Future-proofing networks with Cisco Silicon One - Six Five On The Road

What if the very silicon powering your network could fundamentally transform your enterprise, from AI to campus access?

At Cisco Live! 2025, Patrick Moorhead and Daniel Newman host an essential conversation with Martin Lund, EVP, Common Hardware Group at Cisco. They discuss how Cisco's expansive silicon strategy is not just shaping the future of technology, but actively redefining enterprise networking and delivering immense customer value.

Key takeaways include:

🔹Cisco's Silicon Advantage: They tackle the common misconception that Cisco isn't a major silicon player. Martin Lund clarifies how Cisco's unique, single architecture approach offers distinct advantages over competitors and provides benefits for enterprises.

🔹The Power of Cisco Silicon: Discover the tangible impact of Cisco's silicon on the company's Q3 earnings. They highlight how Cisco's silicon technologies have been significantly boosted by the current momentum in AI infrastructure orders.

🔹Silicon One Revolutionizes Campus Access: They unpack recent announcements in the Silicon One portfolio. Discover the profound implications for Cisco's overall networking strategy and beyond.

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Disclaimer: Six Five On The Road is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded, and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors, and we ask that you do not treat us as such.

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Patrick Moorhead: The Six Five is On The Road here in San Diego. Not Las Vegas, here at Cisco Live 2025. It has been about AI connectivity, security and pulling it all together.

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Daniel Newman: Yeah, Pat, it's good to be here. And I'm glad you actually said AI and then kind of listed the other things out because I just feel like so often on the show it's like it's all about AI, AI. And that's kind of what the last two and a half years have been. This show has been really about that whole stack. Yeah. And that's been really refreshing and you know, a lot of, a lot of security content, a lot of network content. And Pat, for us chip guys.

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Patrick Moorhead: I mean, listen, we both thought semiconductors were cool even before other people thought they were cool. We've probably been talking on the pod. I mean I may have worked for a silicon company.

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Daniel Newman: Nobody would know that. Yeah, no, never tell anybody about your jobs.

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Patrick Moorhead: I mean I pretty much do. It's what I ride on. But no, let's dive in here. There's a lot, I mean I haven't heard silicon talked about more at a Cisco event than this. I mean literally Chuck gets up, boom, it's silicon, Jeetu gets up silicon. And even Chuck and Jeetu saying hey, if you see Martin, see. But who is this Martin guy? Well, let me introduce Martin. Great to see you.

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Martin Lund: Thank you.

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Patrick Moorhead: And it'd be one thing to say welcome to be on the Pod for the first time, but we have met before. You have been the POD out at MWC with an unnamed other company. But it's great to see you here.

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Martin Lund: Likewise. That was fun.

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Patrick Moorhead: No, it really was.

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Daniel Newman: We know people move around the industry, but I think actually that was one of the most iconic Six Five episodes ever because then CEO Pat Gelsinger ran out. It was a group of different companies. We won't disclose anything about where you were, where you weren't. But he came out and bear hugged me from the back when we were actually in the middle of recording and I jumped out of my chair because I thought I was going to. You know, I thought I was being beaten up. I had no idea what was going on. So you were a part of history and by the way, that clip everywhere. But let's talk a little bit about semiconductors, Silicon and what patches, you know, really queued up is this show for the first time. I mean we both remember going to the big silicon one launch in 2019 and thinking what a moment for Cisco. Here we are, 2025 and it's been a bit of a quieter period, but it's been something that's still been very much focused, very much part of the DNA of many of your products. But now it's kind of having another renaissance, another coming out party. Talk a little bit about how Cisco's just thinking about its Silicon strategy and why now is the time to kind of get loud about its semiconductor and silicon strategy.

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Martin Lund: Absolutely, yeah. I know it's exciting times at Cisco when it comes to Silicon and for me it's super exciting to be here to see. Now a lot of the products that are being rolled out are fueled by Silicon One. We have had quite a bit of activity since 19 with different product lines and different generations rolling out in production had some really good impact in the hyperscaler space as well as some more on the service provider side of the house. Now we're seeing the whole family of the breadth of portfolio being introducing new products that are based on Silicon One. And it brings a lot of benefits to customers in different areas. And remember, it's not just one chip like Silicon One does not mean it's one, it's many, but it's one underlying architecture. A little bit like x86 is an underlying architecture for lots of things. A laptop, you have a server and so forth. And we have an architecture that underpins what we do, that gives us benefit, but also gives our customer benefits. And I think what we see at the end of the day comes down to can you control your innovation path or do you have to have to ask somebody to build this for you? Silicon is the underpinning for networking. You have to run it in silicon because the data rates and the latency requirements are so intense that you cannot do it just in software. Like it just doesn't work. So what we do is, and what we have announced here is that we are fusing security into the network. In order to do that you have to control that underlying architecture.

