Bloomberg News

EZchip Slumps on Concern Cisco Processor Will Rival Own Product

September 12, 2013

EZchip Semiconductor Ltd. (EZCH:US) tumbled to a four-month low in New York on concern Cisco Systems Inc. (CSCO:US) will develop the Israeli chipmaker’s technology in-house, reducing revenue growth.

Shares of the Yokneam, Israel-based company slumped 22 percent to $23.99 at 10:52 a.m. in New York, with trading volumes 21 times the daily average over the past 90 days.

Cisco, the biggest maker of networking equipment, said today that it will develop its own nPower integrated network processor. EZchip received (EZCH:US) about 40 percent of its revenue from Cisco, according to data compiled by Bloomberg. The product will compete with EZchip’s product, said Jay Srivatsa, an analyst Chardan Capital Markets LLC.

Cisco’s processor “looks to compete with EZchip’s own solution,” Srivatsa said by phone from New York today. “The reality is that the platform for Cisco’s next-generation solutions incorporate EZchip’s products. However, it could affect products down the line.”

To contact the reporter on this story: Matthew Kanterman in New York at mkanterman2@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • EZCH
    (EZchip Semiconductor Ltd)
    • $25.0 USD
    • -0.98
    • -3.92%
  • CSCO
    (Cisco Systems Inc)
    • $25.97 USD
    • 0.14
    • 0.54%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus