Abstract:With the rapid development of information technology such as the Internet, Internet of Things, cloud computing, and big data, various industries such as government, finance, education, energy, electric power, transportation, small and medium-sized enterprises, hospitals, and operators have entered the stage of information construction and transformation, which has brought continuous and stable market demand. In 2021, the market size of mainland switches will be 24.832 billion yuan, and in 2022, the market size of mainland switches will increase to 26.767 billion yuan, a year-on-year increase of 7.78%.
1. Definitions and Classification
A switch is a multi-port network device based on Ethernet for data transmission, each port can be connected to a host or network node, and its main function is to forward data to the destination host or network node according to the hardware address in the received data frame. A switch is a special computer, which consists of hardware and software, including a central processing unit, storage media, interface circuits, and operating systems. Depending on their location and division of labor in the network, switches can be divided into core switches, aggregation switches, and access switches.
Second, industry policies
The rapid development of information technology is promoting the continuous improvement of enterprise and social production efficiency, and the promotion of information technology to the national economy has been continuously strengthened. The State Council and relevant government departments have successively promulgated a series of laws, regulations and policy documents to encourage and support the development of the switch industry, including the Catalogue of Encouraged Industries for Foreign Investment (2022 Edition), the Classification Catalogue of Industrial Strategic Emerging Industries (2023), and the Catalogue for the Guidance of Industrial Structure Adjustment (2024 Edition).
3. Industry barriers
1. Barriers to technology research and development
Network communication technology is a comprehensive application of radio technology, microelectronics technology, computer technology and software technology, etc., and the switch equipment is facing upgrading every five years or so, and the technology-driven phenomenon is significant. Customers' requirements for product transmission rate, security, reliability and other aspects are constantly improving, requiring switch manufacturers to have strong R&D and design capabilities, meet higher standards of technology research and development, process manufacturing, quality management and production control requirements, and achieve rapid product upgrades and technological innovation.
2. Qualification certification barriers
Switch brands are relatively concentrated, and well-known brands in the communication equipment industry such as Cisco, Xinhua III, Huawei, and Xingwang Ruijie occupy more than eighty percent of the market share. In order to become a qualified supplier of the above-mentioned well-known brands, switch manufacturers must undergo strict and multi-level assessment and certification in technology research and development, process manufacturing, quality management, production control, after-sales service and other aspects; At the same time, manufacturers also need to pass product review, trial supply and other links before entering the mass production stage, forming a strong qualification barrier for new entrants in the switch industry.
3. Financial barriers
The switch manufacturing industry is a capital- and technology-intensive industry. New entrants in the industry need to purchase production equipment, factories and other fixed assets, the scale of construction investment is large, and a certain amount of capital is also needed for early technology research and development. At the same time, in order to ensure that the manufacturer can respond to the supply requirements of downstream brands in a timely manner, it will generally stock up in advance according to the forecast of customer demand, so there are certain requirements for the capital turnover capacity of the enterprise, which has certain financial barriers for new switch entrants.
4. Barriers to business cooperation
For manufacturers and brand owners, the long-term cooperation between the two sides needs to go through strict and multi-level certification and inspection, and requires a lot of manpower, financial resources and time costs. If the brand owner frequently changes suppliers, it needs to re-design, develop, certify, test, etc., resulting in wasted costs and time for both parties. Therefore, after the two sides form a good cooperation, manufacturers and brands will generally form a high degree of cooperation stickiness, no major abnormal accidents have occurred between the two sides, and generally maintain a relatively stable business cooperation relationship, so that new entrants in the switch industry face certain business cooperation barriers.
Fourth, the industrial chain
1. Analysis of the industry chain
The raw materials used in the upstream of switches mainly include: chips, optical devices, power modules, connectors, circuit boards, transformers, resistance capacitance, etc., and the upstream is mainly in the electronic components industry. In general, the upstream electronic components industry is basically in a state of full competition, with a large number of enterprises, sufficient production capacity, stable prices, and no major fluctuations in supply, which does not constitute constraints and significant impact on the development of switches. With the continuous development of the domestic upstream industry, most raw materials and accessories can be supplied from China, except for chips that need to be imported from abroad through agents. With the gradual implementation of industrial policies, the growth of investment in downstream fields, digital transformation and the emergence of new technologies, the market space is expected to accelerate.
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Zhiyan Industry Encyclopedia is a production and research tool platform launched by Zhiyan Consulting, which is committed to providing you with a full range of encyclopedic industry information query services. Zhiyan Consulting practices the corporate mission of driving industrial development with information, improves and enriches enterprise methodology, relies on the industry encyclopedia platform to enhance the value of information, and continues to empower industry development and enterprise investment decision-making. As a one-stop systematic research tool for the switch industry, the switch industry encyclopedia comprehensively summarizes the knowledge and information of the switch industry, covering the definition, classification, policy, industrial chain, competition pattern, development trend of the switch industry, etc., and relies on information technology to establish an industry knowledge graph of intelligent interchain, providing in-depth insight and comprehensive information for industry research practitioners and relevant investors.
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