Foxconn for specialized network appliances.

Corning for critical network hardware components.

• Network Interface Cards (NICs): High-performance server adapters offering advanced features like multiple ports, bypass functionality, and specialized offloading capabilities for networking applications.
• Network Appliances (uCPE/SD-WAN): Customizable, white-box hardware platforms designed for network virtualization, edge computing, and software-defined wide area network (SD-WAN) deployments.
• Intelligent Bypass Switches: Hardware devices that provide network reliability by automatically routing traffic around failed in-line security or network appliances, preventing network downtime.
• FPGA-based Solutions: Specialized network cards and appliances incorporating Field-Programmable Gate Arrays (FPGAs) to deliver high-speed data processing, low-latency acceleration, and custom network logic.

Silicom (SILC) Major Customers

Described Major Customers (as of 2023 10-K):

• Customer A: A Fortune 500 company in the networking and communications industry, accounting for approximately 32.7% of Silicom's revenues in 2023. (This customer also accounted for approximately 35.5% in 2022 and 25.4% in 2021).
• Customer B: A major US software company, accounting for approximately 17.5% of Silicom's revenues in 2023.

In prior years, another significant customer was identified:

• Customer C: A Fortune 500 company in the security and communications industry, accounted for approximately 16.5% of revenues in 2022 (and 18.0% in 2021). This customer did not account for more than 10% of revenues in 2023.

Due to Silicom's non-disclosure of the specific names of these major customers in its public filings, their names and stock symbols (if public) cannot be identified.

Liron Eizenman, President & Chief Executive Officer

Liron Eizenman was appointed President and Chief Executive Officer of Silicom Ltd. on July 1, 2022, succeeding Shaike Orbach. He joined Silicom in 2015, initially serving as the Chief Executive Officer of the company's North American subsidiary, and later as Chief Operating Officer. Mr. Eizenman holds an undergraduate degree from The Academic College of Tel-Aviv-Yaffo.

Eran Gilad, Chief Financial Officer & Company Secretary

Eran Gilad has served as Silicom Ltd.'s Chief Financial Officer and Company Secretary since 2012. Prior to his role at Silicom, he was an Independent Director at On Track Innovations Ltd. from 2019 to 2020. Mr. Gilad earned both his undergraduate and graduate degrees from Tel-Aviv University.

Avi Eizenman, Co-Founder & Chairman

Avi Eizenman co-founded Silicom Ltd. in 1987 and has served as its Chairman since 2001. His past experience includes roles as an Independent Director at Ceragon Networks Ltd., Head of Electronic Research & Development Department at Israel Ministry of Defense, and Head of ASIC Department at Scitex Ltd. Mr. Eizenman holds an MBA from Tel-Aviv University and an undergraduate degree from Technion-Israel Institute of Technology.

Shaike Orbach, Executive Vice Chairman

Shaike Orbach previously served as the President and CEO of Silicom Ltd. for 21 years before Liron Eizenman assumed the role in July 2022, transitioning to Executive Vice Chairman. His professional background includes positions as General Manager at Edusoft Ltd., President & Chief Executive Officer at Opgal Ltd., and Managing Director at Tecsys Ltd. Mr. Orbach received his undergraduate degree from Technion-Israel Institute of Technology.

David Castiel, Vice President of Engineering

David Castiel holds the position of Vice President of Engineering at Silicom Ltd.

The accelerating trend of vertical integration by major technology companies, particularly hyperscalers, large telecom operators, and cloud service providers, into designing and producing their own custom networking hardware, including SmartNICs/DPUs and specialized appliances. This shift reduces reliance on third-party OEM suppliers like Silicom for components and integrated solutions, as these large customers opt to build in-house or leverage highly integrated solutions from major chip vendors.

The addressable markets for Silicom's main products and services are identified as follows:

• Network Interface Cards (NICs): The global Network Interface Card market size was USD 5.1245 billion in 2024. North America held over 40% of the global revenue for NICs, with a market size of USD 2.0498 billion in 2024.
• Network Security Appliances: The global network security appliances market size was valued at USD 16.7 billion in 2024. North America held approximately 40% of this global market share in 2024.
• Intelligent and Programmable Networking Solutions (including SD-WAN, SASE, NFV, Edge Devices):
  • The global intelligent network market size was estimated at USD 4.24 billion in 2023. North America dominated this market with a 33.0% share in 2023.
  • The global programmable network market is estimated to be USD 4.5 billion in 2024. North America leads this market.
  • The global network automation market size is estimated at USD 31.02 billion in 2025. North America is the largest market for network automation.

Silicom (SILC) anticipates several key drivers for its future revenue growth over the next two to three years:

1. Ramp-up of Existing Design Wins: The company expects revenue growth from 2025 onwards to be significantly propelled by the ramp-up of long-term design wins already secured in SD-WAN and SASE markets. This also includes the sale of additional Edge systems to telecommunications companies and service providers.

2. Conversion of a Robust Pipeline of New Design Wins: Silicom maintains a substantial pipeline of potential design wins for its server adapter and Edge products with prominent networking, security, and service providers. The company has set an aggressive target of achieving seven to nine new design wins in 2026 across all product lines, including FPGAs, Edge solutions, and SmartNICs, which are expected to drive sustainable long-term value creation.

3. Expansion into Emerging Technologies and Markets: Silicom is strategically investing in and focusing on new high-growth areas. These include AI and security hardware solutions, with design wins in AI infrastructure and post-quantum security. The company has secured Post-Quantum Cryptography-related wins, positioning itself as a leader in these advanced technology solutions. Additionally, edge computing and advanced networking solutions are key focus areas.

4. Increased Demand in Cloud and Data Center Environments: Silicom's products, which are designed to enhance performance and efficiency in cloud and data center environments, are utilized by major cloud players, service providers, telcos, and OEMs as integral components of their infrastructure offerings. The company's solutions are critical for increasing throughput, decreasing latency, and boosting the performance of servers and networking appliances, which form the backbone of advanced cloud architectures.

Share Repurchases

• Silicom's Board of Directors authorized a new one-year share buyback plan for up to $15 million in May 2024, set to commence after the completion of the previous plan.
• In 2024, the company allocated approximately $10 million to repurchase around 650,000 shares. During the first half of 2024, approximately $6.6 million was invested to repurchase about 410,000 ordinary shares.
• The company executed share buybacks of almost $10 million in both fiscal year 2023 and fiscal year 2024. Actual repurchases totaled $16.77 million in 2020, $14.29 million in 2021, and $10.66 million in 2024.

Share Issuance

• In June 2024, shareholders approved the issuance of Restricted Stock Units and options under the company's Global Share Incentive Plan.

Capital Expenditures

• Capital expenditures on property and equipment for the year ended December 31, 2019, were US$1,635 thousand, which represented a decrease mainly due to reduced investment in production and research and development equipment.