SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 2)1

EZchip Semiconductor Ltd.

(Name of Issuer)

Ordinary Shares, par value NIS 0.02 per share

(Title of Class of Securities)

M4146Y108

(CUSIP Number)

STEVE WOLOSKY, ESQ.

OLSHAN FROME WOLOSKY LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

November 2, 2015

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

_______________

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP NO. M4146Y108

1	NAME OF REPORTING PERSON Raging Capital Master Fund, Ltd.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 1,944,595
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 1,944,595
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,944,595
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5%
14	TYPE OF REPORTING PERSON CO

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CUSIP NO. M4146Y108

1	NAME OF REPORTING PERSON Raging Capital Management, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 1,944,595
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 1,944,595
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,944,595
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5%
14	TYPE OF REPORTING PERSON IA

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CUSIP NO. M4146Y108

1	NAME OF REPORTING PERSON William C. Martin
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER 1,944,595
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER 1,944,595
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,944,595
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5%
14	TYPE OF REPORTING PERSON IN

4

CUSIP NO. M4146Y108

1	NAME OF REPORTING PERSON Paul K. McWilliams
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 4,000
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER 4,000
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1%
14	TYPE OF REPORTING PERSON IN

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CUSIP NO. M4146Y108

1	NAME OF REPORTING PERSON Kenneth H. Traub
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x   (b) o
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER - 0 -
	8	SHARED VOTING POWER - 0 -
	9	SOLE DISPOSITIVE POWER - 0 -
	10	SHARED DISPOSITIVE POWER - 0 -
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON - 0 -
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES		o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON IN

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CUSIP NO. M4146Y108

The following constitutes Amendment No. 2 to the Schedule 13D filed by the undersigned (“Amendment No. 2”).  This Amendment No. 2 amends the Schedule 13D as specifically set forth herein.

Item 4. Purpose of Transaction.

Item 4 is hereby amended to add the following:

Raging Capital is soliciting proxies from shareholders of the Issuer for the purposes of voting against the proposed merger with Mellanox and for the election of Raging Capital’s two highly-qualified director nominees at the Annual General Meeting of Shareholders of the Issuer scheduled to be held on November 12, 2015 (the “General Meeting”).  Raging Capital strongly believes that the $25.50 per share sale price shareholders would receive in the proposed merger is insufficient and considerably undervalues the Issuer and that the Board should be reconstituted with directors who are committed to maximizing the Issuer’s full value for the benefit of all shareholders.  In connection with its solicitation of proxies, Raging Capital has submitted to the Issuer a Position Notice and has issued two open letters to shareholders of the Issuer.

Position Notice

As disclosed in the Issuer’s proxy statement with respect to the General Meeting, shareholders are permitted to apply in writing, through the Issuer, to the other shareholders of the Issuer in order to solicit their vote on items on the agenda of the General Meeting (“Position Notice”), in accordance with Section 88(b) of the Israeli Companies Law.  On November 2, 2015, Raging Capital submitted its Position Notice to the Issuer, the text of which is set forth below:

Raging Capital Master Fund, Ltd. (“Raging Master”) strongly believes the US$25.50 per share sale price shareholders would receive under the proposed acquisition of EZchip Semiconductor Ltd. (“EZchip” or the “Company”) by Mellanox Technologies, Ltd. (“Mellanox”) considerably undervalues the Company and its future prospects.  Raging Master believes EZchip has enormous potential to grow as an independent public company and should not be sold at this time.

EZchip has a dominant position in the network processor market, a position Raging Master believes has been strengthened with Marvell Technology’s recent announcement that it will be exiting this market.  In addition, following three years of significant investment in research and development, EZchip is on the verge of sampling its new NPS-400 chip, which leapfrogs existing technologies.  The Company has already secured design wins for the NPS-400 from several new customers, including a “tier one carrier”, a “tier one switch provider”, and a “hyper scale data center operator.”  Raging Master also believes the growth opportunity associated with the TILE-Mx processor, an ARM-based multi-core chip that will incorporate EZchip’s best-of-breed networking processor and accelerator capabilities, has not been factored into the US$25.50 sale price.

The most important factor to understand and appreciate is the immense amount of operating leverage in EZchip's business model.  Remember, the bulk of the development costs of NPS and TILE-Mx are already being expensed through the Company's income statement, which means that a high percentage of the high-margin, incremental revenues from NPS-400 and TILE-Mx will drop directly to the bottom line.  This favorable operating leverage profile provides significant potential upside, while downside risks are limited by EZchip's substantial net cash balance and strong ongoing operating cash flows from long-life design wins.  For EZchip shareholders, this provides a very attractive risk/reward set-up with limited downside risk and significant upside potential.  Raging Master asks: Why Sell Now?

