Nov 2014
NPUs for Smart Networks
1
Safe Harbor Statement
This presentation contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements are statements that are not historical facts
and may include financial projections and estimates and their underlying assumptions,
statements regarding plans, objectives and expectations with respect to future operations,
products and services, and statements regarding future performance. These statements are
only predictions based on EZchip's current expectations and projections about future events
based on its current knowledge. There are important factors that could cause EZchip's
actual results, level of activity, performance or achievements to differ materially from the
results, level of activity, performance or achievements expressed or implied by the forwardlooking statements. Those factors include, but are not limited to, the impact of general
economic conditions, competitive products (including in-house customer developed
products), product demand and market acceptance risks, customer order cancellations,
reliance on key strategic alliances, fluctuations in operating results, delays in development of
highly-complex products and other factors indicated in EZchip's filings with the Securities
and Exchange Commission (SEC). For more details, refer to EZchip's SEC filings and the
amendments thereto, including its Annual Report on Form 20-F filed on March 27, 2014 and
its Current Reports on Form 6-K. EZchip undertakes no obligation to update forward-looking
statements to reflect subsequent occurring events or circumstances, or to changes in our
expectations, except as may be required by law.
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EZchip Overview
q
Fabless semiconductor company, NASDAQ listed (EZCH)
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Leading provider of processors for carrier and data center networks
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NPUs (Network Processors)
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Many-core CPUs
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Intelligent NICs and appliances
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EZchip is a strategic supplier of NPUs to the top routing vendors and the
highest placed and fastest growing NPU vendor
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Developing the NPS, the most powerful NPU for carrier edge routers, datacenter appliances and white-box solutions
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Following the Tilera acquisition, developing the Tile-Mx, the highest core count
many-core CPU with EZchip's networking accelerators
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Founded in 1999; 280 employees, over 200 in R&D
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Global offices in Israel (HQ); San Jose, CA; Boston, MA; and China
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Strong financial model; $223M in cash, no debt
3
Tilera Acquisition Highlights
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Leapfrogs EZchip into the fast-growing multi-core CPU market
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Combined with NPS, increases EZchip's TAM six fold to $2.2 billion
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Broadens EZchip’s customer base with additional Tilera customers
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Diversifies EZchip's product lines with the addition of 9, 16, 36 and 72 multicore CPUs and a family of smart network interface cards and white-box
appliances
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Leverages technologies and expertise from EZchip and Tilera to build the
world’s most powerful next generation family of multicore processors
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Strengthens EZchip’s US presence in sales, marketing, R&D and operations, in
both Silicon Valley and Boston
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EZchip’s TAM
2013
Actual
2017
Forecast
Network Processors (NP, NPS)
$339M
$0.5B
EZchip’s NPU Revenues (including Marvell)
$107M
Many-core Processors (NPS, Tile-Gx, Tile-Mx)
NA
$1.3B
Smart NICs and Appliances
NA
$0.4B
EZchip’s Total TAM
$339M
$2.2B
EZchip’s NPU Revenues (including Marvell)
$107M
Tilera acquisition increases EZchip’s TAM six fold by 2017
Sources: Infonetics Research, The Linley Group and EZchip, July. 2014
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TILE-Gx: Comprehensive Family of
Processing Solutions
TILE-Gx
TILEncore-Gx
TILEextreme-Gx
Many-core
Processors
Intelligent
Network Adapters
Appliances
9-72 CPU cores
9-72 CPU cores
Up to 288 CPU cores
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TILE-Gx Technology: Fundamentals
Performance-per-Watt
Optimized
Homogenous array of
General Purpose cores
Coherent
iMesh
Tightly Coupled IO and
Accelerators
Standards Based
Programming
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EZchip Processors and Roadmap
Carrier Edge & Data Center
ü Layers 2-7
ü C-Programmable
ü Data plane NPU
Carrier Edge
ü Layers 2-3
ü Microcode programmable
Data Center & Cloud
ü Enhanced many-core arch.
