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SILC: Design Wins Add Up at Silicom

By Ken Nagy, CFA

On August 12, 2013, Silicom Ltd (SILC), the provider of high-performance server and appliances networking solutions, reported that it has been awarded two Design Wins from a new customer in the rapidly growing Traffic Management and Policy Enforcement Industry.

The Design Wins are within a market segment that continues to experience exponential growth, in the traffic management and policy enforcement industry and revenues from these Design Wins are expected
  to reach approximately $1 million per year. 

The wins are for a specialized internal BYPASS solution, a product that will replace another solution currently provided by one of Silicom’s competitors, and for Silicom’s unique external Intelligent BYPASS Switch (IBS). 

BYPASS solutions are used to assure the continued flow of network traffic if its in-line appliances should experience failure, and Silicom’s BYPASS solutions help customers achieve the highest performance possible of these mission critical applications. In addition, Silicom’s unique Intelligent Bypass switch (IBS) is able to independently sense a failure and to initiate the Bypass process, thereby facilitating an exceedingly simple integration of an external BYPASS solution into the network.

The customer is currently discussing the use of another, higher-end solution that could, if adopted, increases its business with the Company significantly to a level of several million dollars per year.

Silicom engages in the design, manufacture, marketing, and support of connectivity solutions for a range of servers and server based systems. The firm has several growth engines including Information Technology’s return to growth, the march to 10GB per second technology, a large and growing base of OEM customers includes most of the market-leading players, staged launch of new products, and a strong OEM business model which limits operating expenses. SETAC, the firms newly patented Server to Appliance Converter, which combines the best of standard servers with hardware appliances should allow the firm to push its revenues to the $100 million level in coming years.

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