Breakthrough for Silicom: New Design Win with $17m Orders

21 March, 2017

A a top-10 Cloud player ordered a highly customized version of Silicom's 100-Gigabit switch fabric. Revenues related to this design win will build to more than $30 million per year

Silicom’s shares today in NASDAQ

Silicom Ltd. from KFAR SAVA, Israel achieved the most significant design win in its history. This design win, from a top-10 Cloud player, is for a highly customized version of Silicom’s 100-Gigabit high bandwidth switch fabric on a NIC cloud solution. Based on this design win, Silicom has received initial purchase orders in the aggregate amount of $17 million to cover a small-volume Alpha phase, an intensive Beta program and the product’s first commercial deployment.

Based on the customer’s guidance, Silicom forecasts that revenues related to the design win will build to more than $30 million per year. Following the announcement, Silicom’s shares price in NASDAQ jumped by more than 16%, from $38.7 to approximately $45.2, giving the company a total value of $1.52 billion.

Silicom revealed it has completed deliveries for the Alpha phase, and is now in the process of delivering the Beta-program products. Now it works to finalize the product configuration and validating the solution’s performance within the servers in which the products will be deployed, in cooperation with a Tier-1 server manufacturer. The company is also in a process of ramping up product manufacturing to a full mass-production level.

“We are very excited to have received what we believe will become the largest Design Win in our history,” said Shaike Orbach, Silicom’s President & CEO. “This achievement has the potential of being a game-changer for Silicom. While, due to the complexity of the product and its cutting edge technology, there remain challenges that we must overcome before large-scale data center commercial deployment can be assured, we believe we are on the right track for a successful conclusion.”

“This groundbreaking design win is a clear demonstration of the success of our Cloud strategy, the cornerstone of our approach to appropriately address the industry’s transition to Cloud-based solutions. Our success demonstrates the power and urgency of the Cloud transformation, together with the superb fit of our unique connectivity products for the industry’s needs. The combination of strong market needs and our demonstrated competitive edge gives us confidence about our future prospects.”

Silicom provides high-performance networking and data infrastructure solutions to improve the performance of networking appliances and server-based systems. Its product portfolio includes multi-port 1/10/25/40/100 Gigabit Ethernet server adapters, Intelligent Bypass solutions, Encryption accelerators, Ultra Low Latency solutions, Time Stamping and other innovative Smart adapters.

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