#United States #Redwood City #Dell'Oro Group #AI Components #Campus Switches

Surge in Campus Switch Prices Due to AI Demand

In a recently published report by the Dell'Oro Group, a prominent market research firm specializing in telecommunications, security, and networking, it’s revealed that the Campus Ethernet Switch market experienced a notable rebound in 2025. However, this recovery wasn’t sufficient to offset a 19% revenue decline that occurred in 2024. The main catalyst for this market shift is the soaring demand for AI components, which has led to significant price increases in campus switches.

Component Shortages from AI Build-out

As organizations invest heavily in artificial intelligence infrastructure, switches that accommodate these advanced systems are becoming increasingly sought-after. According to Siân Morgan, a Research Director at Dell'Oro Group, vendors are grappling with shortages in campus switch components, driven by the extensive AI rollout. This scarcity is not only impacting availability but is also contributing to rising operational costs. Morgan noted, "We’ve already seen one round of price increases, and more are anticipated." The implications of these changes come at a critical moment when businesses are tasked with updating their older switching equipment to maintain compliance with security standards and to prepare effectively for the widening adoption of AI technologies.

Projected Growth Over the Next Five Years

The forecast for the coming years suggests a robust market growth spurred by consumer demand, combined with increased pricing. Organizations are increasingly recognizing the importance of refreshing their network infrastructure to ensure that they harness the full potential of AI functionalities. This growing urgency creates a unique intersection of demand and rising costs that will likely define the Campus Ethernet Switch market going into 2026 and beyond.

Trends in Demand

The demand landscape is also evolving alongside technological advancements. Highlights from the Dell'Oro report indicate a rising interest in Power over Ethernet (PoE) ports, fueled by heightened power needs of Internet of Things (IoT) devices and Wireless Local Area Network (WLAN) Access Points. Calculations show that spending on modular forms will outpace overall market growth for only the second time in history in 2025. Moreover, the introduction of enhanced feature sets—particularly with AIOps capabilities—is expected to boost vendor software revenues, offering added value to end-users.

The Importance of Wi-Fi Developments

Further bolstering this upward trend are developments in wireless technology. The anticipated adoption of Wi-Fi 7, coupled with the upcoming introduction of Wi-Fi 8 Access Points (APs), is set to drive demand for multi-gigabit ports. This transition marks a growing need for more robust switching solutions capable of supporting faster and more reliable internet connections, essential for the demands of AI applications.

Conclusion

The Dell'Oro Group’s Campus Ethernet Switch 5-Year Forecast Report provides critical insights into the Ethernet switches optimized for environments outside data centers. The report comprises detailed information on manufacturers' revenues, average selling prices, and port/unit shipments across various speeds. The findings underline a compelling narrative for the telecommunications industry as it navigates the complexities of integrating AI-driven solutions amidst a landscape of rising operational costs and essential connectivity requirements. To delve deeper into these findings, interested parties can reach Dell'Oro Group directly for further analysis.

For businesses looking to stay ahead of the curve, adapting to these changes in component accessibility and pricing structure will be crucial in ensuring not just compliance, but also competitive advantage in an increasingly interconnected, AI-centric market.