As a tech analyst, I’ve seen enough of corporate highs and lows. I appreciate the drama and strategy of a good turnaround, and the more dramatic the better. Marvell has an interesting tale to tell, having gone through a dramatic yet essential makeover in recent years. I’ve known Marvell since it was founded, back when it was largely recognized for consumer hard drive controller play technology. Marvell hit rock bottom in 2016, when it faced an SEC probe and a $750 million settlement with Carnegie Mellon in a patent infringement action, as well as charges that it was undervaluing an investor’s stock.
Following this, CEO Sehat Sutardja and President Weili Dai stepped aside to make way for new CEO Matt Murphy, a move that has paid off handsomely for the company. Marvell has leaned significantly towards fast-growing, lucrative, and “sticky” industries including cloud, 5G, and automotive during the last five years, with the stated objective of being “the best growth semiconductor business in the world.” This refocus, in my opinion, is what has gotten the corporation out of the sand and back on the green.
I checked up on Marvell’s development this week via the company’s virtual Investor Day 2021 event. While I’m not a stock expert, I enjoy attending such gatherings since they provide a candid glimpse at a company’s potential.
Cloud reigns supreme
Last year, Marvell’s three key growth industries (cloud, automotive, and 5G) reportedly brought in $1.5 billion, up from $700 million the year before. The lion’s share ($1 billion) of this year’s income came from cloud alone; this makes sense, given that Marvell believes cloud to be its most significant and highest growth possibility of the three. Marvell’s goal of developing tailored, creative solutions for each of its cloud customers appears to be working out well.
Also noteworthy was the fact that data center sales accounted for 40% of Marvell’s revenue, which I believe is the largest percentage of any data center silicon provider in the industry. Looking ahead, Marvell stated that it expects its cloud, automotive, and 5G revenue to grow at a pace of 40% per year, which is twice the rate it anticipates the markets to grow. While cloud was the star of this year’s Investor Day, I’ll be keeping a watch on automotive in the coming quarters—it surpassed the $100 million annualized revenue milestone last quarter. That number was zero only a few years ago.
Source : Forbes
