Friday, April 18, 2008
[Originally for Sramana Mitra]
In the previous articles in this series, we looked at Marvell’s product strategy, briefly reviewed the fiscal 2008 financials before dissecting the storage business area. Let us now take a look at Marvell’s position in its Ethernet semiconductor business.
The Ethernet business is yet another strong-point in Marvell’s product portfolio. The company is a strong second place finisher behind Broadcom in this market with a share of around 20%. Marvell’s switching solutions enable voice, video and data traffic for the enterprise networking, carrier access and small office/home office (SOHO) networking markets. This is well complemented by the Gigabit Ethernet transceivers, communication controllers, the YukonTM family of Gigabit Ethernet PC connectivity products and the Link Street GatewayTM products.
The stability of the Ethernet market and the company’s strategy to pick up accounts which will tap on the company’s operational excellence has together helped it grow its market share so far. The Ethernet business area has been growing steadily at about 20% for Marvell in the past few years. I estimate that this business area contributed to around 20% of Marvell’s fiscal 2008 revenues.
Well equipped with one of the most rounded product portfolios in this business area, Marvell is looking to acquire more market share from Broadcom. With some aggressive pricing and bundling strategies, the company appears to have made some inroads into key Broadcom accounts over the last couple of years.
The competition has also widened and threatens Marvell as much as it does Broadcom. However, the competitive landscape is such that there will be design ‘steals’ going back and forth resulting perhaps in a stable aggregate market share for its leaders. So, moving forward, I expect Marvell’s Ethernet business area to grow at about 9%. With the Ethernet business itself growing modestly at 5.5-6%, this translates to slight market share increase. For the interested reader, I will recommend reading my piece on Broadcom’s enterprise networking business area where I have detailed the Ethernet market and the competitive landscape.
In summary, the Ethernet business area will continue to provide another stable revenue stream for Marvell. I do not, however, expect this to be a bigger than average growth driver for the company.