Market Dynamics
Market Driving Factors
Increasing Deployment of Data Center to Augment Market Growth Prospect
There is an exponentially increasing deployment of data centers across various regions, owing to the favorable conditions of global digitalization. Technologies like machine learning, virtual reality, artificial intelligence, and the internet of things are rapidly escalating the need for more data storage and robust processing power. Data centers are at the core of these technological advancements.
According to an American real estate company, JLL, there are 63.4 million square feet of data center space globally and another 4.3 million square feet under construction. The increasing deployment of data centers demands various hardware, including ethernet adapters. Therefore, these factors drive the global ethernet adapter market substantially.
High Reliability and Signal Stability to Aid Market Growth
Ethernet internet connection offers superior stability and reliability. While microwave appliances, remote control systems, and Bluetooth headsets interfere with Wi-Fi connections, ethernet network connections are not susceptible to interruptions or shortages in bandwidth. Besides, the ethernet connection provides controlled security for the users connected to the network, preventing harmful security breaches. Therefore, there is growing adoption of ethernet connections, resulting in increased demand for ethernet adapters globally.
Market Restraining Factors
High Installation Cost and Limited Physical Availability for Devices to Restrict Market Growth
Ethernet adapters must be installed properly with various connections and switches for connecting several devices. The system's overall installation cost goes up due to this approach. Not all portable devices, like lightweight laptops and smartphones, can be used with ethernet adapters. These elements serve as market growth inhibitors.
Key Market Opportunities
Increased Demand for Power Over Ethernet (PoE) in Industries to Boom Market Opportunities
A single cable may now carry internet traffic and electrical power due to power over ethernet (PoE) technology. It is a recent technological advancement. A network and an electrical connection are typically required for many connected devices, such as networked security cameras or IP cameras. There are several widely used methods for power transmission over ethernet cables. Since 2003, IEEE 802.3 has standardized two of them. This benefit of PoE is anticipated to open up the attractive potential for the market for ethernet adapters.
Regional Analysis
By region, the global ethernet adapter market is segmented into North America, Europe, Asia-Pacific, and LAMEA.
Is North America Likely to Dominate the Global Ethernet Adapter Market?
North America is the highest revenue contributor and is estimated to grow at a CAGR of 30.9% during the forecast period. In the past few decades, the internet penetration in North America has increased the use of computers, which augments the use of ethernet adapters to construct local area networks. Advancements in ethernet adapters, which provide a high data rate and broad bandwidth, contribute to the growth of the North American ethernet adapter market. Further, developing the video gaming sector that uses high-speed ethernet for LAN installation influences the demand for ethernet adapters.
Asia-Pacific is the fastest-growing region. It is one of the regions with the most significant number of growing countries, such as Japan, India, South Korea, Taiwan, and the Philippines, in terms of digital technology and infrastructure in residential, commercial, and industrial sectors. An increase in internet penetration demands ethernet adapters for network extension and installation. The advantage of ethernet adapter, such as high-speed transfer, reliability, robust nature, and efficient connection over long range, influences the demand for ethernet adapter.
Europe is the second-largest region and is projected to reach USD 11,092 million by 2030, growing at a CAGR of 34.1%. The European ethernet adapter market growth is mainly driven by increased economic activities, a surge in industrialization, and a rise in internet users. Industrialization promotes the setup of office buildings, data centers to provide data storage services, and others. These applications require the need of ethernet adapter for the transfer of data. Further, using ethernet adapters for PoE increases its demand in control rooms, network backbones, and access links, driving the regional market.
Segmental Analysis
The global ethernet adapter market is segmented by type, interface type, the data rate per port, port configuration, application, end-user, and region.
On the Basis of Type
By type, the global market is segmented into External and Internal.
The Internal segment is the highest contributor to the market and is estimated to grow at a CAGR of 34% during the forecast period. The internal type of ethernet adapter attributes the majority market share of ethernet adapters, owing to a wide range of applications and benefits of a stable internet connection. The growing demand for high bandwidth network connections is estimated to boost the internal type of market. Furthermore, the digitalization of businesses necessitates the increased capacity of data centers and creates remunerative opportunities for market growth during the forecast period.
The External segment is the second largest. Increasing demand for ultra-light & compact laptops and other IoT devices is primarily driving the need for external ethernet adapters. Most leading computer manufacturers, such as HP, Lenovo, and Dell, have recently launched slim, lightweight laptops. Moreover, increased adoption of IoT devices is projected to further accelerate the growth of the ethernet adapter market during the forecast period.
On the Basis of Interface Type
By interface type, the global market is segmented into PCIe, OCP, and USB.
