QUOTE AND NEWS
Market Intelligence Center  Oct 1  Comment 
Marvell Technology Group Ltd (MRVL) closed Tuesday at $13.48 and technical indicators recently have been bearish. Based in part on those numbers, MarketIntelligenceCenter.com's patented algorithms have identified a couple of attractive trading...
SeekingAlpha  Sep 30  Comment 
By Anup Singh: Marvell Technology's (NASDAQ:MRVL) shares fell after the company released its second quarter results. Although the company's results were decent, a weak outlook for the ongoing quarter weighed on the share price. However, this drop...
TheStreet.com  Sep 25  Comment 
a BALTIMORE (Stockpickr) --aPut down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you. Must Read: 5 Stocks Insiders Love Right...
TheStreet.com  Sep 24  Comment 
Story updated at 10 a.m. to reflect market activity. NEW YORK (TheStreet) --aMarvell was upgraded to "market perform" from "underperform" by JMP Securities on Wednesday. Shares of Marvell gained 1.9% to $13.64 in morning trading. The analyst...
Forbes  Sep 5  Comment 
Looking at the universe of stocks we cover at Dividend Channel, on 9/9/14, American International Group Inc (NYSE: AIG), Mercury General Corp. (NYSE: MCY), and Marvell Technology Group Ltd. (NASD: MRVL) will all trade ex-dividend for their...
Cloud Computing  Aug 26  Comment 
SANTA CLARA, Calif. , Aug. 26, 2014 /PRNewswire/ -- Marvell (NASDAQ: MRVL) a worldwide leader in integrated silicon solutions, today has announced that world leading smartphone OEM, ZTE has launched a 5-mode 4G LTE mass market smartphone for the...
TheStreet.com  Aug 22  Comment 
NEW YORK (TheStreet) --aBMO Capitalacut its price target onaMarvell Technologiesa to $14, cut its estimates and set a "market perform" rating. The firmathe company is seeing weaker sales. The stock closed at $13.64 on Thursday. Must Read:...
SeekingAlpha  Aug 22  Comment 
By SA Transcripts: Marvell Technology Group, Ltd (NASDAQ:MRVL) Q2 2015 Results Earnings Conference Call August 21, 2015, 4:45 PM ET Executives Sukhi Nagesh - VP, Finance and Investor Relations Sehat Sutardja - Chairman and CEO ...
Benzinga  Aug 21  Comment 
Marvell Technology Group (NASDAQ: MRVL) shares trended down after hours when the company said third-quarter results won't meet Street views. Marvell forecast third-quarter adjusted earnings of of $0.27 to $0.31 a share, on revenue of $960...
TheStreet.com  Aug 21  Comment 
NEW YORK (TheStreet) --aMarvell Technologya fell in after-hours trading Thursday after the company issued weak third-quarter guidance in its second-quarter earnings report. Marvell expects revenue in the range of $960 million to $1 billion,...




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Marvell Technology Group (NASDAQ:MRVL) makes semiconductor chips predominantly used in hard drives. Their chips also can be found in a wide range of communication applications such as network routers, Microsoft Xbox, and smartphones. Marvell's semiconductor chips power electronics such as Research in Motion’s Blackberry, the Amazon Kindle, and Apple’s iPhone and iPod with wireless-internet capabilities.[1] The company earned $2.8 billion in revenue and $353 million in net income in 2009.[2]

Marvell is a fabless semiconductor company, meaning that they outsource the actual production of their semiconductors to other factories. Marvell’s revenue growth has primary come from sales of its semiconductors designed for data storage.[3] Although headquartered in the United States, Marvell generates 96% of its revenue from outside the US (mainly in Asia).[4] The slowdown in the global economy has led to lower sales growth for Marvell's storage products. As a result, revenue growth for the company's semiconductor products have fallen during the slowdown.

Marvell has increased production of semiconductors for consumer electronics, such as gaming consoles and smart phones in order to take advantage of the growing demand for wireless, hand held devices.

Company Overview

Geographically, Marvell's net revenues are based on the destination of their semiconductor shipments. Marvell sells its chips to many global corporations such as Intel, Western Digital, Toshiba, and Fujitsu, but most of Marvell's chips are shipped to and assembled in Asian countries.

Business Segments

  • Storage (64% of Revenue): Marvell has a history of new innovations before its competitors. For example, Marvell developed the first microchip containing all necessary circuits for a system such as an audio receiver, digital converter, microprocessor for memory, and input/output control. Such a microchip, also known as system-on-a-chip (SoC), is a good example of Marvell’s groundbreaking chip designs.[5] In addition, it was the first company to design the Gigabit all-CMOS read channel as well as the Serial ATA interface solution. These two developments drastically improved the way notebook and desktop PC’s read and process stored information.
  • Communication, Power Management, WLAN, VOIP, DVD-R, Xscale, and Printers(36% of Revenue): Communication products consist of Marvell’s gigabit and fast Ethernet products designed for LAN on Motherboards(LOM), Network Interface Cards(NICs), and other applications. Marvel has benefited from the construction of metro-level communications networks, which have increased demand for its Ethernet chips and switches. However, these PC connectivity products are also designed for notebook, desktop, mobile devices, and server network connections. Semiconductors designed for consumer electronics are the smallest portion of Marvell’s revenues, but these products provide potential for future sales growth. With products such as DSP Switcher integrated regulator modules, Marvell been able to make significant gains in the PC power management industry. Marvell has established itself as a top vendor of Wi-Fi chips, which provide handheld devices with fast Internet access through wireless networks. Since purchasing Intel Xscale technology, Marvell’s semiconductor chips can be found in a range of handheld accessories such as portable video players, the Creative Zen, Sony’s PSP, and the Amazon Kindle. Their chips can provide fast media and data transfer without reducing the electronic's battery life. With this technology, Marvell has won coveted spots on Apple’s iPhone as well as Research in Motion’s new smartphone Bold.

