PCIe Switch Chips Market Forecast: USD 2.52 Billion by 2031 with 12.7% CAGR Growth

Pune, India: September 12, 2025 – The global PCIe (PCI Express) switch chips market is on track for robust growth over the coming years. According to a new report from QYResearch titled “Global PCIe Switch Chips Market Share and Ranking, Overall Sales and Demand Forecast 2025-2031” the market was valued around USD 1.12 billion in 2024 and is projected to reach approximately USD 2.52 billion by 2031, reflecting a double-digit compound annual growth rate (CAGR) of about 12.7% during the forecast period 2025-2031.This strong expansion underscores booming demand for high-bandwidth, low-latency connectivity solutions across data centers and emerging technology applications.

Market Dominated by Major Players

The PCIe switch chip industry remains highly consolidated, with a few key players capturing the bulk of global revenue. Broadcom Inc. and Microchip Technology are identified as the leading manufacturers of PCIe switch chips worldwide. In 2024, the top three companies – led by Broadcom and Microchip – collectively accounted for well over four-fifths of the market’s revenue. This concentration of ~84–90% market share among the leading vendors highlights significant barriers to entry and the importance of continuous innovation for any aspiring competitors in this space.

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PCIe 3.0 and Server Segments Lead the Market

By product generation, PCIe 3.0-based switch chips currently form the largest segment, accounting for about 51.1% of the market. This reflects the still-widespread use of third-generation PCI Express technology in many systems. Newer standards like PCIe 4.0 and 5.0 are gaining ground, but Gen3 devices continue to see broad adoption due to their established ecosystem and cost-effectiveness.

In terms of end-use applications, servers represent the single largest application segment for PCIe switch chips, comprising roughly 52.9% of total demand. This dominance underscores that data center and enterprise servers are the primary consumers of PCIe switch chips, as these chips enable efficient scaling of PCIe lanes for multiple processors, SSDs, and accelerator cards within server architectures. Other applications – such as storage devices (SSDs) and emerging uses in industrial, automotive, and edge computing – make up the remainder of the market. These segment trends are expected to evolve going forward as adoption of newer PCIe generations increases and use cases diversify.

Key Market Drivers

Advancement of PCIe Standards: The continuous evolution of the PCI Express standard (with PCIe 4.0, 5.0, and the upcoming 6.0 generations) is a major growth catalyst. Each new generation delivers higher bandwidth and lower latency, enabling greater data throughput and system expansion. As these newer PCIe standards become mainstream in computing and networking equipment, demand rises for switch chips that support them. Vendors capable of delivering switches compatible with the latest PCIe 5.0/6.0 speeds are positioned to benefit as upgrades roll out across servers, storage, and peripherals, driving the market forward.

Emerging High-Bandwidth Applications: Beyond traditional data centers, PCIe switch chips are increasingly being deployed in diverse, high-growth tech domains. Smart manufacturing systems, autonomous vehicles, and Internet of Things (IoT) infrastructure all require ultra-fast, low-latency data interconnects for real-time processing. PCIe switch technology offers a proven solution for these needs, allowing multiple components (sensors, controllers, accelerators) to communicate efficiently. The expansion of such applications is broadening the addressable market for PCIe switch chips and fueling additional demand in the coming years.

Market Challenges

Rapid Technological Change: The PCIe switch chip industry faces pressure to innovate continually in step with new standards. Next-generation PCIe 5.0 and 6.0 specifications demand significant improvements in chip performance, power efficiency, and stability. However, developing and commercializing cutting-edge switch silicon is costly and uncertain. Companies that fall behind the technology curve risk seeing their products fail to meet evolving market requirements, resulting in lost market share. The fast pace of PCIe advancements thus poses a challenge – firms must invest heavily in R&D just to keep up, making sustained innovation capability a key success factor.

Macro-Sensitive Demand: The broad market demand for PCIe switch chips is tightly linked to macroeconomic and technological cycles. Major end-use markets like data centers, 5G infrastructure, and AI computing can fluctuate with global economic conditions and capital investment trends. A global economic slowdown or pullback in IT spending could soften data center expansion plans, directly reducing demand for interconnect chips. Likewise, if technological transitions accelerate (for example, if entirely new interconnect paradigms emerge or if cloud architectures change rapidly), it could dampen the expected deployment of current PCIe switch solutions. These factors introduce uncertainty and could temper the industry’s growth trajectory compared to optimistic forecasts.

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Growth Opportunities

With the deepening of digital transformation across industries, the global data center boom is accelerating. In fact, worldwide demand for data center capacity is “surging to record levels,” driven by cloud computing and AI expansion. This trend is creating unprecedented opportunities for high-performance interconnect technologies. As a key enabler of high-bandwidth, low-latency internal communication within servers and storage systems, PCIe switch chips are poised to ride this wave of expansion. In modern hyperscale and cloud data centers, these switch chips serve as critical components that link multiple servers, GPUs, and storage devices, ensuring efficient data flow and scaling. By providing fast, switchable PCIe lanes between countless devices, they significantly boost overall system throughput and help meet the exploding data processing demand.

Industry analysts see this infrastructure build-out as a major growth avenue for PCIe switch chip suppliers in the coming decade. Companies that can deliver reliable, high-port-count PCIe switches for next-generation data centers stand to capitalize on the need for ever-faster connectivity in AI and Big Data workloads. In summary, the push toward larger and more advanced data centers – alongside emerging uses in edge computing and advanced automotive systems – represents a bright opportunity horizon for the PCIe switch chip market.

About the Author

Julie Zhang is a key industry analyst at QYResearch (Beijing Hengzhou Bozhi International Information Consulting Co., Ltd.). She specializes in market research and trend forecasting across the entire upstream and downstream value chain of the electric vehicle and lithium battery industries. Zhang is known for providing strategic market insights through in-depth data mining and analysis, with a focus on emerging trends and technological innovations in the automotive and energy storage sectors. This approach helps companies navigate highly competitive markets and achieve sustainable success.

Julie's research portfolio covers a diverse range of high-tech fields. She has led in-depth studies on topics such as Electronic Fusing ICs, EV skateboard platforms, electric vehicle controllers, automotive interior monitoring systems, automotive PCIe switch chips, end-to-end automotive software platforms, LiFSI electrolyte salts, portable power supplies, outdoor mobile power solutions, and solar energy storage batteries, among others. Her comprehensive industry knowledge and forward-looking analysis make her a valuable resource for understanding the intersection of electronics, automotive technology, and new energy trends.

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About QYResearch

QYResearch is a leading global market research and consulting company founded in California, USA in 2007. With over 17 years of experience and professional research teams in multiple countries, QYResearch provides a broad range of services including management consulting, database and seminar services, IPO consulting, industry chain research, and customized market studies. The firm’s research and data are widely cited in corporate prospectuses, annual reports, and presentations, underscoring its reputation for quality and credibility.

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