Marvell Technology (MRVL) 2 Dec 222023 Q3 Earnings call transcript

Good afternoon, and welcome to Marvell Technology’s Fiscal Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr.

President Relations. Vice Senior Saran, of Investor Ashish Please go ahead.

everyone. Marvell's call. third you, and fiscal to afternoon, good earnings Thank quarter Welcome year XXXX

Joining Murphy, Jean me Matt and today and CEO; Marvell's Hu, President CFO. our are

everyone remind cautionary with which press our current could expectations. forward-looking from risk today statements, cause to not the include subject and actual statements results me made to today factors filed that our Let which website SEC as update earnings statements. posted are uncertainties well release, XX-Q and contained management's most our on our the and do intend may risks Please to significant and our review forward-looking we in comments that materially XX-K certain filings. differ as We recent

certain our today, measures. over the that, financial Matt? measures call call we financial on our between GAAP Investor to the website. for to of in performance. Matt refer will Relations and non-GAAP our our section With is non-GAAP his reconciliation comments A turn During I'll available

Ashish, and growth our networking In XG the quarter market. gains growing the and year-over-year business end enterprise fiscal XXXX, as record This sequentially. revenue the team by billion, company, good everyone. drove Thanks, of Marvell for to our well as share XX% third was $X.XX afternoon, driven year-over-year in X% and a content auto cloud, and

quarter, in customers widely and Late inventory reductions In the fourth of manage storage OEMs. range, these that our quarter, impact in our escalations. third started quarter. to we communicated expecting towards largest fourth greater and Our an of and third in dealing in environment. manifest the lower forecasting guidance from has out demand Early to the is push our by a customers still quarter, we with and in changing a quarter their revenue shipments set requesting are we inventory The impact to even decline quarter. started orders came reschedule third been are the end were sequential supply in the

as demand has customers down with addition, changing our our products significantly. situation, a their In come deal Chinese macroeconomic for

Just quarter in OEM the in by of our estimate magnitude customers sense fourth China revenue to the that we over you give our from will the to based that compared a X/X second quarter. of decrease change,

of of expect We to company in XX% revenue OEMs China Department impacted announced China I for technology the has restrictions U.S. the shipments Commerce note than our the fourth in revenue chip account revenue. that to less of from U.S. will not would date, meaningfully quarter. of on October total our

it's is with the path change in near correction of to resumption to While them term, an the and closely customers we clear inventory at to manage believe prudent a in fashion growth. our the the challenging orderly work

our product to better-than-expected multiple Let cloud in basis, On revenue me grew on-premise with market, data quarter starting On the markets, end business. our our with end from center sequential with a strong driving declined basis, business. In guidance with was discussing on for a third million, now exceeding data data $XXX cloud year-on-year center. move our results our revenue center revenue data our X% contributing lines all our growth XX% softness to by to due business results. center the

decline HDD the during storage demand Our SSD, saw fiber products, channel, including all quarter. and

switch sequentially, grow by driven products. electro-optics in However, cloud our business and strength our continued to

picture. customers data We their the adjusting growth rate changing are started to address demand and market the of center the decelerate seeing inventory end have

one step and lines on mid- change The in percentage is demand biggest are customer. to the product high a fourth fiscal from As range. XXXX, in basis result, sequentially data our expecting we for removed decline quarter the year-over-year approximately in of are center the to in teens decline a revenue mid-XX% end where we the

demand chain supply bullwhip when effect. quickly, are So the we to exposed more changes

shipments of controllers with to our pronounced the with business, are center the In HDD is a deal preamps, correction. extent in to impact as much be inventory HDD to customers sequential our our OEMs compared projecting adjustments in our our the the large storage lesser of business also a in overall The data bulk storage by we to expect expected a rest which revenue. result, decline of be our a particular, we we reduction data As but most and very responsible deal project for broad-based center business. inventory will

market, third near-term quarter, through we and end in multiple remain into launch ramping production silicon in planning to we wins XXXX. design situation data products XXXX growth our we drivers. center additional optimized in long-term and fiscal our started While year confident the multiple the are work the In cloud

an Our customers. applications. encryption, Marvell's even cloud for Marvell's with data successful in third payment, OCTEON larger authentication cloud LiquidSecurity compliance silicon advanced quarter, opportunities process X is LS platform investments DPU, key cloud industry's adapter, execution of converged the group optimized we security projects, next-generation with solution, of up privacy in cloud. security X the infrastructure, a opening and enabling set management on In and is general most launched and for the HSM and solution coupled Powered purpose ongoing by our packaging technologies first our the IP advanced

