| JERUSALEM, Sept 11
JERUSALEM, Sept 11 Israel-based chip designer
Mellanox Technologies, whose share price has risen
sharply over the past year, has been approached several times by
potential buyers, its chairman and chief executive said, adding
he wanted to remain independent.
"As long as we think we can grow faster than the company we
can merge into, the return on investment will be better to our
shareholders, we will stay independent," Eyal Waldman told
Reuters at the High-Tech Industry Association conference.
"Once we think our growth rate will be similar or slower to
a company we merge into, we may decide otherwise," he said on
Software maker Oracle Corp has a 10 percent stake
in Mellanox and Waldman said he has a "gentleman's agreement"
with the U.S. company's CEO, Larry Ellison, that it would not
raise its stake. Fidelity owns 14 percent of Mellanox.
"We have a very good feeling about the momentum, the design
wins, the applications, the market share we are taking," Waldman
said. "We think we are going to continue growing for a long
time, we can grow to over $1 billion in revenue in the future,"
he said, declining to give a time frame for his forecast.
Mellanox makes InfiniBand products that allows databases,
servers and computers to talk with one another. It has more than
85 percent of that market, which competes with another
interconnect technology called Ethernet where the company is a
It is forecast to record revenue of $532.5 million this year
and $665 million next year, according to Thomson Reuters
While the company has estimated third-quarter revenue will
more than double to $150-$155 million, Waldman declined to give
a forecast beyond that.
Mellanox stock quadrupled in value over 12 months to hit
$120.05 last week. It has since fallen back, and was down 0.5
percent on the day to $101.11 at 1520 GMT.
Deutsche Bank analyst Dan Harverd said last week, as he
initiated coverage of Mellanox with a "buy" rating and $140
price target, that InfiniBand was becoming increasingly
important in data centres to remove bottlenecks.
"It is no coincidence that Mellanox's growth rate
accelerated in the quarter immediately following the launch of
Intel's new super-fast server platform, Romley," Harverd said.
Intel's Romley platform has led to high demand for
Mellanox's interconnect products. While Intel is a major client
for Mellanox in the InfiniBand sector, it is also its only
competitor, having acquired four companies in the field.
Waldman said real competition in InfiniBand was at least
three years down the road.
"Mellanox is also not just sitting quietly. We are also
executing and I think will come out with solutions that may be
better than what Intel is coming out with," he said.