Another advantage of Silicon One is its control over the supply chain, added Cisco CFO Mark Patterson. Cisco develops the product completely itself and thereby reduces external delivery bottlenecks. “Developing our own silicon gives us significantly more control from start to finish,” said Patterson. “We manage wafers, substrates, assembly and testing directly ourselves and therefore have significantly more control over the supply chain.”
Regarding the storage shortage, which is an industry-wide problem, Patterson explained that there are “more than 20 programs that we have launched that are actively working to reduce storage consumption across the portfolio.”
He cited the wireless sector as an example of this: “In the fourth quarter you will be able to order products that actually require 50 percent less memory.” Cisco is also continuing to invest in new capacities, including through a three-year supply agreement with DRAM provider Nanya.
Growth in the bread and butter business
Cisco’s classic network business also continues to develop positively. Robbins said orders for enterprise data center switching were up more than 40 percent year-over-year. This area achieved double-digit growth rates in seven of the last nine quarters.
“We believe demand for AI infrastructure in the enterprise environment continues to grow. Nexus Switch orders for AI deployments increased nearly 50 percent sequentially in the third quarter,” Robbins emphasized. “In campus networking, we experienced record orders with more than 25 percent year-over-year growth. Demand for our new generation of switching, routing and wireless products is exceptionally strong and growing faster than previous product introductions.”
A recent study of around 3,500 IT managers worldwide also confirmed the increasing urgency of modernizing campus and branch networks. With network traffic expected to increase threefold in the next three years due to AI, Robbins said 93 percent of respondents are accelerating their modernization plans.
