Marvell Industry Analyst Event
The Six Five team discusses the Marvell Industry Analyst Event.
If you are interested in watching the full episode you can check it out here.
Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Patrick Moorhead: Yeah. So, let’s move to the next topic here. The Marvell Industry Analyst event. This was, let me just say, the best industry analyst only event that I’ve been to this year, it’s like the Academy Awards, for the 12 people who still watch that, where they get some of the best movies at the very end. It’s what makes a good industry analyst event. Well, it’s one day. You get access to the most senior executives, including the CEO and the COO, and maybe they sit at your table at dinner, incredible food. It’s not just about the CEO and the COO or the presidents, all the GMs show up. It’s educational, summaries at the end that are consistent across all of the slides, getting customers up there that you can ask uncomfortable questions to if you want.
So first of all, hats off on a great event. This was not about news. This wasn’t about the big news. Dan, you and I follow the company so closely, we understand where they’ve come from. I think this was more getting all the analysts up to speed, but also putting out some here’s what we’re looking at. So I see strength in the custom ASIC market in a lot of areas like smart NICs, cloud partnerships on AI accelerators. They set it without saying it. In fact, they put up some slides that clearly indicated they have design wins, but they also have designs in manufacturing. That was a huge deal.
We saw also, we had their CTO got up on stage and talked about the future of AI in high performance computing and the value add that Marvell technologies could bring to the table, particularly related to CXL and moving data across accelerators, but also the required memory footprint that it takes to pull off these applications in the most successful way possible. I was very impressed with the way that they showed just how far they are ahead in working with TSMC on three and five nanometer. They literally are the vehicle for big semis, and that’s not including Apple or Qualcomm on this. What do you get when you’re first to market with a new node? Well, you get typically lower cost per transistor, even though it does cost a boatload to get out there first. Also, by having a smaller wafer or a wafer you can pack 30% more transistors in the same size, you get higher capability. So, higher capability at lower cost and lower power are not bad things in semiconductors, the last time that I checked.
Daniel Newman: Oh no, they’re not a bad thing at all. Pat, you called out a lot of things I think are really great. Over the last year, we’ve both been on the record, we’re not Marvell fan boys. But you can’t argue with some of the data. First of all, I just want to give a shout, you talked about the food and I think it’s worth pointing out. When you’re going to lock us in a room for 12 hours and pound data across the screen, make it good. I think Marvell did a really nice job of that quick action packed TED talk style interactions with more than a dozen of their executive VPs and senior execs, and also customers, which I thought was great. We saw customers, we saw partners, which I always like to see that it’s not just about them tooting their own horn, but actually hearing customers like Nokia and others that showed up there and actually told stories about why they’re partnering so closely with Marvell.
The second thing, the dinner was great. The CEO, Matt Murphy, did come home from being with Joe Biden earlier that morning to hang out with us. So, we really did appreciate that, and Matt’s been really gracious and he has always been gracious with his time and he was one of our keynotes here on the Six Five summit last year. Hopefully he’ll be back next year. Chris Koopmans came on stage, and I just want to do a little macro dive real quickly. I’ve been thematically and almost obsessively talking publicly on the record and on TV about how important it is for companies to be at lower exposure to consumer if they want to be able to wade through this next couple years of market volatility. Well, he came up with a slide that basically showed their 2017 versus their 2022 performance and then how their revenue is transformed from what it was to what it is. In ’17, Pat, 62% of Marvell’s revenue was consumer. Do you remember what it is today?
Patrick Moorhead: Yeah, like 12%.
Daniel Newman: God, you’re good. Actually, 12%. This is why Pat’s number one, everybody. Today, they’re 88% infrastructure, 12% consumer. That move by Matt, Chris and the team was, no bones about it, the most important move that was made that has made the company so successful over this last period of time. While the stock has cut in half from where it was at its highs, company’s actually doubled its revenue in just the past two years. It was $3 billion in revenue in FY21, and its annualized revenue for its fiscal year 2023, they expect $6 billion. So that’s just a reflection on how crazy the market is. Double your revenue, make your company more resilient and then get your stock price halved. So, thanks Jerome Powell and terrible policy made by our congress over the last few years. Joke, kind of, no, you have to interpret. Listen to my history, you’ll see where I stand on all this stuff.
Pat, the other thing is just really strong performance across all the categories. The company is really categorized and been very transparent. I remember the first time I was reviewing its earnings, it had these two categories. It was very hard to read through. Now they’ve broken it into four very clear categories and they’re reporting the revenue on it, which I love that transparency. Data center, carrier, automotive, enterprise networking. All of them, Pat, in the last two years period of time are close to or more than doubling. Data center up 2.4 times, automotive, 2.9 times, enterprise networking, 2.1. Carrier is the only one that hasn’t doubled at 1.8. But performance across the portfolio, hard to be upset about that. There’s a reason that Matt and Chris were smiling at dinner and there was a reason we were smiling. They were smiling because of this, we were smiling because dinner was delicious. Good day at Marvell.
Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio