With a total addressable market size of approximately $10.6 billion 1 forecasted in 2021, the Ethernet segment represents a highly attractive growth opportunity for the Company. We began investing in R&D efforts related to Ethernet technology in 2013. The Ethernet design wins we are now seeing across our product suite are the rewards of our focus on innovation through R&D and investing in the future. This focused investment strategy has enabled us to outpace our competitors since 2010, with Mellanox now being the leader in innovative end-to-end solutions for connecting servers and storage platforms, holding the #1 or #2 position in many of the key markets in which we operate.In fiscal 2017, the Company made significant strategic investments to complete its data center-focused portfolio. Specifically:
- Improving InfiniBand competitive strength in AI and HPC markets through InfiniBand 200Gb/s generation, to be introduced shortly;
- Developing the BlueField family of products from our EZchip acquisition, which provides Mellanox access to a $2 billion addressable system-on-a-chip (SoC) market 2; and
- Increasing the deployment of Spectrum Ethernet Switch platforms.
Mellanox is, and Will Continue to Be, a Growth StoryMellanox has been executing on our growth strategy, and we are delivering positive results. The tremendous growth and success we have achieved is a culmination of years of carefully planned investment, as well as a direct result of our Board and management team's extensive expertise and dedication to research and development. We are seeing significant design wins across our product suite, penetrating key markets and building traction with customers. The value we have created over the past two quarters is the result of the widespread adoption of 25Gb+ technology in every major market around the world - a trend for which Mellanox has long anticipated and planned. In short, our R&D strategy is working and proven in our financial results. Cost cuts can drive profitability in the short term, but they can also stifle innovation and growth and have limited upside over the long term, particularly if they are undertaken to meet specific operating margin targets and not with a view towards sustainable value creation. Growth takes vision, time, investment, expertise and patience - but the upside is significant and more sustainable than financial engineering. That is the true long-term value we are creating at Mellanox for all shareholders. New Independent Directors Further Enhance Our Diverse, Highly-Qualified Board Committed to Shareholder Value Creation Mellanox has a diverse and experienced Board that is actively engaged in overseeing the execution of our strategy to continue to increase revenue, expand market share and improve our operating margins. Our Board is composed of 11 highly qualified and experienced directors, nine of whom are independent and all of whom are seasoned leaders committed to driving shareholder value. Notably, our Board recently welcomed two new, independent directors, Steve Sanghi and Umesh Padval, concluding our search that began last year to fill two vacant board seats. As CEO of Microchip since 1991, Steve has established himself as one of the best operators in the semiconductor industry with a proven ability to drive profitable growth and value creation. Since joining the board of Integrated Device Technology in 2008, Umesh has seen significant operating margin expansion and stock price appreciation, resulting in over 5x market cap growth during his tenure. Each is a skilled and deeply knowledgeable leader who brings new perspectives and extensive semiconductor industry knowledge to our team. We are confident that their leadership abilities will be invaluable to Mellanox as we continue to execute on our strategic plan. The EGM Will Ensure That Your Voice Will Be Heard Rushing into an AGM with our existing voting policies puts our company, shareholders and progress at risk. Mellanox, like many Israel-domiciled corporations, does not have articles of association that provide for a fair and transparent contested election. The unintended consequences of rushing into an AGM without first solving for the majority vote standard and establishing a universal proxy card could be exploited at the expense of Mellanox and its shareholders. This year's EGM was scheduled on approximately the same timeline as our 2017 uncontested AGM. In light of the requirement to hold the EGM first, the AGM has been pushed out. Following the EGM, we intend to immediately begin the process of scheduling the AGM, which we anticipate holding on July 25, 2018, in accordance with the Israeli Companies Law and Mellanox's articles of association.
The Mellanox Board of Directors will be sending you proxy materials shortly so that you can vote to approve these best-in-class governance proposals: establishing plurality voting and requiring the use of universal proxy cards in the event of contested elections. Preliminary copies of the proxy materials have been filed with the U.S. Securities and Exchange Commission and are publicly available on our website at ir.mellanox.com/financials.cfm.The Mellanox Board is committed to building and protecting your investment by holding the EGM promptly and taking the steps necessary to align our governance policies with your interests and ensure that the composition of our Board fairly reflects shareholders' intentions. On behalf of your Board of Directors, thank you for your continued support. Sincerely, Irwin Federman Chairman of the Board Eyal Waldman President, CEO and Director About Mellanox Mellanox Technologies (NASDAQ: MLNX) is a leading supplier of end-to-end InfiniBand and Ethernet smart interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software and silicon that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. More information is available at: www.mellanox.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 All statements included or incorporated by reference in this Current Report, other than statements or characterizations of historical fact, are forward-looking statements, including the Company's outlook for the three months ending March 31, 2018 and the full fiscal year ending December 31, 2018, statements related to trends in the market for the Company's solutions and services, opportunities for the Company in the fiscal year ending December 31, 2018 and beyond, and future product capabilities. These forward-looking statements are based on the Company's current expectations, estimates and projections about the Company's industry and business, management's beliefs and certain assumptions made by the Company, all of which are subject to change.
