Server-Class Ethernet NIC revenues increased by $2 billion in calendar-year 2024, according to the latest report from Crehan Research. The increase reflects a continuation in the trend of strong investment in server-class Ethernet NICs, resulting in a doubling of market revenues in just three years—despite one of those years having seen relatively weak performance due to a general market inventory correction. Analysis of the strong growth also reveals that data center customers are spending a greater portion of networking budgets on Ethernet NICs (see accompanying chart).
“Data Center Ethernet NICs have gone from low-cost commodity chips soldered down on volume server motherboards to high-performance, differentiated, add-in cards that provide a multitude of high-value network functions, including ones formerly handled by CPUs,†said Seamus Crehan, president of Crehan Research. “As a result, Ethernet NICs have seen an upward trend in share of data center networking budgets, even as those budgets grew robustly.”
Crehan also reported a strong surge in demand for the highest speed NICs during the year, with combined 100GbE, 200GbE, and 400GbE NICs increasing more than 50% in both shipment and revenues. “Although generative AI was a driver of the high-speed Ethernet NIC demand surge,” Crehan said, “there were numerous other areas contributing to the growth, including general cloud compute and storage.”
