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Silicom's Promising Growth DriversAugust 22, 2011 | Comments : 0 Recommended this article: (0)
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Silicom’s Promising Growth Drivers
The strong trends in rising internet traffic, cloud computing and virtualization that are developing within the information technology market offer Silicom several unique opportunities to dramatically increase revenues.
These external developments strongly escalate Silicom’s customer’s network appliances needs for WAN optimization, internet security and application delivery.
While total global monthly internet traffic is expected to be 4x greater in 2015 than it was in 2010, the Company estimates that the WAN optimization, internet security and application delivery markets are growing at an average of 20 percent per year.
These solid external growth engines combined with internal growth engines such as the company’s increasing sales of SETAC (Server To Appliance Converter) and SETAC based network appliance products, as well as the staged launch of additional new products, has the potential to push the Company’s revenues to a $100 million per year run rate in the long-term.
What’s more, the SETAC product family, not only permits Silicom to address new market segments, but also allows the Company to obtain nearly unlimited potential with its existing customer base of 75 OEM businesses that include market leaders within target segments.
Along the same lines, the growth in demand from existing and new customers has led to four design wins during the past twelve months that are expected to ramp up gradually, generating approximately $6.5 million in new revenue per year.
Furthermore, while orders for SETAC products were placed throughout 2010, more recently in May 2011, (SILC) announced it achieved two important design wins for SETAC derivative models that are expected to total approximately $3 million in new sales per year.
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