rate (CAGR) of 11 percent leading up to 2030. Analysts attribute this uptick in demand to an improving climate in various sectors of the networking industry, most notably within AI data centers. Key customer segments, including communication service providers (CSPs), cloud providers, and enterprise/public organizations, are anticipated to drive this demand surge.

Jimmy Yu, Vice President at Dell'Oro Group, acknowledges the shift in forecasts, stating, “We significantly increased the High-End Router market forecast from the one published just six months ago. An unexpected V-shaped recovery in core routers is mainly responsible for this change.” This resurgence is primarily attributed to a rise in network demand, likely spurred by increasing traffic in data centers, coupled with the gradual transition of enterprises to AI-ready infrastructures.

Market Predictions and Cumulative Revenue

The five-year forecast projects a cumulative revenue of $71 billion from high-end routers. Communication service providers are expected to remain the largest purchasers of high-end routers, accounting for over 70 percent of revenues. However, the fastest growth is predicted to be among cloud providers and enterprise/public organizations as they increasingly upgrade their networking systems.

Significantly, core routers are projected to exhibit the highest CAGR over this forecast period, followed closely by enterprise high-end routers and edge routers, highlighting a shift in technological demands.

Regional Trends in Router Demand

The anticipated increase in router demand extends across all major regions; thus, we can expect a global enhancement in networking capabilities. This is indicative of an overall industry trend where improved interconnectivity is becoming increasingly critical for businesses and service providers alike.

In summary, the high-end router market finds itself at a pivotal point, poised for growth fueled by transformative trends in AI and massive data handling requirements. The shift represents not just a recovery from previous downturns but also an evolution in how networking infrastructures will be designed and implemented in the future. As technology continues to advance, the need for more sophisticated and capable routers will undoubtedly play a crucial role in connecting the world of tomorrow.

About the Report

The Dell'Oro Group's Service Provider Router and Switch 5-Year Forecast Report is among the premier resources for insights into the service provider router and switch markets across historical, current, and projected future periods. Rich with qualitative analysis and thorough statistical data, the report provides a comprehensive overview of market trends, customer types, and use cases, alongside average selling prices and unit shipments. Institutions interested in acquiring this in-depth report may reach out directly to Dell'Oro Group via email at [email protected].

About Dell'Oro Group

Dell'Oro Group is a renowned market research firm that specializes in conducting strategic competitive analysis within the telecommunications, security, enterprise networks, and data center infrastructure industries. Their expertise encompasses both qualitative evaluations and in-depth quantitative data, helping businesses make informed decisions based on factual insights.