ü Network processing acceleration
ü Data & Control planes CPU
Data Center
ü Many-core architecture
ü Power efficient
2012
2013
2014
2015
2016
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Markets & Applications
Carrier Routers
Data Center
Appliances
NFV & SDN
Acceleration
Enterprise
Routers
& Video
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The Carrier Ethernet Market
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Edge routing is currently our main market
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Typically 4-8 chips per line card, 40-80 chips per edge router
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NP-5 enables 1-Terabit line cards, NPS enables 2-Terabit
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The leading edge routing vendors are EZchip’s customers
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Competition is mainly in-house ASIC designs
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Growth Trends in Edge Routing
EZ
More EZchip based platforms at our customers
Sales
More EZchip based platforms in the market
EZ
EZ
EZ
EZ
EZ
EZ
EZ
EZ
EZ
EZ
EZ
customer platforms
VS.
EZ
EZ
EZ
EZ
EZ
EZ
More line cards vs. chassis shipments
NPS
Higher ASPs (from NP-3 to 4 to 5 to NPS)
NP-4
NP-5
NP-3
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EZchip is #1 in NPU Market Share
EZchip
100%
Intel
PMC
90%
7.0%
4.0%
6.0%
3.0%
5.0%
80%
17.0%
10.0%
70%
11.0%
16.0%
15.0%
9.0%
60%
50%
LSI
Others
5.0%
5.0%
5.0%
6.0%
5.0%
5.0%
14.0%
14.0%
17.0%
16.0%
40%
30%
35.0%
37.0%
Marvell
29.0%
8.0%
3.0%
27.0%
Broadcom
6.7%
6.6%
8.8%
7.9%
7.4%
8.8%
15.3%
14.1%
15.8%
15.6%
AMCC
15.4%
22.6%
70%
20%
10%
11.0%
14.0%
19.0%
22.0%
23.4%
31.6%
0%
2008
2009
2010
2011
Source: The Linley Group, Communications Semiconductor Market Share and EZchip, July 2014
*In 2012, Others includes AppliedMicro, Exar (Hifn), Mindspeed, Netronome and Vitesse. EZchip includes Marvell.
*In 2013, Others includes AppliedMicro and Netronome. EZchip includes Marvell.
2012
of High
Speed
NPUs
2013
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NPS: Leapfrogs the Competition
For next gen L2-7 edge routers
• Leapfrogs merchant & in-house NPUs with L2-7 & C-programmability
For next gen cloud architectures
• Leapfrogs multi-core CPUs with 10x performance
Strongly differentiated technology
•
•
•
•
Faster & smaller C-programmable processing cores
256 processors, 4096 virtual processors on one chip
Large set of algorithmic accelerations
Market leading traffic management technology
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NPS: Revolution Over Evolution
“If the NPS delivers on its promise, EZchip will separate its technology
from that of all merchant competitors.
It will also affect OEMs’ make-versus-buy decisions. Router vendors will
have to choose either to evolve an existing L3 NPU design to remove some
limitations, invest in a wholly new architecture, or adopt EZchip’s NPS. In
our view, the evolutionary approach will be unable to keep up with
carriers’ requirements”
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EZchip’s Major Customers
100%
90%
80%
70%
60%
50%
40%
30
38
10
11
40
10%
20
27
13
15
17
19
43
39
2012
2013
27
33
20
24
30%
20%
27
9
Others
ZTE
Juniper
Cisco
38
0%
2010
2011
9M/2014
Revenues from Cisco, ZTE and Others grew YoY in 9M 2014
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Non-GAAP Operating Model
2010
2011
2012
2013
9M 2014
Revenues
$62M
$63.5M
$54.7M
$70.9M
$61.6M
Gross Margin
75.2%
77.9%
83.9%
83.4%
81.8%
OPEX
$17.4M
$20.1M
$21.3M
$25.6M
$21.9M
Operating Margin
47%
46%
45%
47%
46%
Net Margin
49%
49%
49%
50%
48%
EPS
$1.14
$1.09
$0.92
$1.18
$0.96
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Cash $223M, no debt (Sep 30, 2014)
Note: Values are non-GAAP.
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Summary
Market
Customers
EZchip is the NPU market
share leader
The top edge routing
vendors use EZchip’s NPUs
Revenues
Technology
Growing with the NP & Gx
lines; expected to accelerate
with NPS and Tile-Mx
NPS and Tile-Mx are highly
differentiated nextgen
processors for networks
TAM
Financials
6X increase (2017) with the
NPS and Tilera acquisition
Strong operating model, high
profitability and cash
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