26-Apr-2010 SILICOM REPORTS Q1 FINANCIAL RESULTS

KFAR SAVA, Israel, April 26, 2010 -- Silicom Ltd. (NASDAQ: SILC and TASE: SILC), today reported financial results for the first quarter ended March 31, 2010

Revenues for the first quarter of 2009 were $6.4 million, a 28% increase compared with $5.0 million for the first quarter of 2009.

Operating income for the quarter was $1,007,000, an increase of 55% compared with $649,000 in the first quarter of 2009. Net income for the quarter was $938,000, or $0.13 per diluted share ($0.14 per basic share), an 8% increase compared with $867,000, or $0.13 per share (basic and diluted), for the first quarter of 2009.

As of March 31, 2010, the Company’s cash, cash equivalents, bank deposits and marketable securities totaled $43.8 million, up $0.6 million compared with the end of 2009.

Commenting on the results, Shaike Orbach, President and CEO, said, “The first quarter was another period of strong revenues and operating income together with significant strategic progress towards our long-term objectives. Our continued success confirms the trends we reported in the fourth quarter of 2009: early signs of recovering markets, a strong underlying need for our traditional product lines, and growing interest and sales of our latest product innovations.”

Mr. Orbach continued, "We are especially encouraged by a number of positive factors, each of which is representing an important potential growth engine for the company:

Mr. Orbach concluded, “All of these achievements reflect the success of our continuous investment in innovative R&D, sales and marketing. We believe the combination of an expanding product portfolio, a satisfied customer base, recovering markets, and a reputation for technology innovation position us to continue delivering strong sales growth as we move into 2010.”

Conference Call Details :

Silicom’s Management will host an interactive conference today, April 26th, at 9am EDT (6am Pacific Time, 4pm Israel Time) to review and discuss the results. To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, try the international dial-in number.

INTERNATIONAL: +972 3 918 0609

At: 9:00am Eastern Time, 6:00am Pacific Time, 4:00pm Israel Time

Silicom Ltd. is an industry-leading provider of high-performance server/appliances networking solutions. The Company's flagship products include a variety of multi-port Gigabit Ethernet, copper and fiber-optic, server adapters and innovative BYPASS adapters designed to increase throughput and availability of server-based systems, WAN Optimization and security appliances and other mission-critical gateway applications. For more information, please visit: www.silicom.co.il.

Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties, or other factors not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission. The Company disclaims any duty to update such statements.

Silicom Ltd. Consolidated Balance Sheets

(US$ thousands)

	March 31, 2010		December 31, 2009

Assets

Current assets
Cash and cash equivalents	$	7,559	$	7,253
Short-term bank deposits		7,503		7,253
Marketable securities		11,147		10,425
Accounts receivables: Trade, net		5,765		5,172
Accounts receivables: Other		560		371
Inventories		5,886		4,677
Deferred tax assets		175		233
Total current assets		38,595		35,384

Marketable securities		17,640		18,308
Assets held for employees’ severance benefits		1,126		1,105
Deferred tax assets		241		192
Property, plant and equipment, net		568		602

Total assets	$	58,170	$	55,591

Liabilities and shareholder's equity

Current liabilities
Trade accounts payable	$	3,785		$	2,261
Other accounts payable and accrued expenses		2,108			2,138
Total current liabilities		5,893			4,399

Liability for employees’ severance benefits		2,045			1,967

Total liabilities		7,938			6,366

Shareholders' equity
Ordinary shares and additional paid-in capital		34,243			34,174
Treasury shares		(38	)		(38	)
Retained earnings		16,027			15,089
Total Shareholders' equity		50,232			49,225
Total liabilities and shareholders equity	$	58,170		$	55,591

Silicom Ltd. Consolidated

Statements of Income

(US$ thousands, except for share and per share data)

Three-month period
	ended March 31,
	2010		2009
Sales	$	6,400	$	5,018
Cost of sales		3,698		3,078
Gross profit		2,702		1,940

Research and development expenses		837		637
Selling and marketing expenses		498		379
General and administrative expenses		360		275
Total operating expenses		1,695		1,291

Operating income		1,007		649

Financial income, net		141		344
Income before income taxes		1,148		993
Income taxes		210		126
Net income	$	938	$	867


Basic income per ordinary share	$	0.14	$	0.13

Weighted average number of ordinary shares used to compute basic income per share (in thousands)		6,809		6,694

Diluted income per ordinary share	$	0.13	$	0.13

Weighted average number of ordinary shares used to compute diluted income per share (in thousands)		6,964		6,791

Kenny Green / Ehud Helft