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CUSIP NO. M4146Y108

If EZchip should be sold, Raging Master believes the Board has a fiduciary obligation to conduct a thorough sale process designed to maximize shareholder value.  Raging Master does not believe such a process has been conducted and the proposed merger appears to be a marriage of convenience rather than the outcome of a robust and rigorous sale process.  As a result, Raging Master believes the merger should be voted down by shareholders and the Board should be reconstituted with directors who are committed to maximizing EZchip’s full value for the benefit of all shareholders.  To this end, Raging Master has disseminated to EZchip shareholders a competing GOLD proxy card, on which shareholders will not only be able to vote against the merger, but will also have the opportunity to elect its highly-qualified director nominees – Paul K. McWilliams and Kenneth H. Traub – to the Board at the upcoming General Meeting.

Raging Master encourages you to visit its website at www.EZCH-value.com for additional information and materials regarding its solicitation.  For assistance with voting your shares, contact Okapi Partners: info@okapipartners.com, U.S. toll-free: (855) 208-8902, Israel toll-free: 01801227249.

Open Letters to Shareholders

Raging Capital has issued two open letters to shareholders of the Issuer, on October 22, 2015 and October 29, 2015, in connection with its solicitation.  Copies of the letters are attached hereto as Exhibits 99.1 and 99.2 and are incorporated herein by reference.

Item 7. Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibits:

Exhibit No.        Description

99.1 Letter, dated October 22, 2015, from Raging Capital to Shareholders of the Issuer.

99.2 Letter, dated October 29, 2015, from Raging Capital to Shareholders of the Issuer.

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CUSIP NO. M4146Y108

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated:  November 2, 2015	Raging Capital Master Fund, Ltd.
	By:	Raging Capital Management, LLC Investment Manager
	By:	/s/ Frederick C. Wasch
		Name:	Frederick C. Wasch
		Title:	Chief Financial Officer

Raging Capital Management, LLC
By:	/s/ Frederick C. Wasch
	Name:	Frederick C. Wasch
	Title:	Chief Financial Officer

/s/ Frederick C. Wasch

Frederick C. Wasch  as attorney-in-fact for William C. Martin

/s/ Paul K. McWilliams

Paul K. McWilliams

/s/ Kenneth H. Traub

Kenneth H. Traub

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EX-99.1

Exhibit 99.1

RAGING CAPITAL URGES SHAREHOLDERS TO VOTE AGAINST THE PROPOSED “MERGER OF CONVENIENCE” BETWEEN EZCHIP SEMICONDUCTOR AND MELLANOX TECHNOLOGIES

Why the Mellanox Merger Agreement is a Bad Deal for Shareholders of EZchip Semiconductor

Vote the GOLD Proxy Card When Available

October 22, 2015

Dear Fellow Shareholders:

Raging Capital Management, LLC is a long-term, value-oriented investor that owns 1,944,595 ordinary shares of EZchip Semiconductor Ltd. (“EZchip” or the “Company”), constituting approximately 6.5% of the shares outstanding, making us one of the Company’s largest shareholders.  We built this position prior to the recent ill-advised acquisition offer discussed below with the belief that EZchip is a fast-growing, market leader in an expanding multi-billion dollar market with a strong balance sheet, long-life product portfolio and extraordinary potential.

We are writing today to express our view that the $25.50 per share consideration offered by Mellanox Technologies, Ltd. (“Mellanox”) to acquire EZchip considerably undervalues the Company and its future prospects.  We believe EZchip has enormous potential to grow as an independent public company and should not be sold at this time.  However, if the Company should be sold, we believe the Board has an obligation to conduct a thorough process designed to maximize shareholder value; it is apparent that this has not taken place.  As such, we intend to vote against this transaction at the November 12, 2015 Annual General Meeting of Shareholders and encourage you to do the same.

Here’s why:  

EZCHIP’S DOMINANT POSITION IN THE NETWORK PROCESSOR MARKET HAS BEEN FURTHER STRENGTHENED WITH  MARVELL’S RECENT MARKET EXIT

After a long battle for market share, EZchip has prevailed with its leading-edge technology in the network processing market.  In fact, Marvell Technologies, once a primary competitor to EZchip, recently announced it is exiting the market and will instead partner with EZchip to provide its customers with critical processor technology.  Another major competitor in this space, Broadcom, exited the market several years ago.  This leaves EZchip as the only source for providing merchant network processing technologies.  Marvell’s exit from the market should translate into significant new growth opportunities for EZchip and has not been accurately reflected in the financial projections provided by the Company to justify the value of the $25.50 sale price to Mellanox.

EZCHIP’S NEW NPS-400 WILL RADICALLY EXPAND ADDRESSABLE MARKET; VALIDATED BY KEY DESIGN WINS

Following three years of significant investment in research and development, EZchip is now prepared to sample its NPS-400 chip for the first time this quarter. EZchip’s forthcoming NPS processors are well-positioned to capitalize on the emerging trends of white box networking, software-defined networking (SDN) and network functions virtualization (NFV) that are all key to the evolution and growth of the communication networks of the future.  More specifically, the NPS-400 leapfrogs existing technologies by handling layers 2-7 processing with a customer-friendly C-programmable interface.

