INTERCONNECTS

Foundry Networks(R), Inc. announced that it has increased market share and extended market leadership in the high performance networking markets of 10 Gigabit Ethernet (10GbE) and Gigabit Over Copper network connectivity. These market share gains occurred as a result of global growth and key vertical market customer wins in healthcare, education, government, finance and media/entertainment. "Industrywide, Gigabit Ethernet sales increased 24 percent sequentially and are quickly expected to surpass the $1.5 billion mark," said Joshua Johnson, industry analyst at Synergy Research Group. "This is creating demand for 10 Gigabit Ethernet uplinks, which, combined with price cuts, spurred 112 percent sequential revenue growth. What's more, these trends are indicative of a recovery in Enterprise IT spending." A number of application and market drivers for Gigabit copper range from server consolidation to 10 Gigabit Ethernet transport of multiple terabytes of traffic per second during peak demand, roughly equivalent to hundreds of thousands of simultaneous streaming DVD sessions. Dell'Oro Group researchers noted that Foundry is the number one market share leader for Layer 3 Modular Gigabit Ethernet ports to date in 2003. During the third quarter of 2003, Foundry also notched a number one market share position in Layer 3 10GbE modular network by holding 65 percent of the quarterly market. In overall 10GbE (Layer 2 and Layer 3) market Foundry now owns 41 percent of the market space in Q3 compared to 36 percent of the 10GbE markets for second-place Cisco Systems. According to Dell'Oro Group, Gigabit Ethernet port shipments worldwide grew almost 40 percent during the most recent quarter, with Gigabit-Ethernet-over-Copper accounting for all of this increase. Port shipments in this segment grew sequentially by almost one million ports, as vendors introduced high-density low-priced switches designed for networking desktop PCs. Despite the impressive increase in Gigabit Ethernet port shipments during third quarter of 2003, Fast Ethernet port shipments also saw strong quarter-over-quarter growth. Strong Industry Growth Predicted for 10 Gigabit Ethernet "The strongest growth in the Layer 2/3 switching market right now is in 10GbE," says Neil Osipuk, an analyst with Infonetics Research Inc. "Even though the volumes are still relatively low, it's an important market to watch over the next 12 months." According to Infonetics, Foundry surpassed Cisco for the top spot with 45 percent of the market in the third quarter, both in terms of ports shipped and revenues. The market has grown 77 percent since the first quarter of this year, according to Infonetics. Revenues jumped from $13 million in the first quarter to $23 million in the third quarter. Infonetics predicts that the technology will generate $82 million by the end of the year. While this is minor compared to the expanding Ethernet market, which is expected to total $11.8 billion by year's end, it is still strong growth.