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Patrick Moorhead: Yes. So a lot of the time there's a debate that's as long as semiconductors, which is you need unique architectures for specific things. And in the networking area there's been different architectures for routing and switching. What are the end customer benefits to having a unified architecture that does both?

Martin Lund: Well, I believe that having it together is that you don't have to make a choice. It means that you're not sacrificing between I like it to be fast or I want it to be, you know, I want it to be slow and intelligent. Yeah, you're not making these choices and the other really important thing is that as we are progressing our architecture, it's moving along in one way. Others may be having three different architectures that they have to. So over time innovation can suffer. And I think the end user benefits that we deliver is that we had a quote from Swisscom that said that they were, with our new silicon solutions and systems based on it, that they were able to reduce the overall power consumption in the network by up to 90%. I think it was 80% because we're just doing more with much, much less silicon. So it's a density game. There's one more thing that's super critical to Silicon One is the programmability. And what does that mean? Well, it means that you don't have to forklift upgrade your network if you're a service provider, for example, and you need to have segment routing V6 because that's an important thing.

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Daniel Newman: Right.

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Martin Lund: You have to buy new gear or can you get a software load that adds this new capability?

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Daniel Newman: So Martin, Cisco has gotten loud about A.I. You know, maybe there was a little bit of a slow burn coming in and now it's very clear what you're doing there. On the chip side, on the semi side, there's still a bit of like, you know, is Cisco a semi company? You clearly believe it is and you're building it. But I mean what is the kind of key in your mind now that you know, you've been leading the efforts here to break out? Because you know when you hear about a network, you might hear the name like a Broadcom or you'll hear about the kind of upstart companies like the, you know, Astera in networking, you know, and they're coming up and they're doing different things. But you've been doing this a while. And so at least me and Pat, I think both as analysts, you know, we both think there's a bigger opportunity for everyone out there that's listening is like kind of what's the big key to Cisco getting that credit? Because you're getting it now in AI, you're getting it in security. It's time to get it in the chip space. 

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Martin Lund: Yeah, but at the same time, because it's a good question, right? Should we think of ourselves as yes, we are a large fabless semiconductor company inside, but so is Apple. What Apple is doing is that they're building vertically integrated solutions that they're co optimizing the system's performance. And in networking we are heading that path because you have to co package optics with silicon, with systems, liquid cooling, all this comes together. It's really, really hard to build. And if you are just a fabless semiconductor company, you don't have the other pieces. Those are critical elements. Like, we have the optics, we have the silicon, and we have the systems expertise. And that is where the only other company that really has that level of chops right now, it's Nvidia. They're focused on compute, we're focused on networking.

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Patrick Moorhead: Yeah. I think a lot of people were surprised when they saw the earnings announcement that talks about how you participate in the hyperscaler market. A lot of custom work there. And I remember when Silicon One was announced, the thought was, okay, we're going to get a part of this. We might not sell the entire switch. We might sell the chip. We might sell different innovations there. I'm curious, Q3 earnings showed hyperscaler growth. What part was Silicon of that? What was the role that silicon plays with the hyperscalers?

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Martin Lund: Yeah, I think so. First of all, I like to say it. With hyperscalers, it's a very demanding customer base. And you can. It's like going to final exams every day, except that you can fail, but you cannot pass.

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Patrick Moorhead: Right.

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Martin Lund: Okay. And they expect execution and they expect an incredible level of excellence. And if you meet the bar, you have an opportunity to participate in the business. You have an opportunity. It's not guaranteed.

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Patrick Moorhead: Right.

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Martin Lund: What we are doing is that we are meeting the bar. I believe, and I believe that we are getting afforded opportunities to participate. And then now we have to prove to them that our solutions have benefits to them. But we are in the game. And I've been doing business with hyperscalers before they were called hyperscalers. I've been around for a long time, and I have a good sense for why they are so important. They run things at scale and they push the limits. We would not be in that game if we didn't have silicon, because we would just be another wrapper. If you're familiar with the wrapper, just wrap something around. A Broadcom chip doesn't really add a lot of value.