We believe NPS-400 will radically expand the total addressable market and potential customer base for EZchip.  To support this, we look no further than EZchip’s recently announced NPS-400 design wins with several new customers, including a “tier one carrier”, a “tier one switch provider”, and a “hyper scale data center operator.” Additionally, EZchip has secured design wins from long-time customers such as ZTE.  Yet, we believe EZchip is just scratching the surface of NPS’ potential.

According to statements from EZchip’s management, the Company will initiate shipments of NPS-400 development devices later this year and begin shipping production volume in 2016.  Based on historical EZchip sales data, we believe this could drive 2016 NPS-400 revenue in excess of $15 million in 2016 when EZchip is also scheduled to initiate shipments of its new TILE-Mx development devices.

Revenue generated from these new devices should ramp up significantly in 2017 and beyond.  According to EZchip, these new devices should expand EZchip’s total addressable market six fold to $2.2 billion in 2017.  Due to the fact that EZchip has publicly stated that most of the development costs associated with these new devices are behind them, the incremental operating margins associated with these new sales should be significant.

In our opinion, the $25.50 per share acquisition proposal not only undervalues the existing business and its future potential but Mellanox is also essentially getting NPS-400 for free.

TILE-MX INVESTMENTS WILL GENERATE SIGNIFICANT VALUE IN 2017 AND BEYOND

In 2014, EZchip spent $50 million to acquire Tilera, a provider of multi-core processing chips.  With this acquisition, EZchip doubled its served available market and became a more diversified, preeminent supplier of high-end technologies to the data center market.  Since the acquisition, EZchip has invested heavily into Tilera’s next generation product, the TILE-Mx processor - an ARM-based multi-core chip that will incorporate EZchip’s best-of-breed networking processor and accelerator capabilities.  Targeted at the fast-growing data center market, the TILE-Mx will further expand EZchip’s addressable market to over $2.2 billion by 2017.   We believe the TILE-Mx growth opportunity is assigned no value by the Mellanox acquisition offer.

CISCO REVENUES TO REMAIN STRONG FOR YEARS; MARKET HAS MISINTERPRETED AND OVER-REACTED AND THEREFORE IT IS INAPPROPRIATE TO SELL AT A MODEST PREMIUM TO THE DEPRESSED PRICE FOLLOWING THE CISCO “NEWS”

Earlier this year, EZchip disclosed that Cisco plans to use an internally developed ASIC for the next generation of its high-end routers.  This announcement led to a sharp, albeit transitory, decline in EZchip’s share value – providing Mellanox with the opportunity to make a lowball offer.  Subsequently, EZchip has provided additional information about its strong relationship with Cisco, including the fact that EZchip has secured additional design wins within Cisco for its NPS chip and that a material portion of the Cisco-generated revenues are not at risk at all.  Furthermore, in a recent interviewi, EZchip’s CEO Eli Fruchter stated that the potential “hit to revenue will come in 2019-2020, and no problem is foreseen until then.”  He also noted, “There is no doubt that, even alone, EZchip would have succeeded in offsetting the damage…”  Later in the same article, Mr. Fruchter also said that, “Cisco’s decision could also yet change; we don’t think that the last word has been said on the matter.”

Interestingly enough, a recent research report from Inflection Point Research stated that, “from a P&L analysis it is hard to justify the ROI for doing an ASIC for the next gen ASR9K, and Cisco with their new management team knows it.”  Inflection Point further asserted its belief that “CSCO will most likely end up using EZchip and not develop their own ASIC.”

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The bottom line here is that EZchip remains a critical supplier to Cisco and will likely continue to be for many years to come.  In our view, the market misinterpreted and unduly discounted EZchip’s share price when the Cisco “news” came out, and therefore it is inappropriate to sell EZchip at a modest premium to this inappropriately and temporarily discounted price.

THE EZCHIP-MELLANOX MERGER APPEARS TO BE A MARRIAGE OF CONVENIENCE RATHER THAN THE RESULT OF A ROBUST AND RIGOROUS SALE PROCESS

In the same article referenced earlier, Mr. Fruchter commented, “It was fairly clear that we would join together someday” while Mellanox’s CEO, Eyal Waldman, added, “We’ve been talking about the merger for several years.”  Furthermore, it is made abundantly clear in EZchip’s proxy materials that the Board of Directors failed to implement a full, fair and competitive bidding process – but instead, were determined to sell the business to long-standing friends nearby in Yokneam at a valuation that clearly does not reflect the full value of the Company.

According to EZchip’s proxy materials describing the sale, the Board of Directors conducted a very condensed sale process, only negotiating with one potential buyer – Mellanox, and performed a very limited market check with other potential suitors a few short days prior to executing the merger agreement, which gave no other potential acquirers a reasonable chance to make a competitive offer.  We have confirmed with prominent investment bankers as well as logical potential acquirers that the business was not actively marketed for sale.