Forward-looking statements can often be identified by words such as "projects," "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause the Company's actual results to differ materially and adversely from those expressed in any forward-looking statement. The risks and uncertainties that could cause the Company's results to differ materially from those expressed or implied by such forward-looking statements include the continued expansion of the Company's product line, customer base and the total available market of the Company's products, the continued growth in demand for the Company's products, the continued, increased demand for industry standards-based technology, the Company's ability to react to trends and challenges in its business and the markets in which it operates, the Company's ability to anticipate market needs or develop new or enhanced products to meet those needs, the adoption rate of the Company's products, the Company's ability to establish and maintain successful relationships with its OEM partners, the Company's ability to effectively compete in its industry, fluctuations in demand, sales cycles and prices for the Company's products and services, the Company's success converting design wins to revenue-generating product shipments, the continued launch and volume ramp of large customer sales opportunities, the Company's ability to protect its intellectual property rights, the Company's ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses, the Company's success in realizing the anticipated benefits of mergers and acquisitions, and the Company's ability to obtain debt at competitive rates or in sufficient amounts in order to fund its contractual commitments. Furthermore, the majority of the Company's quarterly revenues are derived from customer orders received and fulfilled in the same quarterly period. The Company has limited visibility into actual end-user demand as such demand impacts the Company and its OEM customer inventory balances in any given quarter. Consequently, this introduces risk and uncertainty into the Company's revenue and production forecasts and business planning and could negatively impact its financial results. In addition, current uncertainty in the global economic environment poses a risk to the overall economy as businesses may defer purchases in response to tighter credit conditions, changing overall demand for the Company's products, and negative financial news. Consequently, the Company's results could differ materially from its prior results due to these general economic and market conditions, political events and other risks and uncertainties described more fully in the Company's documents filed with or furnished to the Securities and Exchange Commission (the "SEC").
More information about the risks, uncertainties and assumptions that may impact our business is set forth in the Company's annual report on Form 10-K filed with the SEC on February 16, 2018. All forward-looking statements in this letter to shareholders, including the outlook for the three months ending March 31, 2018 and the full fiscal year ending December 31, 2018, are based on information available to the Company as of the date hereof, and the Company assumes no obligation to update these forward-looking statements.Important Additional Information and Where You Can Find It The Company and certain of its directors and executive officers may be deemed to be participants in a solicitation of proxies in connection with the matters to be considered at the EGM and the 2018 AGM. Information regarding the names of the Company's directors and executive officers and their respective interests in the Company by security holdings or otherwise is set forth in the Company's preliminary proxy statement filed with the SEC on March 7, 2018 and reports filed by the Company and Forms 3 and Forms 4 filed by the Company's executive officers and directors with the SEC after March 7, 2018. These documents are available free of charge at the SEC's website at www.sec.gov. Additional information regarding the identity of participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the Company's proxy statements for its EGM and its 2018 AGM, including the schedules and appendices thereto. The Company intends to furnish its definitive proxy statements and WHITE proxy cards for the EGM and the 2018 AGM to each shareholder entitled to delivery of a proxy, and intends to file such definitive proxy statements and WHITE proxy cards with the SEC. THE COMPANY URGES ITS SHAREHOLDERS TO CAREFULLY READ SUCH DEFINITIVE PROXY STATEMENTS (INCLUDING ANY SUPPLEMENTS OR AMENDMENTS THERETO), ACCOMPANYING WHITE PROXY CARDS AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Copies of the definitive proxy statements, any solicitation materials and any other documents filed by the Company with the SEC will be made available free of charge at the SEC's website at www.sec.gov. These documents will also be made available free of charge on the Company's website at www.mellanox.com or by contacting the Company's proxy solicitor, Mackenzie Partners, Inc. at firstname.lastname@example.org. 1 Crehan Research, Linley Group, LightCounting; Switches and Adapters 2 Infonetics Research: The Linley Group and EZchip, July 2014