capable applications cloud, data OEMs, demonstrating with memory two on the cloud we for initiatives operators cloud pooling. cases: memory this the platform, cutting-edge With center to infrastructure in manufacturers the and new X progress of CXL lifetime. hyperscaler of at memory development Product enable large The In quarter, development platform pooling. to projected multi-host expansion including a advance can in AMD of making in are is and availability CXL their two begin Tier our to key fourth-gen activities CPUs, server excited that also their team of our the advantage substantial a a our and longer-term and full aggregate I'm to significant processors EPYC announce very driving a ADCs. platform this advanced have CXL amount pairs won Marvell's third technology and recently take we use growth and drive CXL swing, program's over multiple design revenue announced technology. enabling started are DSPs operators our broader per We latest powered to cloud we In cable and adoption which growing expect to active market. AC expand pave pipeline to PAMX XXX-gig of operators, cables have CXL Marvell way the data electrical by addressable center opportunities. market, sampling the the lane

to infrastructure wireless to business, Turning benefit our from of continued the $XXX by market. million, was and On vast year-on-year was driven growth XX% which the XG our adoption. a majority year-over-year Revenue basis, carrier growing sequentially. declining X% in end our growth

of run this you for business As year. recall, million second crossed wireless the rate annualized the in fiscal our revenue $XXX quarter

We continue that are from growth see excited milestone. to

accompanying business market-leading wired grew carrier and coherent second in a DSPs than down metro On long-haul basis, expected Our more and quarter the and our came a demand business. from for from and offset as year-on-year third business strong sequential our our very also drivers. driven quarter by TIAs from wireless solid wired growth

are of to including are to U.S., flourish and geographies, and continuing India. in deployment XG to We XG business the see multiple broader looking Europe forward excited our

in in DRAM share significant ORAN content architectures. new growth and anticipate we addition, ahead In and opportunities

cutting-edge be using will demanded manage chipset will of develop allow an our March infrastructure dramatic further announced on together acceleration including week, increase and Marvell's portfolio. data range Nokia recall, Nokia a XX and technology. multiple transport to new energy chipsets. XG's companies XG XG advance their of the hardware our rapidly further to XG DPU, generations silicon the ReefShark and in industry's of with platform will expand operators traffic processors silicon custom scale collaboration and we started XXXX, These you in efficient high-performance leading X-nanometer cost our Nokia's Marvell reducing Earlier that leading and As announced and architecture processor to innovative this to while highly service-based the performance have Nokia by built OCTEON working and processors consumption. extension

latest In development, and for accelerate Open areas. the from with to dense Vodafone capability with boosts Europe. technology expand ReefShark work to reach plan designed the networks. another across announced and many are specifically Samsung into parity chip Open are RAN the jointly servers. continue accelerator systems Nokia of performance Vodafone They radio to RAN to mobile Marvell. they Nokia Marvell also next-generation their a ecosystem. announcements processor RAN Open RAN on massive MIMO Fusion XG collaboration they platforms. and also traditional with have cooperation The that recently compliant OCTEON look our two XG us, adoption Open that urban There forward performance agreed subscribers in processing enables announced with serve developed Open We specialized to off-the-shelf and key RAN SoC solution enable Nokia's functionality Developing on to Layer-X full to advanced fully cooperating Marvell's enabling with and incorporating

Moving on to next for quarter. outlook our

For the of we on mid-teens are on fiscal percentage our expecting slightly carrier basis market grow fourth and in end to the sequential from year-over-year quarter a a revenue approximately grow XXXX, basis.

market. our third XX% the growing $XXX for on sequentially. to Moving end enterprise Revenue million, was XX% networking and quarter year-over-year

macroeconomic turn As to their the an reduced to realigning customers customers response, cautious we started our demand. due environment. to shipments Chinese with evolving work quarter progressed, reflect In

end are basis. fourth despite year-over-year expecting was In XXXX, from percentage a lower fiscal than As enterprise growth, quarter sequentially on networking our and revenue low the market to strong in single decline the a result, sequential we guidance. the revenue the of digits

year-over-year XX%, reflecting share. content growth and we close at continue to However, growing to higher expect our

XX% X% our challenges sequentially. well the we certain industrial our market. to end third automotive Revenue as Turning and as growing lower notes. to and $XX supply legacy for where continue experience Revenue year-over-year quarter forecast was in was in million, industrial automotive than

in to these business. business expect Ethernet fourth in continuing was auto our Marvell's primarily a our to basis, On basis We auto partially this from a continued to end offset challenges by industrial supply a in adoption growth technology. our driven by quarter. our decline year-over-year market, start of sequential On business, our grow, improve

quarter exceeding achieved business annualized the another million. auto in with milestone Our $XXX revenues third

a of benefit that many design spectrum been And As you wins recall, have have OEMs. a generated lifetime broad substantial auto will accumulating revenue years. pipeline we we over platform of across us

mid-XX% are range our overall auto and expecting in and the fiscal of sequentially. growth year-over-year we for strong XX% the approximately end XXXX, industrial to grow to revenue Looking projecting quarter market, fourth

the X% to for market. consumer declining Revenue sequentially. Moving year-over-year our third $XXX X% quarter and was growing end million,

revenue in quarter XXXX, flat forecasting the are third In ahead macroeconomic decline summary, we delivered year some and results midpoint a year, guidance, mid-single sequentially fiscal in and be basis. fourth the Marvell low revenue this digits inventory in record are progress our projecting of full end to despite Looking of world fiscal quarter to fourth at stock quarter corrections in our the Taking percentage growth fiscal our the on low uncertainty the to markets. of of in the range. the XX% year-over-year we

semiconductor global While we the model, data to the growing immune year not infrastructure. the above focus this slowdown are long-term industry sector, continued finish expect our we revenue and to our on well reflecting impacting

fiscal our cloud, remain we Looking confident auto. forward and next year, the in drivers XG growth of to key

our ramp silicon We that fiscal cloud this continue and the started build in XXXX. approximately expect grow fiscal initial optimized the in will XXXX from million million revenue of in to that in programs aggregate fiscal year half $XXX and $XXX second

and are relying on to enable key incredibly efficient optimized build customers drivers. chips hardware their growth cloud to Our custom these

year-over-year automotive realign business we of businesses we few inventory adjustments our our that Offsetting products expect growth will their of optimized in to a revenue to expect customers fiscal an our as growth programs, cloud extent, addition our In strong XXXX. quarters demand. some in drive this in XG

expenses. continue operating We disciplined to be on

slowed which available to now including focusing the spending hires tightened silicon hiring, for product and we platform, pace X-nanometer on invest of in long-term for success. our time, growth designs. new have future continue We our our At critical same initiatives is

we to into on a have are new customers addition, which In number their products, committed designed executing mission-critical our of applications.

a company, exposure secular Over infrastructure to business with growth the end have we last markets growing multiple years, strong significantly creating diversified transformed with the few drivers.

well I'll leadership built team Marvell have growing we an positioned design of scale, excellence, We've navigate With at engagement. businesses long for to to detail the believe we more strong extraordinary recent products win environment and over the results on that, Jean top call our current outlook. the line and over execution and Our a track strong funnel, are customer bottom deliver a continue we to term. to results turn record with at and

the quarter afternoon, the good of guidance sequentially end guidance everyone. Revenue billion, carrier third range fourth center for from financial year-over-year, provide and Matt, was quarter networking auto XX% and review of at by within the consumer with of driven XX% product for Non-GAAP for X%. outlook was accounted Data market. growing at our start XX% I'll Thanks, quarter mix. growth third our data was and XX% current gross and revenue, enterprise margin our was XXXX. results XX%, gross our a at primarily in fiscal infrastructure margin GAAP then range, X% our of below to of due infrastructure XX.X%. XX% revenue, revenue, industrial $X.XXX

market and and enterprise the Our expected, NRE. $XXX revenue less operating operating OpEx sequentially. growing revenue was was XX%, X% Year-over-year, rate to than declining bonus were Non-GAAP better-than-expected the consumer due accrual by higher and industrial growth. million, auto than our million. lower at guidance expenses forecast. half of line OpEx top lower revenue increased expenses by lower end was than the than were $XXX GAAP

income XX.X% of income our our million operating our rate was another record, debt. interest outstanding expense, $XXX due leverage than guidance Our including million, on the GAAP operating Non-GAAP or all-time was primarily strong operating to $XXX $XX higher interest model. million. higher on revenue, demonstrating was profit in Other debt

per For was than share diluted diluted Earnings line per per the $X.XX. income share growth. third was our revenue guidance $X.XX faster Non-GAAP GAAP year-over-year income within top grew share XX% quarter, range.