Following the merger announcement we asked EZchip’s CEO Eli Fruchter “Why sell for $25.50 per share?” and he responded, “I just pulled a number that I thought was very high [when the stock was trading at $16 per share].”

In our opinion, the Board failed to conduct a robust and rigorous process to sell the Company. As a result, shareholders are being asked to approve an acquisition in which the transaction price is significantly below what the Company is actually worth.

MELLANOX OFFER DOES NOT REFLECT FULL VALUE FOR EZCHIP AND ITS PROSPECTS

“Investors do not yet fully appreciate how the company’s next generation, programmable NPS processors can transform the company’s revenue stream beginning within the next two years.”ii

“It’s optically not that attractive of an offer”iii

Gary Mobley, sell-side analyst with Benchmark Company, LLC covering EZchip

In our opinion, the $25.50 per share acquisition price offered by Mellanox on September 30, 2015 is not a fair or appropriate buyout value for EZchip’s existing business and neglects to adequately compensate shareholders for the substantial value potential associated with Marvell’s exit from the market, new products, design wins and favorable industry trends that will help to drive the Company’s future growth and profitability.

The most important factor to understand and appreciate is the immense amount of operating leverage in EZchip’s business model.  Remember, the bulk of the development costs of NPS and TILE-Mx are already running through the Company’s income statement… this means that a high percentage of the high margin, incremental revenues from NPS-400 and TILE-Mx will drop directly to the bottom line.  Additionally, Israel’s Office of the Chief Scientist provides a very favorable tax regime, and EZchip has already pre-paid many of its future tax liabilities.

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This favorable operating leverage profile provides significant potential upside, while downside risks are limited by EZchip’s substantial net cash balance and strong ongoing operating cash flows from long-life design wins.  For EZchip shareholders, this provides a very attractive risk/reward set-up with limited downside risk and massive upside potential.  Again, Why Sell Now?

EZCH Earnings Estimates: Upside Driven by Immense Operating Leverage

	Fiscal Year End
	2015	2016	2017	2018	2019
Earnings Per Share (EPS) Core Business¹	$1.41	$1.75	$2.46	$2.46	$2.46
NPS + TILE-Mx EPS Contribution²	$0	$0	+$0.93	+$1.69	+$2.44
Aggregate EPS (Core Business + NPS + TILE-Mx)	$1.41	$1.75	$3.39	$4.15	$4.90
Cash Per Share³	$6.00	$7.50	$10.60	$14.50	$19.00
Estimated EPS Multiple + Year-End Cash		EZchip’s Potential Per Share Value
		2016	2017	2018	2019
10x EPS Multiple + Cash		$25.00	$44.50	$55.95	$68.15
15x EPS Multiple + Cash		$33.75	$61.45	$76.65	$92.65
20x EPS Multiple + Cash		$42.50	$78.40	$97.40	$117.15

Notes:

(1) FactSet consensus estimates FY2015-2016 (we believe consensus estimates for 2016 will prove to be conservative);

20% annual market growth 2016 and 2017 based on The Linley Group TAM estimates (cited by EZchip in Q2 2015 earnings presentation);

assumes no low-speed segment growth

(2) Raging Capital estimates assumes $40/$80/$120 million revenue growth at 65-70% gross margin;

 $5 million incremental annual operating expense, 0% tax rate and 30 million shares outstanding

(3) Assumes $3 million annual capital expenditures; $5 million in annual Office of Chief Scientist tax payments

NEXT STEPS TO ENSURE SHAREHOLDER VALUE IS PROTECTED AND MAXIMIZED

EZchip is a great company with best-in-class products, excellent engineering capabilities and extraordinary people.  It is our belief that EZchip can and will continue to thrive as a stand-alone business far into the foreseeable future.  In the event that a sale of EZchip is not consummated, we would like to see the Board take the following steps:

Consider executing a $100 million share repurchase program.  EZchip announced a modest $20 million share repurchase program in a press release issued March 23, 2015.  In this press release, EZchip CEO, Eli Fruchter stated:  “We believe the share repurchase program represents a good use of the Company’s capital and the Board’s confidence in EZchip’s long term prospects, and is consistent with the goal of increasing shareholder value.  We continue to believe both our current, and new products are well positioned to drive meaningful growth over the next several years and we remain highly optimistic about our short-term, mid-term and long-term performance.”

EZchip has a strong balance sheet with nearly $200 million of cash on-hand and no debt and it is a business that will continue to generate sustainable free cash flows far into the future.  In the event that a sale of EZchip is not consummated and the market does not recognize the full longer-term value of the business, we would like the Company to expand its open-market share repurchase program for the benefit of shareholders as shares are redeemed in an accretive fashion.

