EZChip to benefit from Verizon capital spending

By Marc Castro

Oct 20, 2013 09:47 AM EDT

The second largest chipmaker in Israel, EZchip Semiconductor Ltd, jumped to its one month high on prospects that the company would benefit from the projected capital spending of Verizon Communications Inc.

The shares of the developer increased by 2.1% for this week, reaching USD25.64 per share.

Last October 17, Verizon Communications announced it would be spending on capital goods at a budget worth USD16.6 billion. When carriers spend more, this would increase EZchip's revenue. This was confirmed by the company's CFO Dror Israel in an interview last Sept 17 from the company's headquarters in Yokneam, israel. 

The increased spending from Verizon would happen in the fourth quarter of the year as Verizon continues its 'fixing cities' program through upgrades in its wireless infrastructure. This was confirmed by Verizon CFO Fran Shammo during an earnings conference call. The program entails refitting its wireless network to a faster phase of long term evolution or the so-called LTE system in areas where network performance has been hampered by increased user traffic.

© 2024 VCPOST, All rights reserved. Do not reproduce without permission.

Join the Conversation

Real Time Analytics