Networking Hardware Prices Rise as AI Demand Tightens
The 15% growth in sector revenue masks significant supply-side pressure that is driving up switch costs for enterprise buyers.
Updated on Oct. 30, 2026 in Data Centers
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Global enterprise networking revenue rose 15% year over year in 2026, driven by high demand for AI infrastructure and security upgrades. This growth comes alongside a 19% increase in average campus switch selling prices as memory chip shortages constrain supply.
Why it matters
The surge in AI-related infrastructure spending is competing with traditional network needs for limited silicon. This resource squeeze is creating significant financial pressure on manufacturers and IT departments, threatening to slow down long-term hardware refresh cycles.
Enterprise networking revenue grew 15% year over year, while average selling prices for campus switches saw a 19% increase. These costs are mounting as 93% of fixed-wireless access vendors report being impacted by inflationary supply pressures.
The details
The price hikes are largely attributed to the rapid expansion of AI, which is consuming a disproportionate share of global memory chip supplies. When memory chip scarcity limits component availability, vendors are forced to pass increased manufacturing costs directly to the market. These physical constraints on semiconductor fabrication are effectively tightening supply chains across all networking hardware segments.
Timeline
2026: Worldwide enterprise networking revenue experienced 15 percent year-over-year growth.
The Tech Race
This revenue spike highlights a race where AI infrastructure demands now command the primary share of global component supply. The trend forces a divergence between companies prioritizing massive AI clusters and those attempting to maintain standard enterprise network refreshes.
IT procurement teams should anticipate sustained higher costs for campus switches and other hardware through at least the remainder of the year. Budget planning may require longer replacement cycles as businesses adjust to the 19% increase in average switch pricing.
The takeaway
The confluence of AI demand and component scarcity is making network infrastructure significantly more expensive. IT leaders should monitor future quarterly component availability reports to determine when or if supply-driven price volatility begins to stabilize.
Further reading
For broader trends regarding physical infrastructure, see our latest coverage on Data Centers.
Source note: This article includes information reported by SC Media.
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