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Marvell Technology Group Has Some Good Catalysts

April 06, 2014 | About:
rusticnomad

rusticnomad

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Marvell Technology (MRVL) has reported some good set of numbers in the fourth quarter, which has topped the analyst’s estimates. In fact it had an outstanding performance throughout the year due to which the stock has soared more than 50%. The global leader in integrated silicon solutions, which manufactures chips would benefit from the introduction of LTE in China by China Mobile, and by supplying its chips to Samsung for its smart phones. Looking forward the company is even more optimistic about its future prospects.

Quarterly review and prospects

Revenue for the fourth quarter was $932 million and net income stood at $0.29 per share. It was mainly led by the company’s storage business, which increased 13% from a year ago period. MarvelL has various growth drivers under its sleeves due to which the company is optimistic for its future.

Marvell’s HDD business is quite a performer, and is witnessing an increase in demand from its customers, due to stabilization in the global PC market. Also, Marvell is seeing strong demand in the enterprise segment and is gaining market share, through a HDD customer based in North America

Talking about SSD, Marvell is surging ahead in this, with a double digit revenue growth last year. The company saw strong year-over-year growth in its PCIE and SATA based products. Marvell is working hard to sustain this momentum, consequently it has introduced two new high-performance SSD products, and many more are in the pipeline.

Its mobile business weekend in the fourth quarter, due to delay in the product launch by certain customers. However, driven by various factors the company expects mobile demand to get back on track in the ongoing quarter.

Growth drivers

Marvell is seeing demand for its LTE products from several customers. The chip maker is targeting the high-volume part of the LTE market by providing 4G solutions for platforms in the low-cost segment of the market. The company anticipates immense opportunity in China. Marvell is already engaged with multiple customers for its 4G LTE solutions in China, and it is bagging strong orders from customers in this region.

Marvell will also benefit from China Mobile’s LTE rollout, which is going on at full steam. Since China Mobile is expected to spend $13.41 billion by the end of this year to roll out LTE in the country, Marvell will benefit as more LTE phones are launched in the market. This is a great opportunity for Marvell to capitalize on this market by supplying its LTE chipsets for use in Chinese smart phones, as it has been supplying chips to Huawei.

Recently Samsung chose Marvell’s ARMADA Mobile PXA1088 Quad-Core Platform for its Galaxy Win Pro Smartphone. This was a key design win for Marvell. After Xiaomi, Samsung is the leading Smartphone sellers in China. According to statistics Samsung had 21% of the Chinese market in last November.

Marvell anticipates that its LTE technology will be used in Ultrabooks, tablets and smart phones in North America. It saw weakness in wireless connectivity because of the decline in the game console business. However, the company’s connectivity business outperformed with 15% growth as compared to previous year.

Conclusion

Marvell has a strong product line to support its business, which is backed by its customers who are leaders in different segments. Because of this it has an edge over its peers, and looking forward Marvell is positive to tap this huge market. Considers all the above mentioned factors Marvell seems to be a good investment option.


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