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Immediately reconstitute the Board with the addition of two new Board members having relevant industry experience and strong transactional expertise.  Toward this end, Raging Capital has nominated two well-qualified candidates who are prepared to protect all shareholders’ interests by helping EZchip to continue to grow as an independent company. If and when it is appropriate to sell the Company, they would help execute and oversee a comprehensive sale process that would ensure shareholder value is maximized.   If elected, these new Board members would occupy just two of seven Board seats but would be instrumental in their role as advocates for shareholders instituting appropriate governance oversight, sustainable economic performance and long-term value creation.  Furthermore, if elected, these candidates will seek to work constructively with the other directors to ensure your value is protected.

ABOUT OUR NOMINEES:

Kenneth Traub has over 25 years of successful experience in protecting and increasing shareholder value as both a senior executive and director of numerous public companies, particularly in the semiconductor and communications industries, as well as extensive experience in Israel. Mr. Traub currently serves on the boards of directors of the following public companies: (i) MRV Communications, Inc., a leading global provider of packet and optical communications network equipment with R&D facilities in Yokneam, Israel.  As Chairman of the Board, Mr. Traub has been leading the turnaround and repositioning of MRV which has generated significant returns to shareholders, (ii) DSP Group, a leading global supplier of wireless chipset solutions for converged communications headquartered in Herzliya, Israel.  Mr. Traub serves as Chairman of the Strategic Committee of the Board of DSP Group, (iii) Athersys, Inc., and (iv) A. M. Castle & Co.  Mr. Traub previously served on the boards of directors of the following public companies: (i) Phoenix Technologies Ltd., a supplier of computer technology which was sold in a series of transactions at a significant premium after Mr. Traub joined the board, (ii) MIPS Technologies, Inc., a semiconductor company which was sold at a significant premium after Mr. Traub joined the board, (iii) Xyratex Limited, a supplier of data storage technologies which was sold at a significant premium after Mr. Traub joined the board, and (iv) Vitesse Semiconductor Company, a semiconductor company in the communications network market.  Mr. Traub served as Chairman of the Strategic Committee of Vitesse Semiconductor and led the process which resulted in the sale of Vitesse to Microsemi Corporation at a significant premium.  Previously, Mr. Traub was the President and CEO of American Bank Note Holographics, Inc. (ABNH), a leading global supplier of optical technologies, and under his leadership, shareholders achieved over 1000% increase in shareholder value, culminating in the sale of ABNH to JDS Uniphase Corp.  Prior to ABNH, Mr. Traub co-founded and served as EVP and CFO of Voxware, Inc., a pioneer in Voice over Internet Protocol communication technologies.  Mr. Traub received a BA from Emory College and an MBA from Harvard Business School.

Paul McWilliams is a seasoned operating executive, investor and senior advisor within the semiconductor technology sector.  Mr. McWilliams is currently on the advisory board for two publicly-traded technology semiconductor companies and has an extraordinarily wide base of contacts with senior executives in the industry.  Mr. McWilliams also provides consulting services for various institutional investment companies with a focus on undervalued technology companies.  From its start in 2002 until his retirement in 2014, Mr. McWilliams was the editor of Next Inning Technology Research, which was one of the most widely circulated subscription-based research products covering investing in the technology sector.  Prior to Next Inning, Mr. McWilliams was the founder of MTS, Inc., one of the largest manufacturer representative companies operating in the Midwestern U.S. that specialized in the introduction of leading edge semiconductor technology.  During the two decades that Mr. McWilliams led MTS, Inc. it pioneered markets for Altera, Cypress Semiconductor, Linear Technology, LSI Logic and many others.  Mr. McWilliams is often quoted in leading business publications and has been a featured speaker at professional technology conferences contributing his perspective on issues regarding semiconductor technologies, industry trends and how to spot undervalued tech companies.  Earlier in his career, Mr. McWilliams was included as one of “The 30 Most Powerful People in Investing” in Smart Money magazine.

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Raging Capital is one of the largest shareholders of EZchip and our interests are closely aligned with yours. Our objective is for the Company to continue to prosper and grow independently, and if the Company is to be sold, we would expect it to be at a materially higher price.  Consequently, we intend to vote ‘against’ the proposed sale to Mellanox and intend to solicit proxies from the shareholders in opposition to the proposed sale and for the election of our highly-qualified nominees.  If we are successful in blocking the deal and electing our nominees, we intend to work constructively with the Board and management of EZchip to help maximize shareholder value going forward.

We encourage you to visit our website at www.EZCH-value.com for additional information and materials regarding our solicitation.

We urge you to sign, date, and return the GOLD proxy when available.

