Router and Switch Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product (Internet Exchange Router, Service Provider Core Router, Multiservice Edge Router, Ethernet Service Edge Router, ATM & Ethernet Switch), By Service (BRAS, Ethernet Aggregation, Ethernet Access, Internet Data Center/Collocation/ Hosting, Others), By Region, By Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 65.61 Billion
CAGR (2026-2031)	7.05%
Fastest Growing Segment	Internet Data Center/Collocation/ Hosting
Largest Market	North America
Market Size (2031)	USD 98.74 Billion

Market Overview

The Global Router and Switch Market will grow from USD 65.61 Billion in 2025 to USD 98.74 Billion by 2031 at a 7.05% CAGR. Routers function as the essential hubs that direct data traffic between distinct networks, while switches operate within a single network to connect devices and facilitate efficient internal data exchange. The primary drivers fueling growth in this sector include the exponential rise in global internet traffic, the rapid expansion of hyperscale data centers, and the widespread deployment of cloud computing architectures. Furthermore, the burgeoning demand for high-speed connectivity to support the Internet of Things creates a sustained need for robust networking hardware across enterprise and service provider environments.

Nevertheless, the industry faces a significant challenge in the form of high capital expenditure requirements and economic volatility, which can compel organizations to defer necessary infrastructure upgrades. These budgetary constraints often limit the ability of enterprises to replace legacy systems immediately, potentially impeding market expansion. This modernization remains critical because, according to the International Telecommunication Union, in 2025, 5G networks are estimated to cover 55 percent of the global population. Such extensive wireless reach mandates a powerful and scalable backend of routing and switching infrastructure to manage the resulting surge in data throughput.

Key Market Drivers

The expansion of hyperscale and edge data center facilities, driven largely by the integration of AI-driven network optimization tools, serves as a primary catalyst for the router and switch market. As cloud service providers and large enterprises scale their infrastructure to support artificial intelligence workloads, there is an immediate requirement for high-performance switches capable of handling massive data throughput and minimizing latency. This shift is rapidly accelerating the adoption of 400G and 800G port speeds, which are essential for facilitating faster data processing within dense computing clusters. According to Cisco Systems, August 2024, in the 'Fiscal 2024 Fourth Quarter Earnings' press release, the company crossed the threshold of USD 1 billion in AI orders, underscoring the substantial capital allocation toward infrastructure capable of supporting these advanced computational demands.

Concurrently, the accelerated global deployment of 5G network infrastructure forces telecommunications providers to upgrade their core and backhaul systems. Operators must deploy carrier-grade routers and switches to manage the increased density and speed requirements inherent to next-generation wireless standards. According to the GSMA, February 2024, in 'The Mobile Economy 2024' report, mobile operators worldwide are projected to invest USD 1.5 trillion in their networks between 2023 and 2030, with over 90 percent of this expenditure oriented toward 5G. This heavy investment directly drives procurement of robust networking hardware to handle escalating loads; according to Ericsson, November 2024, in the 'Ericsson Mobility Report', global mobile network data traffic grew 21 percent between the third quarter of 2023 and the third quarter of 2024.

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Key Market Challenges

The primary challenge hampering the growth of the Global Router and Switch Market is the burden of high capital expenditure requirements coupled with economic volatility. Networking infrastructure upgrades necessitate substantial financial outlay, and in an uncertain economic climate, enterprises and service providers frequently tighten budgets to preserve liquidity. This financial caution forces organizations to sweat their existing assets longer, deferring the retirement of legacy systems. As a result, the replacement cycle for routers and switches lengthens significantly, directly reducing the volume of new equipment shipments and stalling revenue generation for hardware vendors.

This contraction in spending capacity critically undermines the market's ability to capitalize on technological advancements. Although the technical demand for robust 5G and cloud backends exists, the economic feasibility of deploying such infrastructure is compromised. This trend of reduced investment is evident in industry forecasts. According to 'GSMA', in '2024', 'global operator capital expenditure is forecast to decline by about 10 percent through 2030 following a period of flat growth'. This projected decrease in infrastructure spending demonstrates how budgetary constraints are actively restricting the procurement of essential networking hardware, thereby impeding the overall market expansion.

Key Market Trends

The convergence of network security and routing into Secure Access Service Edge (SASE) architectures is fundamentally reshaping enterprise WAN strategies. Organizations are increasingly retiring legacy, standalone branch routers in favor of unified platforms that integrate software-defined wide area networking with cloud-native security stacks. This consolidation simplifies management and enhances posture against distributed threats, effectively merging the traditionally siloed markets of routing and cybersecurity. Validating this rapid adoption, according to Palo Alto Networks, August 2024, in the 'Fiscal Fourth Quarter 2024 Financial Results', the company reported that its Next-Generation Security annual recurring revenue grew 43 percent year over year to reach USD 4.2 billion, signaling a massive enterprise shift toward these integrated secure networking models.