Research and Development

As with any technology-driven company, innovation is crucial to Marvell's future success. Marvell devotes approximately one-third of net revenue to research and development. A substantial portion of Marvell’s expenses come from research and development. The focus of their research and development sector is not only to develop new lines of products but also to reduce production costs of its current chips.

Business Growth

FY 2009 (ended January 30, 2010)[2]

  • Net sales decreased 4.8% to $2.8 billion.
  • Net income more than doubled to $353 million as cost of goods sold fell by 14%.

Trends and Forces

Semiconductor Cyclicality

Demand in the semiconductor industry is very cyclical. Consumer and corporate demand for semiconductor containing electronics can reach levels beyond a manufacturer’s production capability. In the same way, the demand for these consumer electronics, especially PCs, can plummet over the course of a month or two. Typically, the consumer market for electronics is more volatile than the corporate market for electronics. Because a majority of Marvell’s sales still come from large corporations, it is partially protected from substantial declines in demand. As its presence in the consumer electronics business increases, Marvell will increase its overall exposure to this volatile industry. Despite its volatility, the semiconductor industry has experienced an average 13% annual growth over the past 20 years.

Asian Companies Tighten their Technology Budget

The ripple effects of the United States economic slowdown have reached many of Marvell’s primary markets, including China and Japan. As businesses tighten their budgets for new technology, there has been a sharp decline in the demand of the new hard disk drives that traditionally account for nearly half of Marvell’s sales. As a result, sales of Marvell's chips used for storage have experienced slower growth during the slow economic times. Also, the Chinese and Japanese currencies have depreciated relative to the United States dollar. Consequently, the chipmaker’s products have become more expensive relative to comparable products of its Chinese counterparts. Some analysts believe that Marvell may lose market share to companies that can produce chips at lower costs. With excess inventory in their storage segment, new orders for Marvell’s chips will continue to slow down.

Larger Companies specializing in either Storage Chips or Consumer Electronics Chips

Although Marvell’s diverse portfolio puts the company in competition with several large companies. In the storage industry, LSI Corporation merged with Agere and elected to make storage units its primary focus. [1] In the communication market, Marvell will compete with Broadcom and Atheros. Both Broadcom and Atheros have favorable reputations and have been aggressively pushing their networking chips to enterprises and retail customers.

Furthermore, a significant amount of Marvell’s revenue come from a limited number of customers. For example, one customer accounted to more than 10% of their net revenues.Most of Marvell’s sales come from orders, which are easy to cancel, change, or delay.

The Smartphone Effect

Because growth in the storage industry is slowing down, semiconductor companies like Broadcom and Atheros have started to branch out. One of Marvell’s strategies has been to shift focus from servicing mainly large businesses to providing communication chips to a wide-range of individual consumer electronics. Marvell’s Wi-Fi chips, which are present in several popular media players, are among its most promising new products. As 3G and now 4G technologies become standard, Marvell will be in position to supply many new costumers with Wi-Fi capable phones.[6]

Competition

  • LSI Corporation (LSI): Formerly known as LSI Logic Corporation, LSI sells semiconductors and storage systems. LSI makes most of its revenue the sale of its computer storage products to business and individual consumers.
  • STMicroelectronics N.V. (STM): Based in Amsterdam, STMicro is a semiconductor producer. STMicro produces semiconductors found in numerous consumer electronics including digital cable, Bluetooth devices, smart phones, and wireless equipment.
  • Broadcom (BRCM): Broadcom produces semiconductors found in DSL modems, wireless local area networks, handheld devices, HDTV, and mobile phones. Boasting the fifth most valuable patent portfolio among chip producers, Broadcom is capable of producing a range of semiconductors for the wireless devices industry.
  • Atheros Communications (ATHR): As a developer of integrated semiconductor systems for communication products, is one of Marvell’s fastest growing competitors.
  • Texas Instruments (TXN): Large portions of Texas Instrument’s sales come from its semiconductor industry. Its emphasis on chipsets designed for consumer electronics poses a threat to Marvell’s growth in the communications industry.

References

  1. Marvell Product site
  2. 2.0 2.1 MRVL 2009 10-K "Selected Financial Data" pg. 39
  3. MRVL 2009 10-K "Overview" pg. 4
  4. MRVL 2009 10-K pg. 91
  5. Marvell Storage Information
  6. Marvell: Cellular and Handheld Solutions
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