Market Trends of Chile Data Center Networking Industry
Ethernet Switches is Anticipated to be the Largest Segment
- Ethernet switches join wired devices such as computers, Wi-Fi access points, PoE lighting, IoT devices, and servers onto an Ethernet LAN, enabling communication between them and the Internet."
- Ethernet switches have a wide range of applications in industrial infrastructure, including smart grids, security and surveillance, intelligent rail and transportation, and other utilities, which contribute to the growth of the industrial Ethernet switch market.
- In smart grids, Ethernet switches play a pivotal role in substation automation by reducing the effort and complexity of cabling between multiple power transmission and distribution substation devices through integration into Ethernet-based networks.
- The variety of available industrial Ethernet switch products reflects vendors' continuous product expansion beyond traditional 8-port DIN rail switches and application-specific services.
- Smart Ethernet switches with Power-over-Ethernet (PoE) technology are utilized for security and monitoring purposes. These networks transfer power to local network cables and subsequently to connected devices, facilitating Internet protocol-based monitoring systems and providing accessible browser-based communication and user interface.
- The expansion of data centers in Chile is gaining momentum due to the increasing presence of fiber optic cables. For example, in March 2022, the Chilean fiber optic internet provider Mundo announced a USD 200 million investment plan to expand its fiber optic network in the country. This capital will add 6,000 kilometers to its existing 7,000-kilometer fiber network, with plans for an additional 4,000 kilometers in 2023. The amplified investment by providers in expanding telecommunication services is expected to drive the market launch of fiber-based telecommunications data services
Understand The Key Trends Shaping This Market
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IT & Telecommunication is Anticipated to be Fastest Growing Segment
- The ICT sector includes both the IT market and the telecommunications market. IT investments are increasing, and ICT market demand is expected to increase significantly over the next five years. Due to the increasing need for research and implementation of digital technologies and initiatives, the overall increase in demand for digitalization and the increase in the development of IT infrastructure, the widespread deployment of 5G networks, and the increasing penetration of technology investments. , the growth of Chile's ICT market has been significantly boosted.
- The rising demand for computation and storage to support high-end applications has led to hyperscale data centers becoming extremely powerful in recent years. Data centers are becoming more complicated due to the growing number of business-critical apps. The increasing use of the web, e-commerce, social media, cloud computing, and online gaming is making it important to increase application speed, energy efficiency, and server density of data centers. The increasing data traffic volume is boosting the demand for hyperscale colocation services.
- Chile is one of the markets in Latin America to experience the highest levels of cloud activity. The government's growing investments support the development of various technologies, including 5G, AI, IoT, machine learning, and Big Data. The expansion of the Chilean ICT market is also anticipated to be fueled by the rise of digital transformation. For instance, the cloud service provider, Google Cloud Platform (GCP), revealed incremental information about its cloud regions in Santiago (Chile).
- According to ITU, internet penetration in Chile is expected to increase steadily from last year until 2026. According to the study, the country's internet penetration rate increased from 86.7% last year. Furthermore, Chile's internet penetration rate is expected to increase by 88.8% by 2026. Increased internet penetration will open up new growth opportunities for Chile's ICT market.
- The deployment of 5G networks will contribute to economic growth, improve national competitiveness, attract investment, support innovation, and drive productivity gains in various sectors. Therefore, in order to promote economic development and remain competitive at the global level, emphasis is placed in Chile on expanding its 5G infrastructure. For example, the Chilean government launched in May 2022 a new strategy, "Chile Digital 2035," to reduce inequality and accelerate the country's digital transformation.