The PCIe segment is the highest contributor to the market and is estimated to grow at a CAGR of 34.1% during the forecast period. PCIe was introduced to meet the needs for higher bandwidth, greater flexibility, and enhanced networking device performance. Moreover, the high-end software is continuously evolving at breakneck speed to suffice the increasing demand for efficient performance, which fuels the need for PCIe ethernet adapters. The PCIe interface type ethernet adapter is anticipated to dominate the market during the forecast period.
The USB segment is the second largest. Most modern electronic devices possess at least one USB port for charging or connecting with other devices. These devices include laptops, smartphones, cameras, flash drives, printers, external hard drives, and game consoles. These devices can transfer data or files through wired or wireless connections. Increasing adoption of these devices implicitly fuels the growth of the ethernet adapter market during the forecast period.
On the Basis of Data Rate Per Port
By data rate per port, the global market is segmented into Up to 1 GbE, 10 GbE, 25 GbE, 40 GbE, 50 GbE, 100 GbE, and 200 GbE.
The Up to 1 GbE segment is the highest contributor to the market and is estimated to grow at a CAGR of 11.6% during the forecast period. The increasing penetration of the internet in developing and under-developed countries fosters the up to 1 GbE ethernet adapter market. The increased internet use, especially in the residential sector, further accelerates the ethernet adapter market growth.
The 100 GbE segment is the fastest growing. Growing industrialization and globalization of businesses are driving market growth. Automation of manufacturing plants, online inventories, and supply chain management are prominent factors fueling the ethernet adapter market growth. Deployment of data centers and server rooms in the industrial and commercial sectors is anticipated to fuel the ethernet adapter growth for 100 GbE during the forecast period.
On the Basis of Port Configuration
By port configuration, the global market is divided into Single, Dual, and Quad.
The Dual segment is the highest contributor to the market and is estimated to grow at a CAGR of 34.4% during the forecast period. Embedded systems, routers, and desktops are prime applications of the dual-port configuration of ethernet. A motherboard with two ports for ethernet connections does not require an external router. The computer or laptop acts as a router connecting multiple devices to a network. It eliminates the need for routers when required to be connected to a small network. Therefore, there is a growing demand for dual-port configuration of ethernet during the forecast period.
The Single segment is the second largest. Single port ethernet adapters are generally used in laptops and external ethernet adapters. Since most laptops and desktops have the built-in single port configuration of ethernet, it has a significant market share in the ethernet adapter market. The rapid adoption of USB to ethernet adapters is estimated to fuel the single port configuration of ethernet adapters owing to the rapid adoption of compact and lightweight electronic devices.
On the Basis of Application
By application, the global market is segmented into Servers, Embedded Systems, Consumer Applications, Routers & Switches, Desktop Systems, and Others.
The Embedded Systems segment is the highest contributor to the market and is estimated to grow at a CAGR of 34.4% during the forecast period. Embedded systems are an integral part of modern technological developments. The constant evolution of artificial intelligence (AI), machine learning, augmented reality (AR), virtual reality (VR), deep understanding, and the internet of things (IoT) drive the embedded systems industry. The evolving embedded systems industry necessitates using ethernet adapters, subsequently driving the market to grow rapidly.
The Servers segment is the fastest growing. Servers not only improve efficiency and productivity in a business but also help businesses to store data. It enables access to data and information from any workstation, allowing employees to work remotely or while traveling. Digitalization of businesses necessitates servers; hence, there is growing adoption of servers. Ethernet adapters are an integral component of servers. With this increasing demand for servers, the ethernet adapter market is estimated to grow rapidly.
On the Basis of End-User
By end-user, the global market is divided into Industrial, Residential, and Commercial.
The Commercial segment is the highest contributor to the market and is estimated to grow at a CAGR of 32.5% during the forecast period. Ethernet in commercial sectors requires a high-speed network, broad bandwidth, and low latency for data transfer between devices. Further, the commercial sector requires security and surveillance for the safety of data & information, inventory, goods, and other management purposes. An increase in the usage of machine devices interlinked for the transfer of diagnosed data boosts market growth.
Furthermore, the connection requires the setup of reliable ethernet services to support healthcare's most demanding digital networking requirements to ensure the bandwidth capacity and performance needed to support advanced medical applications. Therefore, the penetration of Cat6 and Cat6a has increased in many hospitals. Consequently, the ethernet adapter market foresees rapid growth in the commercial sector during the forecast period.
The Industrial segment is the fastest growing. In various industries, ethernet is used to control and transmit data among multiple machines and systems. Ethernet used in an industrial setting frequently requires more robust adapters, connectors, cables, and better performance in harsh conditions. To achieve better performance, industrial ethernet uses specialized protocols in conjunction with the ethernet. The most popular industrial ethernet protocols are PROFINET, EtherNet/IP, EtherCAT, SERCOS III, and Powerlink.
