China Router Industry Market is highly concentrated, the top three companies occupy nearly 90% market share

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1. Router Overview

Router is the network communication device connected to each LAN, WAN network, and has network interconnection, data processing, and network management functions, which can determine network addresses and select IP paths. Depending on the application scenario, the router can be divided into telecommunication-class routers and family-class routers. The telecommunications-class router can be subsequently divided into three types of network levels: core routers, aggregation routers, access routers.

Telecommunication-class router

Data Source: Huasa Industrial Research Institute organizes the main features of the

router include network interconnection, data processing and network management, responsible for different local area networks Data transfer between (LAN). The router divides the network into two different local area networks (LAN1 and LAN2). Terminal devices in the respective interior of LAN1 and LAN2 can be interconnected by switches, and terminal devices within LAN1 and the terminal devices within LAN2 must communicate with each other via routers.

Router function

Data Source: Huasa Industrial Research Institute organizes

The switch with the router has the function of data transfer, but the corresponding network hierarchy is different. The switch is located in the link layer and is responsible for the interconnection of the internal terminal device of the LAN. The switch forwards the packet according to the destination MAC address. The router is located in the network layer to implement the interconnection of different local network devices. The router completes data forwarding according to the purpose IP address. Second, China Router Industry Industry Chain Analysis

Upper reaches of China Router Industry Chain mainly includes processor manufacturers and optical module manufacturers, with the highest processor costs; router industry is router production enterprises, including The first echelon's Huawei and the second echelon are ZTE, and the downstream participants in the router industry are mainly three major telecom operators.

China Router Industry Chain

Data Source: Huasheng Industrial Research Institute organizes

1. Analysis of the upstream of the industrial chain

Advance in transmission technology such as fiber, China's network bandwidth growth rate has gradually exceeded the growth rate of CPU processing capabilities, making the router based on "CPU + operating system" gradually became a bottleneck of network development, and CPU processors were gradually specialized in the router. ASIC The chip is replaced with the network processor. The high-end router uses the "CPU + NP" multi-core solution with a cost proportion of 20%.

The optical module is located at the port of the router, responsible for the conversion of the photoelectric signal. In the transmit port of the router, the optical module converts the signal forwarded signal into an optical signal, and then transmits to the next hop router via the fiber. The next hop router receives the port to connect the optical module and the optical fiber, and convert the received optical signal into an electrical signal. The cost of the optical module in the router is around 5%.

R & D costs of routers account for 25% of router development costs, and the renewal and development capabilities of the route protocol are the core competitiveness of network equipment manufacturers. Currently more than one-third of the routing agreement is delineated by Cisco, laying Cisco's leading position in the global router industry.

Data Source: Public Data Consolidation

2 . China Telecom operators usually purchase communication devices such as routers and switches through bidding. The router is located in the core of the network. When the telecom operator purchases routers, the router is usually investigated router performance, including routers throughput, network security protection, routing capabilities, packet loss rate, network management and reliability, etc.

Three major telecom operators are devices such as frequent bidding and extension of network capacity. In the first year of the scale of the 5G base station, the three operators issued an announcement of the purchase router. The router industry benefits from 5G large-scale construction and will usher in a new round of growth.

Data Source: Huasasas University Research Institute organizes

three, China Router Industry Market size

The technical barrier in the router industry is extremely high, and there are fewer participants. China Router Head Enterprises occupy a market share of 90%, so the market size of the router industry can be estimated by shipments of the head enterprise router product. In 2015, the market scale of China's router industry was as high as RMB 11.1 billion. From 2015 to 2019, China's router industry benefits from the construction of 4G networks, and the size of the router market increased by 24.8% year. In the second half of 2019, the 5G era opened, and the new round of journey is coming.

Data Source: Public Data Consolidation

Related Report: The "2021-2026 China Router Industry Market Supply and Demand" </ P >

2020 is the first year of the 5G Times, the three major operators have issued a centralized procurement announcement of network equipment, showing the new round of the router's growth cycle. From 2016 to 2021, global IP traffic increased by nearly 3 times. In order to solve the problem of skyrocket of Internet traffic, telecom operators need high-end routers with large throughput and faster data forwarding rates. In addition, the arrival of the IPv6 era will become an opportunity for three major operators to change network equipment. The alternation of new and old network devices will release the market space of the router industry. Under the promotion of these factors, the scale of the router will continue to grow, and it is estimated that by 2024, China's router market will reach 5.7 billion yuan.

Data Source: Public Data Consolidation

Fifth Network equipment manufacturers Cisco expects that from 2016 to 2021, global IP traffic increases by nearly 3 times. By 2021, the global monthly per capita IP traffic increased from 13GB of 2016 to 35GB. From the distribution analysis of IP traffic, the IP traffic generated by the Asia-Pacific region and North America has the most IP traffic in the Middle East and Africa.

