Smart move of the week: Cavium inks distribution deal with Avnet

Cavium Networks has inked a distribution deal with Avnet Memec, a division of Avnet Electronics Marketing Americas and Avnet Inc., that will see its security and MIPS-based single and multi-core processors distributed in the Americas.

The move is a smart one for Cavium, which has grown by leaps and bounds in recent months. The Mountain View, Calif.-based company just announced pricing for its IPO in May and partnered with Intel in June on optimized security and application oriented networking reference designs. Just last week, the company announced Q2 revenue of $12.7 million, a 14 percent sequential increase from the $11.1 million reported for Q1 and an increase of 56 percent from the $8.1 million reported for Q2 2006.

Lehman Brothers estimates that about 30 percent of Cavium’s sales have been through distribution, largely in Asia. Today’s deal with Avnet, the industry’s largest distributor, should extend an opportunity to Cavium in the Americas.

The agreement specifically addresses Cavium’s OCTEON Multi-core MIPS64 processor family and NITROX security processor family, winner of a 2003 Microprocessor Report analysts’ choice awards, and is also a good move for Avnet. The products augment to the distributor’s embedded processor strategy and add to its offerings in the high-performance networking and secure data transmission applications spaces.

Avnet also inked a deal with Samsung this week to distribute its flash memory, DRAM, SRAM, logic, hard drives and LCD displays throughout North America. Avnet is already authorized to distribute Samsung memory and displays in Europe.

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