Marvell Technology Group (MRVL)

Inventory

        Inventory is stated at the lower of cost or market, cost being determined under the first-in, first-out method. The Company has taken provisions to write-down the cost of obsolete and excess inventory to the estimated market value based on historical and forecasted demand for its products. If actual future

86

MARVELL TECHNOLOGY GROUP LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

demand for the Company's products is less than currently forecasted, additional inventory provisions may be required. Once a provision is recorded, it is maintained until the product to which it relates to is sold or otherwise disposed of. This treatment is in accordance with Accounting Research Bulletin 43 and Staff Accounting Bulletin 100, "Restructuring and Impairment Charges." The Company recorded charges for inventory excess and obsolescence of $62.1 million, $34.7 million and $14.1 million, for fiscal 2008, 2007 and 2006, respectively. The Company also recorded $109.3 million and $6.7 million of fair market value adjustments to Intel inventory sold in fiscal 2008 and 2007, respectively.

Inventory

        Inventory is stated at the lower of cost or market, cost being determined under the first-in, first-out method. The Company has taken
provisions to write-down the cost of obsolete and excess inventory to the estimated market value based on historical and forecasted demand for its products. If actual future

86

MARVELL TECHNOLOGY GROUP LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

demand
for the Company's products is less than currently forecasted, additional inventory provisions may be required. Once a provision is recorded, it is maintained until the product to which it
relates to is sold or otherwise disposed of. This treatment is in accordance with Accounting Research Bulletin 43 and Staff Accounting Bulletin 100, "Restructuring and Impairment Charges." The Company
recorded charges for inventory excess and obsolescence of $62.1 million, $34.7 million and $14.1 million, for fiscal 2008, 2007 and 2006, respectively. The Company also recorded
$109.3 million and $6.7 million of fair market value adjustments to Intel inventory sold in fiscal 2008 and 2007, respectively.

Inventory

Inventory is stated at the lower of cost or market, cost being determined under the first-in, first-out method. The Company has taken adjustments to write-down the cost of obsolete and excess inventory to the estimated market value based on historical and forecasted demand for its products. If actual future demand for the Company’s products is less than currently forecasted, additional inventory adjustments may be required. Once a reserve is established, it is maintained until the product to which it relates to is sold or otherwise disposed of. This treatment is in accordance with Accounting Research Bulletin 43 and Staff Accounting Bulletin 100, “Restructuring and Impairment Charges.” The Company recorded charges for inventory excess and obsolescence of $34.7 million, $14.1 million and $12.9 million, for fiscal 2007, 2006 and 2005, respectively.

Inventory

Inventory is stated at the lower of cost or market, cost being determined under the first-in, first-out method. The Company has taken adjustments to write-down the cost of obsolete and excess inventory to the estimated market value based on historical and forecasted demand for its products. If actual future demand for the Company’s products is less than currently forecasted, additional inventory adjustments may be required. Once a reserve is established, it is maintained until the product to which it relates to is sold or otherwise disposed of. This treatment is in accordance with Accounting Research Bulletin 43 and Staff Accounting Bulletin 100 “Restructuring and Impairment Charges.” The Company recorded charges for inventory excess and obsolescence of $14.1 million, $12.9 million and $1.0 million, for fiscal 2006, 2005 and 2004, respectively.

(d)                                 Transferred Intellectual Property. (i) Other than the Patents, Seller name and logo trademarks, and the non-Patent Intellectual Property listed on Schedule 1.1(d)(i) to be licensed by Seller to Buyer after the Closing pursuant to the IP and Technology License Agreement, the Intellectual Property owned by Seller and used in the conduct of the Business; and (ii) the Patents listed on Schedule 1.1(d)(ii), and any reexaminations, extensions, reissues, continuation applications, divisional applications and any foreign patent applications relating to the Patents listed on Schedule 1.1(d)(ii), subject to the rights of Seller to receive a license back from Buyer of such Patents after the Closing pursuant to the Transferred Patent License Agreement (collectively, the “

Inventory

        Inventory is stated at the lower of cost or market, cost being determined under the first-in, first-out method. The Company has taken adjustments to write-down the cost of obsolete and excess inventory to the estimated market value based on historical and forecasted demand for its products. If actual future demand for the Company's products is less than currently forecasted, additional inventory adjustments may be required. Once a reserve is established, it is maintained until the product to which it relates to is sold or otherwise disposed of. This treatment is in accordance with Accounting Research Bulletin 43 and Staff Accounting Bulletin 100 "Restructuring and Impairment Charges." The Company recorded charges for inventory obsolescence of $12.9 million, $1.0 million and $3.0 million, for fiscal 2005, 2004 and 2003, respectively.