Sincerely,

/s/ William C. Martin

William C. Martin

Chairman and Chief Investment Officer

Raging Capital Management, LLC

i Globes.co.il “Mellanox’s Waldman: We’ve discussed merging for years” October 1, 2015

ii Benchmark Company analyst report May 13, 2015

iii TheDeal.com “Activist believes proposed offer for EZchip is too low” October 14, 2015

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EX-99.2

Exhibit 99.2

RAGING CAPITAL REITERATES STRONG OPPOSITION TO ILL-ADVISED MERGER BETWEEN EZCHIP SEMICONDUCTOR AND MELLANOX TECHNOLOGIES

Highlights EZchip’s Failure to Run a Robust and Comprehensive Sale Process

Details How Mellanox is Poised to Reap All of the Upside of EZchip if Merger Approved

Outlines Raging Capital’s Track Record of Creating Long-Term Shareholder Value

Vote the GOLD Proxy Card Today

October 29, 2015

Dear Fellow Shareholders:

Raging Capital Management, LLC, one of the largest shareholders of EZchip Semiconductor Ltd. (“EZchip” or the “Company”), reiterates its strong belief that the $25.50 per share consideration offered by Mellanox Technologies, Ltd. (“Mellanox”) to acquire EZchip considerably undervalues the Company and its future prospects.  While EZchip would like you to believe that the Mellanox transaction provides “significant, compelling” value to its shareholders, a closer look at the so-called “sale process” undertaken by EZchip, the shareholder-unfriendly terms of the merger agreement and the significant and quantifiable upside EZchip shareholders will surely leave on the table if the merger is approved should make it clear that this is simply a bad deal for shareholders.

We remind you that the Annual General Meeting of Shareholders of EZchip scheduled to be held on November 12, 2015 is fast approaching and your vote to reject the merger and to elect our two highly-qualified director nominees – Paul K. McWilliams and Kenneth H. Traub – is extremely important to prevent a value-destructive transaction and to help protect the interests of shareholders.   We urge you to sign, date and return the GOLD proxy card today.

EZCHIP’S BOARD FAILED TO RUN A COMPREHENSIVE SALE PROCESS

EZchip and Mellanox are both based in the small town of Yokneam, Israel and it is clear that the CEOs of both companies were driven to bring the two companies together without seriously exploring other alternatives.  In fact, a recent article was recently published in Israel’s Globes business newspaper entitled “Mellanox’s Waldman: We’ve discussed merging for years.”

While we can appreciate any personal desires of Eli Fruchter and Eyal Waldman to merge the two companies, the fact is that EZchip is a public company.  When a public company decides to be sold, the board and management of such company have an obligation to its shareholders to conduct a diligent process to maximize shareholder value.  That clearly did not take place at EZchip.  Instead, as the proxy statement makes clear, EZchip negotiated with only one potential buyer – Mellanox.     Further, in speaking to semiconductor investment bankers as well as logical potential acquirers, we have confirmed that EZchip did not run a full process or even contact all of the logical potential buyers for the business.

By not creating a competitive bidding environment or even seriously entertaining alternatives, EZchip deprived shareholders of the opportunity to sell at the highest price.  While we do not think EZchip should be sold at all, when it decided to sell, the EZchip board had an obligation to run a rigorous process to maximize value and it failed to do so.

INSTEAD OF MAXIMIZING SHAREHOLDER VALUE, THE EZCHIP-MELLANOX MERGER AGREEMENT IS DESIGNED TO HELP GUARANTEE A “MERGER OF CONVENIENCE” BETWEEN FRIENDS

In addition to failing to run a complete and comprehensive sale process, the Agreement of Merger between EZchip and Mellanox is designed to entrench and effectively help guarantee a “Merger of Convenience” between friends.  In fact, the provisions of the Agreement are unusually favorable to Mellanox while also limiting EZchip’s ability to obtain higher value elsewhere.  For example:

· Lack of a “Go Shop” – As is often standard, particularly when a company runs an abbreviated sale process such as what occurred with this transaction, the EZchip-Mellanox merger lacks a Go-Shop provision that would enable EZchip to solicit competing and potential higher bids for the Company.

· Abnormally High Termination Fee – In the event that EZchip receives a higher bid, the Company would be required to pay Mellanox $28.4 million.  This is equal to 4.9% of the equity value of the transaction.  In our experience, a 3.0% to 3.5% break-up fee is more typical for public companies of this size.   This abnormally high termination fee entrenches the existing deal and has a chilling effect on competing bids.

In our opinion, the structure of this Agreement of Merger was designed to help guarantee a deal with Mellanox and effectively prevented third parties from delivering higher value to EZchip shareholders.  The only way to address the bad deal that EZchip entered into with Mellanox is for shareholders to reject the transaction.  If shareholders reject the deal, the Agreement of Merger will be terminated, no Termination Fee will be due, and EZchip will remain an independent public company with the opportunity to generate significantly more value for shareholders.

INSTEAD OF EZCHIP SHAREHOLDERS, MELLANOX ITSELF IS POISED TO CAPTURE ALL OF THE UPSIDE OF EZCHIP

As the beneficiary of an impotent sales process and an Agreement of Merger that is tilted in its favor, Mellanox stands ready to reap the benefits of its acquisition of EZchip.   At its annual Analyst Day on October 23, 2015, Mellanox highlighted some of the potential benefits of acquiring EZchip, including:

· Expanded Addressable Market:  EZchip’s NPU and multi-core products are expected to expand Mellanox’s addressable market by $2.2 billion by 2017.