On June 6, 2019, the Ministry of Industry and Information Technology issued a 5G license to mark China's official entry of 5G commercial first year. From the consumption to the industry, the interconnection of people from people to people to the object and the interaction of people, the number of connecting equipment will be explosive growth. The outbreak growth of mobile data and the number of connection devices are driven by high-end router markets in the high-end router market in the number of ports.

Data Source: Public Data Consolidation

2, IPv6 is the development trend of IP network, drive operator upgrade device

Currently, China is in IPv4 to IPv6 transition Stage. At the end of 2020, IPv4 addresses are close to the disadvantage, and the IP address lacking in the background of "all things" will lead to network connectivity. At present, the private address translation (NAT) scheme despite the problem of ipv4 public address depletion, but it is no longer able to meet all kinds of emerging Internet applications, and also bring great complexity to the user, network can be controlled control. Spend.

Since 2017, my country's government strongly promotes IPv6 upgrade transformation, and the administrative power to pull the IPv6 industry chain according to the development of IPv6 in accordance with the target development. According to data, my country IPv6 address is 50903 blocks / 32, an increase of 0.1% by the end of 2019.

Data Source: CNNIC status. From the analysis of the global router market competition, Cisco has always maintained the leading position of the industry, but with the rise of Chinese companies, the market share of Cisco routers decreased year by year. In 2019, the global market share of Cisco Routers was 35.4%, down 3.5 percentage points year-on-year. China's router represents enterprises as Huawei, ZTE and Xinhua three, and three companies have significantly improved in the international market. In 2019, Huawei, ZTE and Xinhua San were 33.6% in the total market share of global routers, rose by 2.3 percentage points in 2018.

Data Source: Public Data Consolidation

China Router market concentration is higher. Huawei, ZTE and Xinhua San Basic monopolition China Router market, the total market share of three enterprises is close to 90%, and the remaining market is divided by international giant Cisco and Juniper and other Chinese network equipment manufacturers. China's bonfire communications, Tenda Technology and Maipu Communications and other enterprises produce telecommunications-class routers have competitiveness in low-end markets. The high-end core router market is still from Huawei, ZTE and Xinhua three monopoly.

Data Source: Public Data Consolidation

6 The development of the router industry. It is proposed to explicitly upgrade the network structure, increase the deployment of the cluster router, expand the backbone Internet bandwidth. The state has increased the optimization and improvement of network architecture, which promotes telecom operators, IDC enterprises and other enterprise users to increase network infrastructure of routers, switches, and improve network traffic transmission capabilities, and improve their backbone internet bandwidth capacity. The Internet bandwidth continuously covers rural areas, promoting the purchase needs of the home users to release network infrastructure, and drive the scale of the router industry market.

Data Source: Government Department, Huashang Industry Research Institute organizes

7. China Router Industry Future Development Trend

1, independent research and development router processor

The rate of the router processor chip determines the upper limit of the router throughput, but the router processor chip has difficulty in research and development, high technology barriers, currently only head network equipment manufacturers master the autonomous controlled router processor production process. High-performance router processors will be the continued competitive direction of various routers manufacturers. The router processor development process can be divided into five phases, gradually forwarded from the CPU forwarding to NP, single-core upgrades.

2, IP network intelligent

Ultra-wide, extremely simple, intelligent is the development trend of operators IP networks. Network forwarding technology under the SRV6 Technology IPv6 protocol is a solution to build a smart IP network. SRV6 technology is newly extended on the IPv6 header, and the extension is called SRH (Segment Routing Header). SRV6 uses IPv6 address 128bit's programmable ability to enrich the network feature category of SRV6 instructions. To support a new network function, you only need to define a new instruction without changing the mechanism or deployment of the protocol.

The new generation of intelligent routers are based on SRV6 technology to expand network functions, realize functions such as router intelligent selection, network segmentation and intelligent fault location, and is the main development direction of future routers. The IP network based on SRV6 technology will further achieve intelligent, E-enable IP networks to meet cloud computing, VR and ultra HD video, etc. Vertical application of network cable, low time delay and high reliability. Huawei, Xinhua San and ZTE and other head enterprises have launched routers that support SRV6 technology to promote IP network intelligence.

Huasheng Intelligence Network is affiliated to Huaying Industrial Research Institute, focusing on the industrial economic intelligence and research in Greater China, including the main products and services including traditional and emerging industries, business plan, feasibility study , Market research, special report, custom report, etc. Covering cultural sports, logistics tourism, healthy, biomedicine, energy chemical, equipment manufacturing, automotive electronics, agriculture and forestry, animal husbandry, etc., also studying smart city, intelligent life, intelligence manufacturing, new energy, new materials, new consumption, new Edition fields such as finance, artificial intelligence, "Internet +".

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