YOKNEAM, Israel -- EZchip Semiconductor Ltd. (NASDAQ: EZCH), a leader in high-performance processing solutions for carrier and data center networks, is providing an update on current market dynamics aiming to disrupt the way carrier and data center networks are built and opening new opportunities for EZchip’s processors. The emergence of ‘white box’ systems in carrier and data center networks is expected to change how future networking equipment is sourced. EZchip believes white box systems will open vast new opportunities for off-the-shelf merchant silicon, which may substantially decrease future competition from in-house chip developments. For EZchip, a market leader in merchant network processors (NPUs), the shift unfolding within the networking and data center markets, due to white boxes, as well as the proliferation of SDN and NFV, provides access to new large market segments which were previously held captive by equipment vendors who often opted to use in-house chips.

New network architectures implementing SDN and NFV present a fundamental change across carrier and data center networks and aim to deliver benefits in service agility and revenue generation, operational efficiencies and capex savings. Central to SDN and NFV is the underlying infrastructure which leverages commercial off-the-shelf switching and routing hardware. These ’white boxes’ are typically standard low-cost hardware systems, available from multiple hardware vendors, which rely on operating systems and software applications purchased separately from software vendors or loaded from the open source community, and in some cases augmented by in-house development by the operators themselves. At the core of the white box is a silicon engine driving all data processing and forwarding. For white box routing systems, EZchip’s NPS network processor is emerging as a leading merchant silicon offering for the deployments targeting performance, scale, and features often required in systems for large service provider and data center networks. EZchip’s NPS is well-positioned within the emerging white box, SDN, and NFV markets as a key merchant silicon solution capable of providing data plane layer 2-7 functionality in a single chip.

EZchip’s NPS network processor specifically targets open and software programmable routing platforms as well as the acceleration and scaling of NFV virtual applications to carrier and data center grade. The NPS-400 is scheduled to sample in the fourth quarter of 2015 and the next generation NPS-1000, with more than double the throughput is already in development. Both the NPS-400/1000 are a testament to EZchip’s long-standing commitment to deliver market leading products which support changing market dynamics and are expected to solidify EZchip’s market leading position in the merchant, high-speed, programmable, feature rich, network processor market.

SDN and NFV present operators with the opportunity to reshape the current networking vendor ecosystem, and utilize an increasing number of vendors and solutions. In particular, as network operators embrace the white box model such a model is expected to disrupt the model of current “closed” proprietary solutions provided by a small number of router vendors, and open their networks to an unprecedented diversification of vendors. With many alternatives for both system hardware and software, yet limited offerings of merchant routing silicon, EZchip is potentially poised to see great benefit from the traction of SDN and NFV in carrier, data center, cloud and enterprise networks. Furthermore, the adoption of SDN and NFV holds the potential, over time, to tip the scale towards networking vendors favoring merchant silicon over in-house chips for their proprietary networking equipment. Thereby further increasing the market opportunities for EZchip as a leading supplier of powerful routing silicon for carrier and data centers.

“Already well established in hyperscale data centers, the white-box model is increasing demand for high-end merchant networking silicon,” said Bob Wheeler, principal analyst for networking at The Linley Group. “As service providers adopt this model for routing platforms in the context of NFV, EZchip is uniquely positioned to meet their needs. The NPS-400 provides an unmatched combination of programmability, throughput, and services scale, building on EZchip’s proven and market-leading network-processor technology.”

“The input we consistently receive directly from large service providers and data center operators, as well as the public statements they make, signify they expect that SDN and NFV will become the foundations of their future networks,” said Eli Fruchter, CEO of EZchip. “At the same time, some large data center operators are already leveraging and benefitting from these disruptive market technologies in their deployed servers and switches. The NPS is the common denominator for network’s routing platforms, whether they are white boxes from ODMs or proprietary systems from traditional vendors. We believe that the NPS’s unmatched programmability coupled with its high performance and integration position the NPS to be among the leading merchant silicon for both white box and proprietary systems. We are anticipating a shift in the future sourcing of networking equipment under which, in addition to the traditional equipment vendors, service providers and large data center operators, could also become significant future customers for EZchip. Several of these have already selected the NPS-400 and are waiting for its samples to start their product designs, at which time we hope to transition these engagements towards confirmed design wins. We hope to have better visibility regarding customer engagements, and potentially report future design win traction, shortly after the NPS-400 tapes out during the third quarter, with samples during the fourth quarter. We remain confident that the NPS will allow EZchip to capitalize upon the market dynamics reshaping the networking market and continue to be a leading merchant silicon provider for multiple end markets for many years to come.”

EZchip Technologies Ltd. (Nasdaq: EZCH)