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10G Ethernet market seen at $3.4B in 2014

Posted: 24 Dec 2010 ?? ?Print Version ?Bookmark and Share

Keywords:Ethernet? market report? forecast? Fibre Channel?

Analysts from the The Linley Group say that the Ethernet chip market will grow from about $2.8 billion in 2010 to $3.4 billion in 2014, in a report. The growth will come from the 10GbE segment which could see significant market share shifts, while gigabit parts remain the larger and less dynamic sector.

The convergence of Ethernet with storage protocols including Fibre Channel, iSCSI and Fibre Channel over Ethernet (FCoE) "is a big inflexion point for 10GbE, and we could see significant market share changes if vendors fumble this transition," said Jag Bolaria, a senior analyst at Linley Group.

The need to develop robust Fibre Channel software will be a big challenge for leaders such as Fulcrum Microsystems and an advantage for Fibre Channel incumbents such as Emulex and QLogic, he said. The fact that data center bridging standards won't be complete until 2011, may push out broad adoption of FCoE until 2012, he added.

Switch ports for 10GbE more than doubled to 4.1 million in 2010 and are expected to grow 42 percent on a compound basis to 2014, the report said. With only three vendors in the market, it holds opportunities for newcomers.

Broadcom is the current leader in 10GbE switch chips. Marvell may be shaping up to be a distant second, and Fulcrum could be the target of companies such as Cortina looking to enter this space, Bolaria said,

Most 10GbE nets will ride optical links through 2013, but 10GBase-T chips for copper cables are set for growth in 2011, riding the ramp of Intel's Romley servers that will use them, Bolaria said. "We expect shipments of 10GBase-T chips to exceed one million ports in 2011, and grow to more than 10 million ports in 2013," the report said.

Business consolidation
Despite the growth, consolidation is expected to continue in the segment. Likely winners will be ones with 40nm chips in production such as Broadcom, Aquantia and PLX/Teranetics, the report said.

FPGAs will remain the winners for the next few years in the still-emerging 40- and 100GbE markets, while other players may become casualties, said Bolaria. That's because shipments of millions of 40GbE ports may not occur until 2015 or beyond, the report said.

The IEEE approved the 40/100GbE standard this year, but 40GbE shipments generally aimed at data center switches are only expected to hit 650,000 ports in 2014. Volumes for the 100GbE chips, geared for core telecom nets that have slow qualification cycles, will come even more slowly.

By contrast, Gigabit Ethernet will remain the lion's share of the market. Switch port shipments will more than double from 2010 to 2014, but average selling prices will decline slowing revenue growth to $1.35 billion in 2014 from $1.1 billion in 2010, the report said.

Broadcom and Marvell control about 90 percent of the Gigabit switch market. However contenders such as Vitesse and Realtek have an opportunity to take as much as a 20 percent slice of the pie over the period.

"The market is too broad for Broadcom and Marvell to cover completely with a single architecture--leaving niche opportunities," the report said. "These opportunities are more likely in [small business systems rather than systems for] larger enterprises where software plays a bigger role," it added.

- Rick Merritt
EE Times

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