A recent report highlights that the Switch industry is poised to benefit overall from advancements in AI and data center infrastructure. PCIe Switches are primarily used for computer I/O, while products like NVLink/UALink Switches are key for high-speed Scale-up interconnects between cards, and Ethernet Switches are mainly applied in Scale-out scenarios. The analysis suggests the Switch sector is set to continue gaining from the ongoing development of AI and data centers, leading to a maintained "Recommended" rating for the computer industry.
Primary Applications for Switches: Computer I/O, Scale-up, and Scale-Out
PCIe Switches serve as general-purpose port expansion devices within I/O systems. They are utilized to extend a host's PCIe ports, enabling connections to a multitude of input/output (I/O) devices or other subsystems in servers and storage systems. According to information from MICROCHIP, its PCIe switches offer ultra-high-speed real-time data transfer, extremely low latency, and robust multi-device connectivity, facilitating seamless information transfer across multiple endpoints.
AI and Data Center Build-Out Drives Increased Switch Demand
The PCIe and Ethernet Switch markets are expected to remain robust. IDC data projects that global Ethernet switch market revenue will reach $55.1 billion in 2025, representing a year-on-year increase of 31.5%. Within this, data center Ethernet switch revenue is forecast to hit $32.5 billion, surging 53.5% year-on-year. According to DATAINTELO, the global PCIe switch market is estimated at approximately $2.8 billion in 2025, with expectations to grow to $6.9 billion by 2034, reflecting a CAGR of about 10.6% from 2026 to 2034. As a critical semiconductor component, PCIe switches enable the sharing and routing of PCIe lanes among multiple devices, significantly enhancing bandwidth efficiency and scalability in modern computing architectures.
High Market Concentration Among Leading Switch Players, Ample Room for Domestic Substitution
The competitive landscape of the PCIe switch market is relatively concentrated. DATAINTELO estimates that Broadcom holds a leading position in revenue share, projected to account for about 31.5% of global PCIe switch revenue in 2025. Broadcom's dominance largely stems from its 2012 acquisition of PLX Technology. MICROCHIP Technology, following its acquisition of Microsemi, holds the second-largest market share at approximately 18.2%. The Ethernet Switch market is similarly concentrated. In the overall Ethernet switch market for Q4 2025, Cisco's total Ethernet switch revenue reached $4.5 billion, representing a market share of about 27.6%. In the commercial Ethernet switch chip market in China for 2020, based on sales, Broadcom, Marvell, and Realtek held shares of 61.7%, 20.0%, and 16.1% respectively, collectively accounting for 97.8%.
Relevant Companies
1) Switch: Vantone Neo Development Group Co.,Ltd., Montage Technology Co.,Ltd., Suzhou Centec Communications Co.,Ltd., Ruijie Networks Co.,Ltd.;
2) CPU: Hygon Information Technology Co.,Ltd., China Greatwall Technology Group Co.,Ltd. (via Phytium Information);
3) AI Chip: Cambricon Technologies Corporation Limited, Muxi Ltd., Biren Technology, Iluvatar CoreX, Verisilicon Microelectronics(Shanghai)Co.,Ltd.;
4) Super Node/Servers: Ieit Systems Co.,Ltd., Huaqin Co.,Ltd., Dawning Information Industry Co.,Ltd., Unisplendour Corporation Limited, Foxconn Industrial Internet Co.,Ltd., Lenovo Group Ltd.;
5) Liquid Cooling: Dongguan Dingtong Precision Metal Co.,Ltd., Shenzhen Frd Science&Technology Co.,Ltd., Guangdong Shenling Environmental Systems Co.,Ltd.;
6) Power Supply: China Greatwall Technology Group Co.,Ltd., E-Lite, Shenzhen Megmeet Electrical Co.,Ltd., Hangzhou Zhonhen Electric Co.,Ltd.;
7) Computing Power Rental: Sharetronic Data Technology Co.,Ltd., Hongjing Technology, Maxvision Technology Corp., Litong Electronics, Zhiwei Intelligent, Runjian Co.,Ltd..
Risk Factors
Risks include those related to Switch chip technology R&D and iteration, concentration and cyclical fluctuations in downstream industry demand, global trade friction, supply chain volatility and capacity assurance, macroeconomic fluctuations, and the risk that domestic substitution may not meet expectations.
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