Trendforce forecasts AI networking and interconnect market to approach doubling by 2027

TrendForce released a forecast indicating that the market value for AI networking and interconnectivity is projected to reach $279.8 billion by 2027, representing a Compound Annual Growth Rate (CAGR) of 95% between 2024 and 2027. Analyzing product segments, switches are expected to remain the largest revenue contributor in the coming year, accounting for $105 billion (38% of the market). Furthermore, Network Interface Cards (NICs) and Data Processing Units (DPUs) are anticipated to double their revenue to $57.4 billion by 2027, with pluggable optical modules reaching $84.1 billion. These three categories collectively represent 88% of the market. Regarding interconnection types, the vertical scaling (Scale-up) for high-speed links between AI chips is set for the fastest growth, projected to capture 24% of the AI network value. Growth in horizontal scaling (Scale-out), driven by the trend toward 1.6T bandwidth upgrades connecting to backend servers, is also anticipated. TrendForce noted that the supply chain's value distribution will continue to shift as platform combinations and optical interconnect architectures evolve.