Because merchant silicon vendors jockey with each other for manufacturing market share, there is intense competition to produce chips that offer the highest performance and functionality, the lowest latency, the highest density and the best cost-performance available. Merchant silicon is a key design choice with benefits for both manufacturers and their customers.

Because ASIC clients are locked in to their proprietary hardware-based network components and they face little outside market pressure, these manufacturers have less incentive to innovate or refresh product lines.Highly specialized ASICs also carry high development costs -- special design teams and tools, custom chip development and redesign risk, among others -- that a single company must bear and pass on to its customers. While it's true that merchant silicon manufacturers also share a majority of these expenses, the per-unit cost of R&D and design is lower because the manufacturers produce larger quantities. This also equates to larger overall R&D commitments.

Customers benefit from the economy of scale, lower price point to entry, lower field-failure rates and the freshest, best-of-breed technologies available. With the merchant silicon market growing larger and more competitive, a flexible merchant solution can offer all the advantages of ASICs at lower development costs.

Additionally, merchant silicon is part of an open ecosystem that includes not just commercially available chips but also low-level software components. Product vendors that take advantage of merchant silicon can also achieve savings through use of common drivers and software utilities -- savings that can be passed on to customers directly or in the form of greater innovation.

Merchant silicon also equates with a standards-based approach. Here's why: