Silicom

Silicom Bets on Post-Quantum Security as Its Next Growth Engine

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Silicom Ltd. has identified post-quantum cryptography (PQC) as one of its next major growth engines, following a new $2 million-per-year design win in the emerging field of quantum-resistant data protection.

During the company’s quarterly earnings call, CEO Liron Eisenman revealed that this is Silicom’s second PQC-related design victory this year. The project involves a smart FPGA-based networking card that integrates SSL acceleration and on-board post-quantum encryption—processing the cryptography directly on the card rather than on the server’s CPU.

Mass deployment of the cards is scheduled to begin in 2026 and is expected to generate around $2 million in annual revenue from this contract alone. “While large-scale quantum computers are still years away,” Eisenman noted, “telecom equipment makers and service providers are already defending against the emerging ‘harvest-now, decrypt-later’ strategy. Having a mature PQC solution gives us a clear competitive edge.”

He added that major enterprises and regulators worldwide are now preparing for the quantum threat: “Quantum attacks could potentially break every encryption standard in use today. Organizations are integrating PQC into their architectures to ensure business continuity once quantum computing becomes available. When that risk turns real, regulators will require a shift to quantum-resistant algorithms—and we’ll be ready to deliver those critical solutions.”

Silicom’s third-quarter 2025 revenue totaled $15.6 million, up from $14.8 million in the same quarter last year. For the first nine months of 2025, revenue reached $45 million, compared with $43.6 million a year earlier.
The company posted a cumulative net loss of $8.9 million for the past three quarters but maintained positive cash flow and stable order momentum.

Eisenman said the two PQC design wins in 2025 lay the foundation for a return to double-digit growth starting in 2026. Silicom’s guidance for the final quarter of 2025 is $15–16 million in sales.

“Our strategic plan targets annual revenue of $150–160 million,” he emphasized. “We’re seeing strong momentum in design wins and a healthy pipeline, and we’re now focused on converting those opportunities into sustained top-line growth—something we expect to become visible from 2026 onward.”

As the cybersecurity world braces for the quantum era, Silicom appears to be positioning itself as one of the first hardware vendors ready to make the leap—from today’s encryption to tomorrow’s quantum-proof communications.

Silicom Continues to Struggle, But Offers Investors Reasons for Optimism

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Silicom, a developer of networking and data infrastructure solutions, released its Q2 2025 earnings and managed to positively surprise the market, despite continuing to post losses. The company reported quarterly revenue of approximately $15 million, a slight increase from $14.5 million in the same quarter last year. However, under GAAP accounting, Silicom recorded a net loss of $3.3 million, compared to a $1.5 million loss last year. On a Non-GAAP basis, the company posted a smaller loss of $2 million.

Despite the uninspiring figures, Silicom’s stock jumped 7.6% on Nasdaq following the report. The likely reason lies in the forward-looking narrative presented by management: the company expects to end 2025 with 7 to 9 design wins—contracts to develop and implement custom technological solutions. Five of those have already been secured in the first half of the year, suggesting positive momentum.

The company also reaffirmed its 2026 targets: revenue of $150–160 million and net earnings of over $3 per share. This would represent a significant leap and double-digit annual growth in sales—a welcome turnaround after two commercially and financially challenging years. Silicom also benefits from strong cash reserves, which provide financial stability and enable continued investment in R&D and marketing, even during periods of losses.

Silicom operates in a market undergoing major transformation: global IT spending continues to rise, especially in cloud, AI, and cybersecurity. However, the composition of spending is shifting—from dedicated hardware to software platforms and managed services—and some traditional clients are delaying telecom infrastructure projects. For companies like Silicom, which provide specialized communication components, this is a challenging period. Design wins thus become a crucial long-term growth engine.

CEO Shay Basso stated that the company still expects double-digit revenue growth in 2026, even if this year’s growth is more modest. “Our design win pipeline has never been more diverse—in terms of customer types, solution categories, industries, and applications,” said Basso. He emphasized that this diversity forms a solid foundation for future growth and strengthens Silicom’s market positioning.

In the last quarter, Silicom announced a significant design win with a U.S.-based enterprise networking client, who will base their solution on Silicom’s new edge device. The project is expected to begin generating revenue by year-end, with an initial annual run rate of $1 million and the potential to scale to several million. Silicom described the deal as strategic, reinforcing its status as a leading technology partner for mission-critical communication applications.

Silicom develops advanced communications and data infrastructure solutions for data centers, cloud environments, and distributed networks. Its product lineup includes high-speed network interface cards, edge devices, FPGA-based acceleration components, and solutions for traffic management and cybersecurity in distributed architectures.

Silicom rides the O-RAN Market

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Photo above: Silicom’s new Dual port 100G Ethernet PCIe Gen 4.0 Server Adapter

Silicom is betting on the Open Networks movement that gains more traction in Telecom wireles infrastructure market, and beleives tha it is responsible for its recent recovery. Silicom’s revenues for the fourth quarter of 2020 totalled $33.9 million, up 33% compared with $25.5 million for the fourth quarter of 2019, and up 19% compared with $28.4 million for the third quarter of 2020.

While remaining cautious due to the continued uncertainty of the macro environment, Management projects revenues of $28 to $29 million for the first quarter of 2021. The midpoint of this range represents approximately 30% growth over the first quarter of 2020.

“The strong quarter was driven primarily by our Smart Platforms and Smart Cards, the focus of our strategy for capitalizing on the industry’s Decoupling and Disaggregation trends'” said Shaike Orbach, Silicom’s President and CEO of Silicom. “These are the trends we foresaw already a few years ago, and for which we have been building our strategy and product lines. Decoupling and Disaggregation trends have become a reality in many market segments, including O-RAN for mobile 5G infrastructure deployments.”

“These trends were the drivers behind our most recent 4G/5G related strategic announcements, our sale of SD-WAN and NFV Smart Platforms to a variety of customers, and our sale of Smart Cards to a significant Cloud player. We feel confident that the Cloud, the Telco market for SD-WAN and NFV solutions, and the overall O-RAN-based mobile infrastructure market will be driving our growth throughout 2021 and beyond.”

O-RAN architecture is about the building a virtualized RAN (Radio Access Network) on open hardware and cloud, with embedded AI-powered radio control. The emerging standard is managed by the O-RAN ALLIANCE, founded in February 2018 by AT&T, China Mobile, Deutsche Telekom, NTT DOCOMO and Orange. Since then, O-RAN ALLIANCE has become a world-wide community of mobile network operators, vendors, and research & academic institutions operating in the Radio Access Network (RAN) industry.