· Opportunities in Intelligent Networking:  EZchip is expected to enable Mellanox to be a “stronger, more scaled competitor” in the fragmented “intelligent networking” and interconnect segment.

· Enhanced Networking Capabilities: EZchip will provide Mellanox with Layer 4-7 capabilities, which will enhance its data center technology roadmap well into the future.

· Revenue Opportunities:  EZchip will add “sticky design wins” and “cross selling” opportunities, creating visible, long-term revenue upside for Mellanox.

Also during its Analyst Day, Mellanox highlighted the explosive growth potential of the cloud in China as companies like Alibaba, Baidu and TenCent all work to build out enormous data centers.  We believe this market represents another significant, untapped growth opportunity for EZchip’s NPS chip, which recently secured a comparable “tier-one hyper scale data center” design win in the U.S.

Finally, CRT Capital recently estimated, using what we view as being very conservative assumptions, that Mellanox is poised to gain 80 cents per share of accretion in fiscal year 2016 due to the EZchip acquisition.  The potential upside is obviously even greater in future years, as EZchip’s NP-5, NPS and TILE-Mx products ramp.  This represents an enormous transfer of value from EZchip to Mellanox shareholders that would occur if the transaction is consummated.

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RAGING CAPITAL IS A LONG-TERM, COMMITTED EZCHIP SHAREHOLDER

EZchip recently questioned our motives by highlighting the fact that we also own puts on EZchip shares.  We do indeed own short-term puts.   These puts were purchased after the deal was announced due to our concerns about EZchip’s management and their clear desire to “talk down” and obfuscate the value of EZchip in order to close a deal between friends.  While EZchip management has a long track record of poorly managing investor expectations and communications, this recent behavior is even more concerning to us.

We believe EZchip shares deserve to trade higher, not lower.  This is why we purchased our 1.94 million shares of EZchip stock in the first place, and it is why we are spending a tremendous amount of time, energy and money in opposing this merger for the benefit of all shareholders.  This is not a game to us.  Raging Capital has a long track record of successfully advocating and creating value on behalf of shareholders, including:

· Vitesse Semiconductor: After filing our initial Schedule 13D in June 2012, Raging Capital and Ken Traub (one of our EZchip board nominees) were integrally involved in fixing Vitesse’s broken balance sheet, executing on a turnaround and growth plan in Ethernet networking chips, and ultimately selling the company to Microsemi Corporation for a price more than +100% greater than the stock price on the day we filed our 13D.  Like EZchip, Vitesse sold networking-related semiconductors and Cisco was an important customer.

· TICC Capital: Just this week, Raging Capital announced an agreement with TICC Capital as part of a process to implement a new management company at TICC.  If approved by shareholders, the new management agreement will have a permanent fee structure that is -25% lower than the prior agreement, a number of new independent directors will be added to the board (including one Raging Capital designee), and the new manager has agreed to purchase $50 - $100 million (an amount which is equal to approximately 12.5-25% of the company’s current market cap) worth of TICC stock.   We are proud of this shareholder-friendly outcome.

· Taro Pharmaceuticals:  In one of the very few examples of us opposing a sale (like EZchip), we played an instrumental role in blocking a take-private of Israeli-based Taro.  The first take-private offer for Taro was for $24.50 per share.  After our opposition, which highlighted Taro’s strong prospects and how undervalued the company was versus peers, that bid was increased to $39.50.  That offer also failed and Taro stayed public and today the shares trade at more than $140 per share.   This was an incredibly positive outcome for Taro shareholders and we are proud of the integral role we played.

As with Taro Pharmaceuticals, we don’t believe now is the time to be selling EZchip.  Significant potential upside exists, which more than offsets what we believe are limited downside risks.  EZchip shares should trade higher, not lower, as that upside potential is correctly articulated and the Company executes – in the event that the stock does trade lower, we would recommend the Company buy back up to $100 million worth of its shares using EZchip’s strong balance sheet.

EZCHIP OFFERS SUBSTANTIAL POTENTIAL UPSIDE THAT IS WELL IN EXCESS OF THE LIMITED RISKS; NOW IS NOT THE TIME TO SELL

To reiterate what we wrote in our initial letter to shareholders, in our opinion, the $25.50 per share acquisition price offered by Mellanox on September 30, 2015 is not a fair or appropriate buyout value for EZchip’s existing business and neglects to adequately compensate shareholders for the substantial value potential associated with Marvell’s exit from the market, new products, design wins and favorable industry trends that will help to drive the Company’s future growth and profitability.