sheet cash flow. Now turning balance the our and to

substrate optimize In million long-term During agreements to cash critical agreements. earnings earlier. including capacity our for market in the complex X% generated operations, offset sequentially. to back-end payments line capital continued ramping silicon top call our quarter, by working Matt data or discussed $XXX investments by products million and our we increased reflecting from quarter, to infrastructure strong $XX revenue $XX support growth, including in the our third in the are solutions These the we inventory million

inventory in to change the to demand forecasting continue quarter, level elevated. we the fourth our at are be Looking in we expect

our our We on customers. product five These longer. are cycles most product prioritizing -- focused three to new long of of to have even or ramps support years products

supply we We are starting chain environment dynamic plan comfortable year. carrying higher a fiscal next inventory inventory in on reducing and

from equivalent end our and $XXX the As fiscal cash quarter, of quarter. $XXX million the increasing third by of million was the prior cash

Our total debt billion. was $X.X

was ratio net debt-to-EBITDA and debt-to-EBITDA gross was Our X.Xx ratio X.Xx.

summary, million and Marvell team well, quarter, the earnings During faster shareholders and $XXX uncertain million line repurchases. share million in environment, through an we top growth. third dividends of returned macroeconomic than expansion to very $XX delivering $XX growth in much the In cash revenue executed revenue

fiscal Now guidance turning to our for the fourth of XXXX. quarter

$X.X X%. forecasting are the revenue billion, range We of plus or minus to be in

expenses operating GAAP We to project our gross to We $XXX approximately million. range our anticipate expect our XX%. non-GAAP $XXX GAAP be XX.X%. We margin will approximately approximately margin non-GAAP We in the expenses our be project be gross operating to of XX.X% million.

earlier, mentioned to pace discretionary and Matt slowed proactively our spending As we the tightened down manage have operating of expenses. our hiring

maintain to the through invest cycles growth long-term market continue initiatives. in profitability We executing have and record of proven strong we track to a economic while

ahead fiscal the the of our quarter merit payroll increase the in fiscal first on percentage digits looking high single quarter from increase, to typical employee XXXX, the reminder, taxes to due in fourth seasonality sequentially and tends OpEx a basis. a As to

and to expense, Following Other next that on fiscal including planning be on OpEx is the $XX the approximately few are holding for our quarter, income million. first step-up in at debt level we flat quarters. currently our interest expected the approximately

fourth non-GAAP fiscal X% and of for next We currently increase year. X% expect tax this to slightly expect a rate the quarter to

million. basic weighted be XXX average outstanding And our share XXX million. outstanding will weighted be will We share diluted expect our

$X.XX As the range earnings per in result, share. breakeven diluted of to per share anticipate GAAP we a

in We and Operator, of income range diluted $X.XX. $X.XX, minus share expect plus Q&A you. the please open or the per Thank line non-GAAP announce instructions.

Instructions] Blayne question comes Barclays. from first [Operator Our Curtis with

center, data the understand want a on bit just the maybe little better. moving Matt, I to pieces

storage think bit. I weak been has for a

Chinese as it's was trying the nearline, I'm I that, a struggling weak. with that to guess how I implied think move that And guess open that's big on maybe I overlaps. I well I guess put in what big a the storage. out figure weakness you've pretty number. comment been because to And is think

little Is me? just of is for we that So a what those for any parse way you data more are weak, you a What you talking bit there say -- of on give can China kind two products color when pieces about? within the January? kind better center

Yes. Got Yes. Blayne. you,

reports but see we to nearline, the quarter, China on we a So seen that quarter. seen the obviously really to the weakness, into there been there's the some In out lot the nearline you that's flows about very area. that weakness fourth the the as the first in started when on QX, market of center go there. really one guided weakness into you end We mentioned, that weakness impact data When is pronounced we've there, enterprise in and bucket. hadn't and

overall strength there, most We've while enterprise really enterprise impact hanging the below the elsewhere. offsets QX. had So of to it in for from But customers part. an some was that slightly is been in has the main Chinese

And I just if up. then could follow

of You October, mentioned it well as in also optical is I'm data -- strong actually center you kind comment switching. that think as a in cloud, made said I terms decelerating. you of but was both the

seeing So that? What put on-prem? weakening those can you comment in two still by U.S. Are and strength just together? you just center on data elsewhere? the did weakness cloud you mean Does

question. Great Yes.

