Oct. 27, 2014, 10:29 AM
- Bloomberg reports Microsoft (MSFT -0.7%) has a test version of Windows Server that runs on ARM (ARMH -0.9%) server CPUs. Currently, Windows Server only runs on x86 CPUs, primarily from Intel (INTC -0.7%).
- Windows Server support would provide a major boost to the fledgling ARM server CPU ecosystem; software support has remained a question mark for it even as the likes of Dell, H-P, and Facebook gave their backing. OS support would still need to be followed by app support.
- AMD (AMD +0.4%), Cavium (CAVM -1.3%), AppliedMicro (AMCC -1.8%), and Marvell (MRVL -0.6%) have each unveiled ARM server CPUs, while often promising better power efficiency than Intel's offerings. Supporters have also noted the potential for ARM-based parts to be optimized for specific tasks (security, storage, networking, etc.); Cavium is among the leaders here.
- Intel, for its part, is countering with both low-power Atom server CPUs, and more power-efficient versions of its mainstay Xeon server CPUs (such as the just-launched Grantley). IDC estimates x86 servers (largely running on Windows Server of Linux) accounted for 78% of Q2 server industry revenue.
- Providing ARM support for Windows Server would fit with Satya Nadella's strong interest in broadening the device/platform reach of Microsoft's software and services.
Sep. 26, 2014, 5:38 PM
- Intel's (INTC +0.4%) deal to invest up to $1.5B in a Tsinghua Unigroup holding company that owns Spreadtrum and RDA Microelectronics will both help it better penetrate the low-end Chinese smartphone/tablet market and allow it to sidestep antitrust regulators, thinks Rosenblatt Securities. Chinese regulators have taken aim at Qualcomm and Microsoft, among others.
- Rosenblatt doubts the deal will have a big near-term impact on the mobile baseband market, but thinks it could be a long-term negative for MediaTek and Marvell (MRVL -0.7%), both of whom have sizable low-end Chinese shares. Spreadtrum/RDA foundry partner SMIC (SMI +1.4%) is seen as a possible beneficiary.
- Wells Fargo observes Spreadtrum had a 16% Q2 baseband share (#3, behind Qualcomm and MediaTek), and that its Chinese share is much higher. Spreadtrum's 3G baseband share was at 11%.
- On SA, ex-Intel employee Ed McKernan argues a strategy of providing Atom mobile CPU designs to 3rd-party processor vendors (such as Spreadtrum and Rockchip) could help Intel narrow its huge mobile losses. The chip giant is keen on using its manufacturing process lead to bring Atom to newer processes before comparable ARM-based CPUs arrive.
Sep. 24, 2014, 10:57 AM
- JMP's Alex Gauna has upgraded Marvell (MRVL +1.7%) to Market Perform. He sees the company grabbing 5%-10% of the Chinese 4G baseband chip market, and also expects it to benefit (given Wi-Fi and hard drive controller design wins) from the Xbox's Chinese launch.
- Gauna adds Marvell's weak YTD performance lowers downside risk. But ongoing concerns about Marvell's baseband and hard drive controller sales keep him from recommending shares "over any reasonable investment horizon."
- Previous: Marvell bulls focus on non-wireless growth
Aug. 22, 2014, 6:33 PM
- Down initially in response to its soft FQ3 guidance, Marvell (MRVL +1.7%) finished the day moderately higher. Brean and RBC lowered their targets, but both maintain bullish ratings.
- On the FQ2 CC (transcript), CEO Sehat Sutardja mentioned both FQ2 and FQ3 sales have been hurt by soft 3G baseband chip demand from a major Asian client (widely believed to be Samsung). At the same time, he noted both Marvell's storage (hard drive/SSD controller) and networking chip sales rose 6% Q/Q.
- Flat to "modest" Q/Q growth is expected for both storage and networking in FQ3. Sutardja states Marvell maintains a 60%+ hard drive controller share, and remains the top supplier of SSD controllers (no specific number is given).
- FBR's Chris Rolland thinks some investors will view the 3G weakness as "neutral to positive," given the business carries "significantly below average" margins and profitability. "At some point, we believe investors will look past the 'distraction' that is mobile and recognize the solid storage and networking business underneath, but timing remains uncertain."
- UBS' Stephen Chin is more cautious: He thinks getting Marvell's baseband ops (heavily dependent on China) to reach breakeven will "remain challenging," given demand is shifting towards 4G phones faster than Marvell can ramp 4G baseband volumes, and that Qualcomm and MediaTek provide tough competition. Broadcom can sympathize.
Aug. 21, 2014, 4:38 PM
- Though Marvell (NASDAQ:MRVL) posted in-line FQ2 revenue and beat EPS estimates, it's guiding for FQ3 revenue of $960M-$1B and EPS of $0.29 (+/- $0.02), below a consensus of $1.01B and $0.32. No explanation is provided in the earnings release for the outlook.
- FQ2 gross margin was 50.6%, +180 bps Q/Q and -140 bps Y/Y, and near the high end of a 49%-51% guidance range (drove the EPS beat). FQ3 GM guidance is also at 49%-51%.