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Patrick Moorhead: I think I know a couple companies who do that.

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Martin Lund: Yeah.

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Daniel Newman: He's wisely listening to his comms people and biting his tongue.

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Martin Lund: I mean, these are. These are customers. I was at Broadcom, as you know, many times, many years ago, and these are all customers. It's a fine thing and there's value to be had. However, in the game we're in right now, where you have to innovate at all systems and optics and silicon at the same time. It's hard to do if you don't have all the ingredients.

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Daniel Newman: Sure, that completely makes sense. So you know, we hit a little bit on kind of the external perception. We hit a little bit about how you've gone up the stack and of course all the way to the hyperscalers, which are that really difficult, sensitive customer. But another massive opportunity is enterprises. It's a big but kind of slower moving infra build out. They're sort of getting adapted to this next era of compute you've been supporting. Cisco's been supporting their compute architecture for a long time. With both networking at different times. Compute as well. Now AI brings something completely new. You seem to be their partnership with Nvidia to meet the moment. Now you've got Silicon One powering campus access. Talk a little bit about kind of what that announcement means and kind of what's the significance there and how broad of a customer spectrum is SiliconOne prepared to support.

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Martin Lund: All of it?

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Daniel Newman: All right, good answer. Thank you for joining us.

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Martin Lund: And here is a benefit because it's a single architecture, meaning that all the learnings we get around AI from our engagement with hyperscalers and I call them baby scalers, but new clouds and those next level down and large enterprises, all of that learning is applicable to the rest of the portfolio where you now will start to see small models on different places. I think of AI networking a little bit like the old VoIP. People are like, oh, what do you mean? Well, latency sensitive, loss intolerant. Right. Really annoying, difficult stuff to put on your network. It's just on steroids, it's just like a thousand million times worse because it's high performance. VoIP was low. Very few packets here and there. This is latency high performance traffic that's going to get on your network. And your network needs to be modern, it needs to be ready for it. Because you have no idea when these agents start to talk to each other and do work. I mean it's not like they go home, right? Or go for coffee. They work all the time.

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Daniel Newman: I love that.

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Patrick Moorhead: Me too. Let's get some agents.

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Daniel Newman: I want agents.

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Martin Lund: Yep, you just have to feed them tokens or do they make tokens? I don't know which one it is.

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Daniel Newman: I think it's both.

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Martin Lund: Yeah, I think so too.

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Daniel Newman: In tokens, in tokens, out. So, you know, kind of wrapping up here, Martin, you know, obviously we're both, we're all, all of us are kind of excited about the chip space so we could sit and talk about this all day. But what are you sort of walking away just more broadly with Cisco? Are you sort of excited, you know, about any of the announcements, anything that took place? Are you kind of. Of course the Silicon One is going to be close to your heart, but what are you kind of most excited about?

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Martin Lund: I think, I think there's just so much good stuff that's rolling out right now and I think I feel it's like, see, I'm sort of, I'm a technologist at heart. I love to see Cisco being back, which in my mind, sort of technology leadership announcing stuff that the world hasn't seen before, like the AI Canvas demo that was shown. That's awesome. Can you imagine? We have that now. I am so excited about that. I think I'm so proud of a lot of the new products we have rolled out. I know you saw the water cooling demo we have on the floor, but when you get out there, you will see it. I mean, this is like it's next level and the next level is right around the corner.

Daniel Newman: Well, it's been amazing to watch the development, like I said, past several months. I think the word payload gets used a lot around here.

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Patrick Moorhead: Used a lot.

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Daniel Newman: The announcement payload, the amount of innovation and the progress that's been made. I know you could track either Pat and I's social accounts and you'll see that we were pretty declarative that, you know, Cisco has made massive strides. It's turning a corner and it's going from kind of being, you know, what are they doing to like, it's very clear and it's breaking through. So congratulations, Martin. We look forward to, you know, continuing to follow your journey with Silicon One and of course, the journey of Cisco.

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Martin Lund: Thank you so much.

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Daniel Newman: Thanks. And thank you everybody for being part here of The Six Five On The Road at Cisco live in beautiful sunny San Diego, CA. Hit Subscribe. Be part of our community. We appreciate you tuning in, but we got to say goodbye for this one. We'll see you all later.

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