In the previous part of the series, we saw that Marvell Technology (MRVL) had reported revenue growth in fiscal 2Q17 after five quarters of revenue falls. The company’s broad product portfolio is divided into three segments: Storage, Networking, and Mobile & Wireless. We’ll look at each of these segments in detail, starting with Storage.
Marvell’s Storage portfolio comprises HDD (hard disk drive), SSD (solid state drive) controllers, software enabled silicon solutions, and converged storage processors for the enterprise, data center, and cloud computing businesses. It’s Marvell’s key segment, contributing 44% toward the company’s revenue in fiscal 2Q17.
Storage segment’s financial performance
As seen in the above graph, Marvell’s Storage segment’s revenue fell significantly from its fiscal 4Q15 level as the demand for HDD fell last year due to the fall in personal computer sales.
However, things improved in fiscal 2Q17 as Marvell’s Storage revenue rose 13% sequentially to $275.6 million. Its revenue rose due to increasing demand for HDD SoCs (systems-on-chip) and SSD controllers.
HDD suppliers Western Digital (WDC) and Seagate (STX) also reported revenue growth during the same quarter. Rival Broadcom (AVGO) reported flat revenue in the enterprise storage segment during the quarter. All three companies expect strong demand to continue in the current quarter.
On a YoY (year-over-year) basis, Marvell’s Storage revenue fell by 10% in fiscal 2Q17. Overall, the HDD market fell, but Marvell didn’t witness any significant changes in its market share, indicating that its revenue falls were due to demand weakness, not competition.
Storage segment’s guidance
Marvell expects sequential demand growth to continue in fiscal 3Q17, thus driving the Storage segment’s revenue. Broadcom expects its enterprise storage revenue to rise in the low single-digit percentage range on a sequential basis.
Marvell’s Storage segment’s growth strategy
Marvell’s new management is focusing its broad product portfolio on its growth segments. As part of this strategy, the company will focus its HDD product development on enterprise and cloud applications and will increase its exposure in the SSD space. Even Western Digital has increased its exposure in the SSD space with its acquisition of SanDisk.
Next, we’ll look at Marvell’s networking segment.