A Better 2012 for Marvell - Analyst Blog

By Zacks Equity Research,

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The holidays are over, but the party time will likely to continue for ace integrated silicon circuit maker Marvell Technology Group Ltd. ( MRVL">MRVL ). The company has a series of new products waiting in the wings. Plus, it has bulked up with a strategic tie-up with leading search engine Google Inc. ( GOOG">GOOG ) and a newly acquired entity namelyXelerated AB.

Marvell is now offering88NV9145 PCIe (Peripheral Component Interconnect Express)SSD controller. The88NV9145 controller will provide a core building block designed to create nativePCIe SSDs in flexible configurations that incrementally scale in cost, capacity and performance.

Marvell is also introducing anotherPCIe SSD controller, namely Z-DriveR5 , in conjunction with OCZ Technology Group Inc. ( OCZ">OCZ ). The Z-DriveR5 will expedite performance, reliability and endurance while reducing the cost to deploy high performance solid state storage systems in the data center.

In a separate development,Marvell announced that its ARMADA 1500 HD Media System-on-a-Chip will be featured into Google TV.Marvell chip-powered Google TV solutions will enable powerful products to be brought to market at attractive prices.

Last but not the least,Marvell announced that it completed the acquisition of Sweden -basedXelerated AB, for an undisclosed sum. The company is a developer of network processing and Ethernet switching chips for a variety of telecom equipment.

Xelerated's portfolio of network processor and programmable switches complementsMarvell's existing product portfolio and will thereby helpMarvell to compete with rivals such as Broadcom Corp. ( BRCM">BRCM ) and EZchip Semiconductor Ltd. ( EZCH">EZCH ).

Marvell's reported a mediocre third quarter 2012 result with earnings per share and revenue falling year over year. But the strong mobile and wireless business performance and continuous sharebuybacks were the positives of the quarter. The fourth quarter guidance reflects mostly the adverse effect of the Thailand flood. But we are pleased with an improving demand situation in China and new product adoption.

Stiff competition in the semiconductor market from major players, such as Intel Corp. ( INTC">INTC ), Texas Instruments Inc. ( TXN">TXN ) and LSI Corp. ( LSI">LSI ), significant number of pending lawsuits, higher material costs and the company's European exposure will remain as concerns. However, we feel that new product launches, association with Google and synergies fromXelerated acquisition could give the company's shares a boost.

Currently,Marvell Technology has aZacks #3 Rank, implying a short-term Hold recommendation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BRCM , EZCH , GOOG , INTC , LSI

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