October 27, 2008

The Linley Group Sees Data-Center Transition Driving Demand for 10GbE

Citing data-center and aggregation switches as the primary applications driving growth for 10 Gigabit Ethernet (10GbE) through 2009, The Linley Group announces the release of its latest report, "A Guide to Ethernet Switch and PHY Chips, Fifth Edition." Stating that the transition to 10GbE is still in its early stages, the firm believes that 10GbE switch shipments are ramping and should reach more than one million ports in 2008. The firm also believes that the Gigabit Ethernet (GbE) market has already consolidated around a handful of major vendors, with startup activity shifting to 10GbE.

"The next major technology transition is underway, as the Ethernet market evolves to support yet another 10x increase in data rates," said Jag Bolaria, coauthor and senior analyst, The Linley Group. "Ethernet evolution drives incumbent vendors to become more competitive as they must once again vie for leadership, and gives new entrants the opportunity to emerge and gain share. Our guide uniquely provides readers with both the business and technical data they need to identify which companies, technologies and chips are best for their designs and why."

The new report covers a number of key segments in the networking market, including:

 --  Gigabit Ethernet --  10GbE switch chips --  GbE-over-Copper PHYs --  10GbE PHYs for copper and optical media --  10GBase-KR backplane transceivers --  Power-over-Ethernet (PoE) controllers      

In addition to 10GbE growth, the firm reports that the infrastructure market for GbE silicon grew 15 percent in 2007, and expects combined GbE/PHY revenue to grow about 12 percent in 2008, with switch-plus-PHY revenue slowing in 2009 and beyond.

As the data center transitions to 10GbE, thousands of servers will require connections. With virtualization rapidly becoming a mainstream technology, server usage and I/O bandwidth requirements will further increase. Moreover, LAN aggregation will be a critical application for 10GbE switches. These trends will drive the need for higher port counts, Layer 3 switching, and security features, according to the report. In 2009, the combination of 10GbE switch chips, optical PHYs, and 10GBase-T adoption should make 10GbE a meaningful portion of overall Ethernet switch/PHY revenue.

Although Broadcom is the leading supplier of Gigabit Ethernet components, The Linley Group believes it has not secured its place as the dominant supplier for 10GbE products. Solarflare and Aquantia offer 10GBase-T PHYs with the lowest power dissipation, while Fujitsu is the first vendor to integrate 10Gbps serdes in its 10GbE switch, and AMCC was the first vendor to sample a 10GBase-KR transceiver for the backplane. Competitors looking to challenge Broadcom must move quickly and aggressively to build a leading set of 10GbE components.


"A Guide to Ethernet Switch and PHY Chips, Fifth Edition" is currently available directly from The Linley Group and is priced at $2,995 for a single-user license. For further details, visit the web site at http://www.linleygroup.com/Reports/gigabit_guide.html

About The Linley Group

The Linley Group, the leading provider of independent technology analysis for networking, communications, and consumer electronics semiconductors, covers emerging areas such as high-speed embedded processors, Gigabit and 10G Ethernet, mobile communications processors, and more. The company provides in-depth technology reports and interactive seminars as well as strategic consulting services tailored to the individual client. To get free access to The Linley Group's analysis of recent news and events in these markets, subscribe to our e-mail newsletters. More information about The Linley Group is available at http://www.linleygroup.com.

Note to editors: To speak to an analyst from The Linley Group about this report, please contact: Erika Powelson, Orr & Company, 831.424.1811 or email [email protected]

 Sales Contact: Candace Doyle The Linley Group 408.370.7631 [email protected] Web site: www.linleygroup.com  Public Relations Contact: Erika Powelson Orr & Company 831.424.1811 [email protected]

SOURCE: The Linley Group