When I am connecting from a NIC card design PHY and to a switch design PHY or equivalent, do I need magnetics on both ends? For any point-to-point ethernet connection, don't the devices on both endpoints require magnetics?
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Yes, you do.
The main purpose of the magnetics (filter + balun) is to prevent the cable acting as an antenna, both out of the cable and into the cable.
If you are talking about connecting chips on the same board, then you can avoid the magnetics (at least for short distances) and couple them using capacitors. But if you are going off-board, you want the magnetics.
The magnetics block DC. Most notably, they allow differences in ground potential ( an amusing concept) to exist between the various nodes.
Unless you *really* know what you are doing, your best bet is to just "go with the flow" and use existing components, technology, layout, etc. This has become *so* ubiquitous that you are unlikely to save much of anything (time, space, cost) and can potentially spend considerable time trying to troubleshoot a high speed *analog* circuit -- and never being quite sure that you *really* have a reliable design.
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