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It is important to understand and appreciate the immense amount of operating leverage in EZchip’s business model.  Remember, the bulk of the development costs of NPS and TILE-Mx are already being expensed through the Company’s income statement… this means that a high percentage of the high margin, incremental revenues from NPS-400 and TILE-Mx will drop directly to the bottom line.  Additionally, Israel’s Office of the Chief Scientist provides a very favorable tax regime, and EZchip has already pre-paid many of its future tax liabilities.

This favorable operating leverage profile provides significant potential upside, while downside risks are limited by EZchip’s substantial net cash balance and strong ongoing operating cash flows from long-life design wins.  For EZchip shareholders, we believe this provides a very attractive risk/reward set-up with limited downside risk and significant upside potential.  Again, Why Sell Now?

EZCH Earnings Estimates: Upside Driven by Immense Operating Leverage

	Fiscal Year End
	2015	2016	2017	2018	2019
Earnings Per Share (EPS) Core Business¹	$1.41	$1.75	$2.46	$2.46	$2.46
NPS + TILE-Mx EPS Contribution²	$0	$0	+$0.93	+$1.69	+$2.44
Aggregate EPS (Core Business + NPS + TILE-Mx)	$1.41	$1.75	$3.39	$4.15	$4.90
Cash Per Share³	$6.00	$7.50	$10.60	$14.50	$19.00
Estimated EPS Multiple + Year-End Cash		EZchip’s Potential Per Share Value
		2016	2017	2018	2019
10x EPS Multiple + Cash		$25.00	$44.50	$55.95	$68.15
15x EPS Multiple + Cash		$33.75	$61.45	$76.65	$92.65
20x EPS Multiple + Cash		$42.50	$78.40	$97.40	$117.15

Notes:

(1) FactSet consensus estimates FY2015-2016 (we believe consensus estimates for 2016 will prove to be conservative); 20% annual market growth 2016 and 2017 based on The Linley Group TAM estimates (cited by EZchip in Q2 2015 earnings presentation); assumes no low-speed segment growth

(2) Raging Capital estimates assumes $40/$80/$120 million revenue growth at 65-70% gross margin;  $5 million incremental annual operating expense, 0% tax rate and 30 million shares outstanding

(3) Assumes $3 million annual capital expenditures; $5 million in annual Office of Chief Scientist grant repayments

WE BELIEVE AN IMMEDIATE RECONSTITUTION OF THE BOARD IS NECESSARY TO PROTECT THE INTERESTS OF ALL SHAREHOLDERS

Raging Capital has nominated Paul McWilliams and Ken Traub for election as directors at the General Meeting in order to help protect the interests of shareholders.  Paul McWilliams is a seasoned operating executive, investor and senior advisor within the semiconductor technology sector.  Ken Traub has over 25 years of successful experience in protecting and increasing shareholder value as both a senior executive and director of numerous public companies, particularly in the semiconductor and communications industries.  If elected, Messrs. McWilliams and Traub would work together with the other Board members to help grow EZchip as an independent company while instituting appropriate governance oversight, sustainable economic performance and long-term value creation.  If there comes a point when the Company should be sold, they would help execute and oversee a comprehensive sale process that would ensure shareholder value is maximized.

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SEND A MESSAGE TO THE EZCHIP BOARD THAT YOU WILL NOT ACCEPT A LOW-BALL PRICE FOR YOUR SHARES BY VOTING “AGAINST” THE MERGER AND “FOR” THE ELECTION OF OUR DIRECTOR NOMINEES – PAUL MCWILLIAMS AND KEN TRAUB – ON THE GOLD PROXY CARD

We encourage you to visit our website at www.EZCH-value.com for additional information and materials regarding our solicitation.

We urge you to sign, date and return the GOLD proxy card today.

Sincerely,

/s/ William C. Martin

William C. Martin

Chairman and Chief Investment Officer

Raging Capital Management, LLC

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IMPORTANT

Tell your Board what you think!  Your vote is important.  No matter how many Ordinary Shares you own, please give Raging Capital your proxy AGAINST the Merger and FOR the election of its two highly-qualified nominees by taking three steps:

· SIGNING the enclosed GOLDproxy card,

· DATING the enclosedGOLD proxy card, and

· MAILING the enclosed GOLDproxy card TODAY in the envelope provided (no postage is required if mailed in the United States).

If any of your Ordinary Shares are held in the name of a brokerage firm, bank, bank nominee or other institution, only it can vote such shares and only upon receipt of your specific instructions.  Depending upon your broker or custodian, you may be able to vote either by toll-free telephone or by the Internet.  Please refer to the enclosed proxy card for instructions on how to vote electronically.  You may also vote by signing, dating and returning the enclosed GOLD proxy card.

If you have any questions or require any additional information concerning Raging Capital’s solicitation, please contact Okapi Partners at the address set forth below.

1212 Madison Avenue, 24th Floor

New York, N.Y. 10036

(212) 297-0720

US: (855) 208-8902       Israel: 01801227249

E-mail: info@okapipartners.com

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