Marvell’s Networking segment
In the previous part of the series, we discussed how Marvell Technology’s (MRVL) Storage business is likely to witness seasonal weakness in fiscal 4Q17 (ended January 2017). This will be slightly offset by flat revenue in the Networking segment, which accounts for 23% of the company’s revenue.
The company’s Networking segment supplies ethernet solutions, embedded communication processors, and network processors to data centers, service carriers, campus, enterprises, and digital homes. Its key customers include Cisco Systems (CSCO), Samsung (SSNLF), Huawei, and ZTE.
Revenue from Networking
As seen from the above graph, Marvell’s Networking revenue fell 6% sequentially to $153 million in fiscal 3Q17 as carrier spending slowed. Demand in this segment has been more or less stable as the products have a longer life.
The company expects the segment’s revenue to remain flat in fiscal 4Q17, even though Cisco reported an 11% sequential decline in switching revenue during the same quarter. Rival Broadcom (AVGO) also expects its Wired Infrastructure revenue to remain flat during the same quarter.
Marvell’s $153 million networking revenue would represent a YoY (year-over-year) growth of 12.9%, indicating a better season than fiscal 4Q16. Notably, this YoY growth would be a result of the company’s increased exposure in the enterprise, data center, and cloud markets.
Marvell’s growth strategy for Networking
Marvell is divesting its consumer portfolios to focus on enterprise portfolios. It has agreed to sell its G.hn home networking business to MaxLinear (MXL) for a cash consideration of $21 million. The deal is expected to close in fiscal 2Q18, which would see its networking revenue fall in that quarter as the G.hn revenue is removed.
The company has also introduced its 25 Gigabit Ethernet end-to-end data center solution aimed at cloud and enterprise data centers.
Now let’s take a look at the Marvell’s Wireless segment.