The Memory Crunch Pinches Cisco’s Profits

It has taken many years for the AI boom to reach the general ledgers and balance sheets of the world’s largest original equipment manufacturers, and one might say that it has taken particularly long for Cisco Systems, the dominant supplier of switching and routing in the enterprise and traditional telco/service provider spaces as well as a respectable systems supplier with over 90,000 customers using its UCS converged server-switch platforms.

But Cisco has been playing a very long game under chief executive officer Chuck Robbins, starting with rearchitecting and unifying its switch and router ASICs with the Silicon One chips, which it uses in its own gear and which it also makes available as merchant silicon that hyperscalers and cloud builders can acquire and use in their own whitebox gear. The acquisition of Acacia Communications back in 2021 for $4.5 billion also gives Cisco the optical transceivers that appeal to the hyperscalers and cloud builders that are driving the…