Marvell Tech Shifts Focus to Data Center and AI Chips

• Marvell Technology’s data center and AI businesses are thriving.
• The company’s enterprise networking segment is struggling.
• Overall, Marvell Technology is a mixed bag.

Marvell Technology, a leading provider of networking silicon, reported strong growth in its data center and artificial intelligence (AI) businesses in its fiscal Q3 2024 earnings call. However, the company’s enterprise networking segment continued to decline.

The company’s data center segment, which accounted for 39% of total revenue, grew sequentially due to strong demand for AI solutions. Marvell is seeing particularly strong demand for its PAM4 optical interconnects, which are used in AI accelerators.

“In cloud, revenue from both AI and standard cloud infrastructure grew sequentially, with AI growing significantly faster,” said Marvell CEO Matt Murphy. “Growth was broad-based, led by our PAM4 optical products, Teralynx Ethernet switches, as well as our data center interconnect (DCI) products.”

The company’s cloud business is also benefiting from the development of customized silicon for cloud providers. “Cloud customers remain focused on enhancing their AI offerings by building custom compute solutions of their own, and we have already won a number of these designs,” Murphy said.

While Marvell’s data center and AI businesses are thriving, the company’s enterprise networking segment is struggling. Enterprise networking accounted for 19% of Marvell’s Q3 revenue but disappointed with a 17% sequential drop. Weakness in enterprise is expected to persist in Q4.

“As we have been signaling, we see weak demand in this enterprise market,” commented Marvell Technology CFO Willem Meintjes. “As a result, for the fourth quarter of fiscal 2024, we project enterprise networking revenue to decline in the mid-single digits sequentially on a percentage basis.”

Overall, Marvell Technology is a mixed bag. The company is benefiting from strong growth in its data center and AI businesses, but it is facing challenges in its enterprise networking segment.

Also Read

Australia Utilizes AI in AUKUS Deal to Monitor Chinese Submarines

Australia will join the US and UK in testing a new AI-powered...