LC: Ethernet Vendors Responding to the Surge in InfiniBand

Recently, LightCounting (LC) updated its report on Ethernet, InfiniBand, and Optical Switches for cloud data centers.
In 2023, the new focus of data center operators on artificial intelligence infrastructure has driven sales of Nvidia systems. LC estimates that their InfiniBand switched ASIC sales have increased by 2.3 times compared to 2022. This strong growth will continue until 2024 and then slow down from 2025 to 2028, with a compound annual growth rate of 25% in 2024-2029.
Due to reduced investment in computing nodes within cloud data centers, sales of Ethernet switched ASICs remained largely stable in 2023, but this market is expected to resume growth in 2024 and steadily grow thereafter. Most cloud computing companies plan to use open-source Ethernet switches in their production of AI infrastructure, rather than proprietary InfiniBand solutions. LC estimates that the sales of Ethernet switches will grow at a compound annual growth rate of 14% from 2024 to 2029.
Google is also accelerating its investment in artificial intelligence infrastructure, which largely relies on optical circuit switches (OCS). Other companies are also considering deploying them to leverage the cost and power savings that can be achieved through OCS based data center networks. LC has raised its forecast for OCS hardware sales, with an expected compound annual growth rate of 28% from 2024 to 2029.

From a technical perspective, the next major shift for Ethernet and InfiniBand switched ASICs is the transition to 200Gbps SerDes, which should begin in 2025. The prediction of LC includes the shipment volume of SerDes channels from 50G to 200G speeds, as well as the prediction of using co packaged optical devices (CPO), including switch densities up to 204T. Although large-scale investment in artificial intelligence infrastructure is driving the growth of the entire network system, not all technologies can benefit equally.