- GAAP opex fell 2% Y/Y to $363.4M (compares with a slight revenue increase), with R&D spend nearly flat at $294.8M. No buybacks were carried out.
- FQ2 results, PR
Aug. 21, 2014, 4:08 PM| Comment!
Aug. 20, 2014, 5:35 PM
Jul. 8, 2014, 11:28 AM
- Following checks with Japanese hard drive component suppliers Nidec and TDK, and research firm TSR, CLSA reports Seagate (STX -0.9%) is cutting its Sep. quarter forecast for industry hard drive shipments to ~133M from a prior 140M-145M.
- In April, Seagate guided for June quarter industry shipments to be "down a few points" from a March quarter level of 138M, but to also reach 140M-145M in each of the next 2 quarters. The market has been pressured by SSD cannibalization and weak enterprise storage sales, but has also benefited from stabilizing PC sales and healthy demand from Internet giants.
- Seagate and Western Digital (WDC -1.5%) are only down moderately on a rough day for tech. Seagate reports on July 17, and Western on July 30.
- Other names with strong industry exposure: MRVL, HTCH
Jun. 13, 2014, 9:52 AM
- Two days after Nomura upgraded Marvell (MRVL -1.1%), Susquehanna has cut the chipmaker to Neutral, and lowered its PT by $3 to $16.
- Whereas Nomura is upbeat about Marvell's baseband chip sales to Chinese OEMs (particularly for 4G TD-LTE phones), Susquehanna is worried about an inventory overhang.
- Following a strong 2013 rally, shares have been in a fairly narrow range for the whole of 2014, in spite of healthy gains for chip industry peers.
Jun. 11, 2014, 9:55 AM
- Nomura has upgraded Marvell (MRVL +2.8%) to Buy, and hiked its PT by $4 to $19. The firm is optimistic about the chipmaker's ability to grow its 4G baseband processor sales.
- Better-than-expected baseband demand fueled Marvell's big FQ1 revenue beat. The company has scored a decent number of design wins with Chinese OEMs for phones running on China Mobile's new 4G TD-LTE network, and has also had its chips certified for use on AT&T and Verizon's networks.
- Mobile/wireless sales (inc. Wi-Fi/Bluetooth combo chips) made up 33% of Marvell's FQ1 sales. Qualcomm still claims the lion's share of the 4G baseband market, aided by leads in multi-band support and high-end app processor integration.
Jun. 5, 2014, 9:28 AM| 4 Comments
May. 23, 2014, 5:36 PM
May. 22, 2014, 4:38 PM
- Marvell (MRVL) expects FQ2 revenue of $940M-$980M and EPS of $0.26-$0.30, largely above a consensus of $930.1M and $0.26.
- FQ1 gross margin was 48.8%, -130 bps Q/Q and -580 bps Y/Y, and missing guidance of 49%-51%. That resulted in EPS only moderately beating estimates in spite of a huge revenue beat. Nonetheless, Marvell has set an FQ2 guidance range of 49%-51%.
- Better-than-expected demand for Marvell's 4G LTE baseband processors contributed to the revenue beat. The company recently began shipping products for this market, which has long been dominated by Qualcomm, and has scored design wins with Chinese OEMs.
- Opex rose 4% Y/Y, well below rev. growth of 30%. No buybacks take place in the quarter.
- MRVL -0.7% AH. FQ1 results, PR
May. 22, 2014, 4:08 PM| Comment!
May. 21, 2014, 5:35 PM
May. 1, 2014, 10:06 AM
- Like Seagate (STX -4%), Western Digital (WDC -6.1%) missed FQ3 revenue estimates while beating EPS forecasts. Also like Seagate, it offered light FQ4 guidance on its CC (transcript): Revenue of $3.5B-$3.6B and EPS of $1.65-$1.75 vs. a consensus of $3.72B and $1.89.
- While Seagate estimates March quarter industry hard drive shipments totaled 138M, Western pegs them at 137M. More importantly, the company expects shipments to fall to 130M in the June quarter.
- Goldman notes hyperscale data center owners (Google, Facebook, Amazon, etc.) are getting more efficient with their storage usage, and that this is affecting both Western and Seagate. Seagate is also dealing with inventory issues at enterprise storage OEMs; Western isn't reporting anything similar.
- With SSDs continuing to encroach on hard drives, Western's enterprise SSD sales grew to $134M (+46% Y/Y, still less than 4% of sales) in FQ3, and are expected to outgrow the broader market going forward. Non-PC applications made up 53% of total revenue.
- Western's ASP fell $2 Q/Q to $58 due to.a mix shift towards console hard drive sales. In spite of the ASP drop, gross margin was 30.1%, flat Q/Q and up 90 bps Y/Y, and above guidance of 29.5%. A 29.5% GM is forecast for FQ4.
- $244M was spent on buybacks, up from $150M in FQ2. Free cash flow was $536M vs. $539M a year ago.
- Hard drive controller supplier Marvell (MRVL -1%) is off moderately.
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