Simultaneously, a critical technological shift is occurring in high-performance computing as data centers migrate from proprietary InfiniBand interconnects to standardized High-Performance Ethernet for artificial intelligence workloads. While InfiniBand historically dominated low-latency clusters, recent advancements in Ethernet fabrics now offer comparable performance with superior cost efficiencies and broader ecosystem compatibility, prompting hyperscalers to re-architect their AI backends. This transition is underscored by performance gains in real-world deployments; according to Arista Networks, May 2024, in the 'First Quarter 2024 Earnings Call', the company highlighted that Ethernet is proving to offer at least 10 percent improvement in job completion performance across all packet sizes versus InfiniBand, driving its displacement in next-generation GPU clusters.

Segmental Insights

Based on comprehensive market analysis, the Internet Data Center/Collocation/Hosting segment stands out as the fastest-growing category in the Global Router and Switch Market. This robust expansion is primarily fueled by the accelerating global shift toward cloud computing and the exponential rise in data traffic. As enterprises increasingly migrate critical workloads from on-premise facilities to third-party colocation and hosting environments, there is a surging demand for scalable infrastructure. Consequently, service providers are aggressively investing in high-performance routing and switching hardware to ensure the low latency and reliable connectivity required for modern digital operations.

Regional Insights

North America maintains a leading position in the global router and switch market, driven by substantial investments in telecommunications infrastructure and data center operations. The region benefits from the widespread adoption of cloud computing services and a strong focus on enterprise digital transformation. Furthermore, regulatory support from institutions like the Federal Communications Commission in the United States facilitates broadband expansion through various connectivity initiatives. This continuous emphasis on network modernization and the deployment of high-speed internet services creates a stable demand for routing and switching hardware across the continent.

Recent Developments

• In October 2025, Arista Networks introduced the R4 Series, a next-generation family of switches and routers optimized for AI clusters and cloud data centers. The new platforms featured high-density 800-gigabit Ethernet ports and introduced novel 3.2 Tbps HyperPorts, which aggregate bandwidth to significantly reduce the completion time for distributed artificial intelligence training jobs. The company highlighted that this hardware release focused on improving power efficiency and scalability, enabling data center operators to build massive, non-blocking network backbones capable of supporting the intensive processing requirements of modern machine learning applications.
• In June 2025, Cisco Systems unveiled a new architecture of networking hardware at its annual customer conference, specifically purpose-built to handle the rigors of enterprise artificial intelligence workloads. The product launch included the new C9350 and C9610 Smart Switches, which feature high-throughput silicon and low-latency performance, alongside a new series of integrated secure routers. These devices were designed to embed advanced security protocols and SD-WAN capabilities directly into the network fabric, helping organizations manage explosive traffic growth while protecting infrastructure from sophisticated cyber threats.
• In May 2025, Nokia expanded its consumer networking portfolio by launching two new Wi-Fi 7 compatible devices, the Beacon 4 and Beacon 9 gateways. These routers were engineered to provide residential users with reliable, multi-gigabit broadband speeds essential for bandwidth-intensive applications such as 8K streaming and real-time online gaming. The company stated that the new gateways would allow telecommunications operators to offer affordable, high-speed internet packages that fully leverage the lower latency and increased capacity of the Wi-Fi 7 standard, ensuring seamless connectivity throughout complex home environments.
• In January 2024, Hewlett Packard Enterprise and Juniper Networks entered a definitive agreement under which the former would acquire the latter in an all-cash transaction valued at approximately $14 billion. This strategic collaboration was designed to accelerate the development of AI-native networking solutions by combining complementary portfolios across campus, branch, and data center environments. The acquisition aimed to double the size of the acquiring company's networking business, creating a comprehensive suite of products intended to provide customers with a secure, high-performance alternative for managing modern connectivity and artificial intelligence workloads.

Key Market Players

• Cisco Systems, Inc.
• Huawei Technologies Co., Ltd.
• Juniper Networks, Inc.
• Arista Networks, Inc.
• Nokia Corporation
• Hewlett Packard Enterprise Development LP
• Dell Technologies Inc.
• Extreme Networks, Inc.
• ZTE Corporation
• Ericsson AB

By Product	By Service	By Region
Internet Exchange Router Service Provider Core Router Multiservice Edge Router Ethernet Service Edge Router ATM & Ethernet Switch	BRAS Ethernet Aggregation Ethernet Access Internet Data Center/Collocation/ Hosting Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Router and Switch Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Router and Switch Market, By Product:

• Internet Exchange Router
• Service Provider Core Router
• Multiservice Edge Router
• Ethernet Service Edge Router
• ATM & Ethernet Switch

• Router and Switch Market, By Service:

• BRAS
• Ethernet Aggregation
• Ethernet Access
• Internet Data Center/Collocation/ Hosting
• Others

• Router and Switch Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE