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EZchip (EZCH -2.1%) slumps after Value Bulldog makes a short case on Seeking Alpha Pro. The...

EZchip (EZCH -2.1%) slumps after Value Bulldog makes a short case on Seeking Alpha Pro. The author questions EZchip's low R&D and sales spending, and notes the company has often let down analysts forecasting major sales growth. Concerns are also raised about the addressable market for high-speed network processors (NPUs), competition from Broadcom's (BRCM) BCM88030 NPU, and the fact Alcatel-Lucent and Juniper are relying on their own edge router NPUs (though market leader Cisco remains a big EZchip buyer).
Comments (6)
  • Admdr5
    , contributor
    Comments (7) | Send Message
     
    BRCM ch is has no traffic manger in it and is not at the edge but in transport. Furthermore, again does anyone think all that software investments by these companies is going to be just thrown out to change vendors. Also, the amout of ports on the chip are paramount. Np-5 with traffic manager soon to be released by EZCH, same speed 200 and with traffic manager.
    17 Dec 2012, 06:20 PM Reply Like
  • Admdr5
    , contributor
    Comments (7) | Send Message
     
    ZTE, Telllabs, Huawei, and Ericsson use EZCH. Brcm and Mrvl do not compete with Ezch. With software involved EZCH would be very hard to replace, so competition is not exactly as mentioned. The above represent 70% of the market in high speed NPU. The NPU-4 all is being used in servers and the cloud. Np-5 and NPS which covers all 7 layers are on their way. Np-5 is 200 and already on board at the above companies. Ciena and other companies use EZCH. Alot of misinformation in the above article. If growth occurs as per Linley, the stock price would not seem to be expensive. This is a short trying to cover. Also ASR 9000 ASR 1000 and ASR 5000 at CSCO have EZCH inside. I would cover short.
    18 Dec 2012, 01:58 AM Reply Like
  • Admdr5
    , contributor
    Comments (7) | Send Message
     
    EZCH is high speed NPU, they know who the potential costumers are, so the amount spent on sales is negligible and not important. As for analysts, they beat last two of the last three quarters. Sales are lumpy and the stock price is based on the world needing high speed internet. Video and data are growing exponenially. Global Ip traffic will grow threefold over the next five years according to Cisco. EZCh is also used in the clound for servers. Do you really think CSCO, TLAB, ZTE, ERIC and Huawei and others are going to give up their invesments in software for BRCM and MRVL which are not even in the same markets today. I doubt it.
    18 Dec 2012, 01:58 AM Reply Like
  • User 224408
    , contributor
    Comment (1) | Send Message
     
    Not much truth to this story. Biggest threat to EZ are the in-house ASCICS- NP being developed and EZ has readily acknowledge this fact. The technological gap EZ has on BRCM and others has been greatly extended by their new designs of the new NPS where they continue to dominate levels 2-3 and bring Levels 4-7 into play. I think you shorts may be in trouble.
    18 Dec 2012, 02:04 AM Reply Like
  • Admdr5
    , contributor
    Comments (7) | Send Message
     
    Huawei, Eric, Zte, Tlab ,Cisco all EZCH Tier 1 customers.
    JNPR and Alu old news. EZCH in, ASR 9000, ASR 5000 and ASR 1000 from Cisco. Cien ,Patel Alto customers among others. NPS new chip being developed for the cloud covers all 7 layers. Video and Data expected to rise three fold by 2016 as per Cisco. Linley expects huge increases in high speed by 2015. Np-4 rollout just beginning at most tier 1.
    18 Dec 2012, 02:10 AM Reply Like
  • Admdr5
    , contributor
    Comments (7) | Send Message
     
    http://seekingalpha.co...
    21 Dec 2012, 12:57 PM Reply Like
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