According to a recently published report by Dell'Oro Group, demand for high end routers and aggregation switches is projected to increase at a five-year compounded annual growth rate (CAGR) of 4%. The increase in demand for routing equipment is expected to be driven by improving conditions across multiple facets of the networking industry.
"We slightly raised our outlook for the routing market due to improving market conditions," said Jimmy Yu, Vice President at Dell'Oro Group. "From our perspective, the inventory correction that pulled sales of high-end routers down by 18% in 2024 is behind us. Looking ahead, we see numerous opportunities for routers as economic conditions improve and bandwidth demands increase. In addition, cloud providers are aggressively investing in AI computing clusters and developing agentic AI applications. So, the question we are all asking ourselves is when will the new bandwidth be needed and how much."
Read Dell'Oro Group's report here: "Market Research Reports on Service Provider Router & Switch"
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