Data Center Networking

SAN FRANCISCO – October 31, 2026 -- Server-class Ethernet NIC revenues more than doubled in two years, rising from less than $6 billion in 2023 to more than $13 billion in 2025, according to Crehan Research.

2025 delivers record revenue and record growth

The report says 2025 produced both the highest revenue and the fastest revenue growth the market has recorded. Seamus Crehan, president of Crehan Research, said the market has followed "nearly a vertical straight line" since the initial release of ChatGPT.

200GbE and 400GbE NIC sales more than triple in one year

Sales of 200 gigabit Ethernet (GbE) and 400GbE NICs more than tripled over the past year, as customers rapidly deployed high-speed NICs in generative AI networks. These speeds now account for more than half of total market revenues.

SAN FRANCISCO – October 31, 2026 -- The data center Ethernet switch market exceeded $20 billion in revenue and 100 million port shipments in 2024, a record year for both measures, according to Crehan Research.

Branded and ODM-direct segments both grow as late-year branded sales accelerate

A late-year acceleration in branded switch sales lifted the full-year total. Both branded and ODM-direct data center Ethernet switching posted annual growth.

400GbE and 800GbE reach one-third of annual revenue after 50% growth

The two speed tiers grew 50% year on year and now account for a third of total annual market revenue. Crehan Research says 400GbE adoption has been broad-based across applications and customer segments. Strong 800GbE adoption has so far been driven primarily by generative AI.

SAN FRANCISCO – October 31, 2026 -- Server-class Ethernet NIC revenues rose by $2 billion in calendar-year 2024, according to the latest report from Crehan Research. Market revenues have doubled in just three years, even though one of those years was weak because of a general market inventory correction.

Data center buyers shift more networking budget to NICs

Crehan's analysis shows data center customers are spending a greater portion of their networking budgets on Ethernet NICs. That share has risen even as the overall budgets grew robustly.

Seamus Crehan, president of Crehan Research, said data center Ethernet NICs have moved from low-cost commodity chips soldered onto volume server motherboards to high-performance, differentiated add-in cards. These cards now handle a multitude of high-value network functions, including some formerly run by CPUs.

SAN FRANCISCO – October 31, 2026 -- Combined data center Ethernet switch and NIC market revenue will double within five years to surpass $50 billion, according to Crehan Research's latest Data Center Networking Long-Range Forecast Reports.

Back-end AI Ethernet networking revenue to grow eight-fold

Generative AI is expected to be a major driver of the expansion. Crehan forecasts that back-end AI Ethernet networking alone will increase eight-fold and account for over one-third of total market revenue.

One-million-plus accelerator clusters drive investment plans

Seamus Crehan, president of Crehan Research, attributed the forecast to customer plans for significant investment, with numerous AI clusters of more than one million accelerators now on the horizon. Many additional customers are deploying small-size Ethernet clusters as AI extends across business functions, he said.

SAN FRANCISCO – October 31, 2026 -- Branded data center Ethernet switch revenue rose 7% year-over-year in calendar Q3 2024 to the highest quarterly level on record, according to Crehan Research. The result ends two consecutive quarters of decline.

800GbE deployments for AI clusters drive the rebound

A strong ramp of 800 gigabit Ethernet (GbE) data center switches was a key contributor to the growth. These switches provide the network fabric for AI compute clusters. Crehan Research expects 800GbE to see the fastest speed ramp ever recorded for data center Ethernet switches.

San Francisco – October 31, 2026 -- Merchant-built server-class Ethernet NIC revenue rose 40% year-over-year in calendar Q2 2024, reaching an annualized run-rate close to $5 billion, according to Crehan Research. The figures cover adapters, controllers and LOMs.

SmartNICs grow over 50% while mainstream NICs gain over 30%

Foundational/Performance Ethernet NIC revenue increased more than 30% year-over-year. DPU/IPU Ethernet SmartNIC revenue grew more than 50%. Crehan attributes the growth largely to numerous concurrent Ethernet speed and technology upgrades.

Crehan Research President Seamus Crehan said the market now supports almost three times as many Ethernet speeds as a decade ago, when there were three.