real-time news and commentary for investors
Thursday, Sep 12
Cisco announces new network processor, EZchip tumbles
- Cisco (CSCO +0.2%) asserts its nPower X1 network processor (NPU) delivers 400Gbps of throughput (matching ALU's oft-praised FP3), and was "purpose-built" for software-defined networking (an unmatched level of programmability is promised). (PR)
- EZchip (EZCH -22.4%) investors aren't taking the news well. Cisco is the NPU developer's top client, and strong sales of Cisco's ASR 9000 edge router (uses EZchip's NP-3/NP-4 processors) have done wonders for EZchip's top line. Cisco's announcement raises the possibility the X1 will be used in the ASR 9000's successor.
- EZchip disclosed on its Q2 CC Cisco accounted for 46% of its quarterly revenue. Sales to the networking giant rose 55% Q/Q and 33% Y/Y, and were forecast to "grow significantly" Y/Y in 2013.
- Benchmark is defending EZchip after talking with CEO Eli Fruchter. Fruchter: "To the best of our knowledge, Cisco will use the [240Gbps] NP-5 in all key platforms that use the NP-4 today."
- While many rivals increasingly rely on 3rd-party NPUs (from EZchip, Broadcom, Cavium, etc) Cisco continues to invest heavily in developing proprietary ASICs to differentiate certain switch/router lines.