Raging Capital Urges Shareholders Not to Allow Mellanox to Capture All the Upside of EZchip in Proposed Merger

Issues Open Letter to Shareholders Noting Additional Major Data Center Wins That EZchip May Be Downplaying in Order to Push Through Merger Vote

ROCKY HILL, New Jersey, Nov. 6, 2015 /PRNewswire/ -- Raging Capital Management, LLC ("Raging Capital"), one of the largest shareholders of EZchip Semiconductor Ltd. (NASDAQ: EZCH) ("EZchip") owning approximately 6.7% of the ordinary shares outstanding, issued a letter to EZchip shareholders today highlighting a key disclosure that EZchip may be downplaying in its effort to obtain shareholder approval of the $25.50 per share buyout offer from Mellanox Technologies, Ltd. (NASDAQ: MLNX).

The full text of the letter follows:

November 6, 2015

Dear Fellow Shareholders:

Raging Capital Management, LLC continues to urge shareholders of EZchip Semiconductor Ltd. ("EZchip" or the "Company") not to be fooled by EZchip's assertions that the proposed merger with Mellanox Technologies, Ltd. ("Mellanox") provides "compelling" value to shareholders. As we have conveyed to you in prior letters, EZchip is a great company with significant growth potential and Mellanox is poised to reap the significant upside of EZchip if the merger is approved. This is why we believe EZchip is downplaying a key development regarding recent data center design wins that was buried in a press release issued yesterday outlining the purported benefits of the merger.

In the press release, EZchip revealed:

"With its NPS product line, EZchip has won three tier-1 data center customers . . . "

This is BIG NEWS, and it is a new and material disclosure that is worth highlighting. Previously, EZchip had disclosed that it secured NPS design win(s) with a single "hyper-scale data center." This latest disclosure implies that EZchip has secured two additional major data center wins, indicating that customer adoption of the NPS is accelerating.

The short list of "tier-one" data center operators would include Amazon, Google, Microsoft, Facebook, HP, IBM and Rackspace. Based on EZchip's disclosure, we believe the Company may have secured wins with three of these names. These wins are in addition to new design wins with a "tier-one carrier," a pair of "tier-one switch vendors," and longtime NP customer ZTE. EZchip has also announced that it has secured wins with a number of tier-two and smaller customers.