Ceragon’s 5th generation System-on-a-Chip is taping out soon and it is truly revolutionary. It promises to deliver service providers immense, exclusive, never-before capabilities and benefits. Watch Doron Arazi, Ceragon’s new CEO talk about the new chip, and why the company continues to invest in developing its own technology and chipsets.
Full interview transcript:
Hi, everyone, and welcome to the Backhaul Lounge. My name is Gil Gabay and I'm the vice president of strategy and business development for Ceragon. And today, we are very excited to have Ceragon's CEO, actually new CEO, Doron Arazi. Hi Doron.
Hi Gil, Great to see you again.
It's great to see you also. And you're actually not a newcomer to Ceragon.
No, I'm not. I've been spending six, almost six good years of my life working for Ceragon as a CFO and as a deputy CEO.
That's great. That's great. And it's great to have you back. So today, I want to talk a little bit about one of our key differentiators. One of Ceragon's key differentiators is really our continuous investment in technology, specifically chip development. So can you talk a little bit about that?
Yeah, first of all, this is not a new strategy for Ceragon. It has been there for many years now. And I think this is probably One of the big, differentiation between Ceragon and its competitors. It's a very unique approach. And I think the main advantages that we saw in this approach is the fact that, first of all, by that we can enable vertical integration. Secondly, in most of the cases, the company was able to be ahead of the curve with new technology and with new products coming to the market because of the control it had over manufacturing or developing. And manufacturing the chips, which is a great opportunity to capture market share. And beyond that, our knowledge in our specific addressable market is so huge and we have so much information about what the customer really needs, that we can actually turn that into additional advantage where we put some of the unique capabilities into our chip and by that are providing better products to our customer.
Excellent. So we've built some of our key insights actually into, into the chip. That's great to hear. So but this time around, we developed an SoC - a system on Chip. So can you talk a little bit about the rationale behind that decision?
Yeah, first of all, I think that this is a very natural evolution, yet a very courageous and I would say visionary approach. All of us who are in the what I would call a hardware industry providing equipment to the telco industry know how difficult it is to turn technology into a product that is working and meeting the specs. Manufacturing is not an easy, is not an easy thing. And one of the biggest challenges as a hardware company we are dealing with is our operational efficiency and by putting much more elements into the chip, we create an opportunity to be more effective and to reduce our cost significantly. And beyond that, we can also improve our time to market and why it is so? First of all, let's take it as an example, the current situation in the component markets. If the less component you have to deal with, the higher chances you can continue with your manufacturing flawlessly, despite any challenges in the component market.
So that's one example. The other example is the commonality. We at Ceragon believe that providing with different solutions and kind of being one stop shop for our customers is critical to serve our customer best. With the System-on-a-Chip where you can serve basically a frequency starting from hundreds of megahertz and all the way up to a four gigahertz on one chip. It creates a huge advantage, very high flexibility, in terms of giving what the customer actually needs and yet keeps costs and time to market in a very reasonable and fast way and obviously, in terms of inventory, which is also a big challenge in our markets. We can reduce our inventory significantly and by that improve our gross margins.
So all together, I truly believe that this is a new stage of taking the silicone concept to the next level for our industry and by that having a better, I would say, ingredients to compete in the market.
Right, so, so that's very exciting and these are very great benefits of having a System-on-a-Chip. Now, as we said, we are going to tape out that fifth-generation chips that very soon. But when you look forward, what, what are our plans looking forward, in terms of chip development?
So as I said at the beginning, first of all, this is Ceragon legacy, it's not something new. I think this was one of the anchor elements in Ceragon strategy that drove its success so far. And I think it's there to stay. And I would say even beyond that, one of my thoughts coming back to the CEO seat is to look and see whether there is an opportunity to leverage those great capabilities that we have accumulated. Going beyond just a chipset that serves our needs in our particular market.
Ok, thank you, Doron, thanks for your time. Thanks, everyone, for joining us and make sure to check us out on LinkedIn, on Twitter and on Facebook and meet our global experts. Until the next time.
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