10-Gbit Ethernet revenues to reach $3.6 billion by '04, says Dataquest

10-Gbit Ethernet revenues to reach $3.6 billion by '04, says Dataquest
By Mark LaPedus, Semiconductor Business News
November 3, 2000 (1:55 p.m. EST)
URL: http://www.eetimes.com/story/OEG20001103S0016

SAN DIEGO -- One of the major trends to watch in the communications chip sector will be the shift towards 10-gigabit-per-second Ethernet technology in the wide-area network (LAN) and metropolitan-area network (MAN), according to analysts at this week's Dataquest Semiconductors 2000 conference here.

Traditionally, Ethernet, the de facto standard in the LAN arena, has been a desktop technology, with exception of the higher-end 1-Gbit/sec. Ethernet protocols, which are showing up on local area and wide area networks.

But 10-Gbit/sec. Ethernet is also being positioned for the WAN and MAN, thereby threatening the current networking technologies in these spaces--namely asynchronous transfer mode (ATM) and synchronous optical network (SONET).

Although 10-Gbit/sec. Ethernet promises to be less expensive to deploy than both ATM and SONET, the new Ethernet-based technology will not ship in high volumes at least for another year or two, observed J oe Grenier, semiconductor analyst at San Jose-based Dataquest. "We won't see shipments of 10-Gbit Ethernet until a standard is set," Grenier added.

At present, there is a battle or two over the 10-Gbit/sec. Ethernet standard. Most of the attention-and controversy--are focused on the physical-layer (PHY) chip side, where IC vendors have proposed various schemes to deliver 2.5-Gbit of data over a four-channel technology.

Agilent, Applied Micro Circuits, Broadcom, Vitesse, and others are all developing PHY ICs for 10-Gbits Ethernet networks.

But still, the standard is expected to be set by March 2002. If and when the standard is set, the volumes for 10-Gbit Ethernet technology will explode, thereby driving down costs, according to Dataquest.

In fact, the market for 10-Gbit Ethernet technology is expected to grow from $33.8 million in terms of revenues in 2000, to $71.4 million in 2001, to $713.7 million in 2002, to $1.8 billion in 2003, to $3.6 billion by 2004, according to Dataquest.

The co sts of 10-Gbit Ethernet technology is projected to dorp from $9,200 in terms of average end-user price-per-port in 2000, to $6,751 in 2001, to $5,063 in 2002, $3,924 in 2003, to $3,139 in 2004, Dataquest predicted.

Even 1-Gbit-per-second Ethernet technology is also on the rise, due to its overall acceptance on the LAN and WAN. The market for 1-Gbit/sec. Ethernet is projected to grow from $3.3 billion in terms of total sales in 2000, to $5.8 billion in 2001, to $8.6 billion in 2002, to $11.1 billion in 2003, to $13.8 billion by 2004, they added.

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