So it from let take top. me the

reports at in last fire. for has you It's few be XX% plus you years. digits mid-single something last growing on that over to for if to, you This and the of down in CapEx mid-single if low look on 'XX point kind and year, XX% or maybe been look but first talk the it of digits then depends is who few would range kind the next probably year. been what for So years, the probably cloud see we

that tightening had the their lot we're tightening them started even publicly with growth. they've as this So about. the center, has of the very up And macro these CapEx, you was talking that's built for catch see geared data chain up And deceleration a OpEx. large cloud their to which supply companies, in

decline. seeing And say is I'd product code and extent, data it's process. real But that a those storage into set outside mentioned I well reset smooth lesser earlier. to we expectations, majority they the are the Storage so as broader the reason not That's as the pronounced, sequential of most a much as inventory lines we sell adjustment for center. of

reality. so a is adjustment including not change, say, when that certainly cloud, we expedites that's is And ago quarter thing. a comment, now and bit And how a and inventory where to escalations in work U.S. the it's an a China-specific the That more we to supply we new where broadly. inventory do manage were, environment were seeing together global a manage mired from

And see for so what Hopefully, you're the perspective you to that's looking guide give that for. you was QX. in helpful the

Vivek Our next Bank from America. with question comes Arya of

areas? XX%, of enough areas the should or offset fast what be scenarios it's trying year? of 'XX? the collectively specific Marvell at It if those least the thinking next we range I'm fiscal What's helpful when of not in would correction we three thinking of you of Because three flat for should number. scenarios kind a fiscal growth? business. cloud Like, of believe digit? range. XG, about give you're that inventory and look grow at Can kind see Can to mid-single of kind I is I for grow range areas, about us so growth a other be I about to Matt, understand autos, giving and XX% the sales 'XX be

certainly, Great saying still all Vivek. Yes. frame a it's very And this question, I'd dynamic environment. by

products first through like with then and we've there plus you drivers continued up gain the So switching, ramping articulated, things we the we'll automotive momentum to best next silicon, rolling it's in regions can. new XG, center, that give growth we and point electro-optics, content very that India view whether like the is optimized cloud continuing feel I'd the about ramping grow. additional are say the good data obviously, year that

inventory It's magnitude cycles. best those on What that's couple be haven't positives. that. out quarters cash. So of I I'll We've all probably can but of the like first way year a And the how the three one, that where lot dealing with give next don't of an through. been call a you of would are we and that completely, put investment. some for are probably that We the much base to areas we correction are, we're be and area is of anticipate, its typical That's work consumer. business would in all, offsets color going the the know just to business running typically I

You'll probably see there. some decline

on-premise The little think area. year. wired our data work has And do probably center I in bit next a to another stuff then on-prem is maybe business. infrastructure

dramatically If it's and our we're at actually, current back you areas, pretty all 'XX fiscal in. to in kind you interesting, the grew three year fiscal look, if you 'XX, those of they go look

more a the And perspective, going are a cycle. And the this think off through, I works plus to growth some itself probably trend in growth from those so high of they a in. as were drivers back half, of have have you that or think back to of and inventory again, it up kicking first a of timing weakness big sort where of headwind lot at before level, that, you then

very It versus the moving it's versus year-over-year months positive are high of think of drive about -- we most think growth a the as terms adjustments. going pieces do inventory if I hoping So story, likely just some isn't we to magnitude in drivers But growth. some the just some back the how first of half half. offsets. different as of ago, even those But second for the see been of given believe had still we you three went be certainly can we you

UBS. with Timothy Arcuri from comes question next Our

all of it you Matt, help question. can over-shipping baseline down storage, same what if few a that of and you out, reasonable in the mean, January, kind really handicap add center center must next what $XXX data million under-shipping But in like is be the optimized it's you're look million business be kind maybe seems that of quarter business? I'm If you $XXX you I the and out us net past Can in now. can the figure into next for rate sort year? XX% quarters along help you the headed us per might of it obviously the you sequentially if baseline cloud about just data were silicon in and year. then just wondering, a at lines normalized run that

Yes.

in context, a same think storage. we for the the this quickly. on decline, the than that a time ballpark frame. it I First, magnitude declining of that point we reset And in lot when shows down find that just Even data look can't the back that more a to you're little XXXX, in is

lot has so out, a and to right, you're needs So normalize. come that

minimize effectively we're risk any inventory. be by we're way, to deal building fast math bottom probably we a you've about the excess that's where environment coming that's of to you look got our kind of sort we're the down, But it's is we're out where But right on. sure at what of going with doing, efficiently make I if customers and to how still path the with this base think And figuring of a at. out. just the bit this if is in think quickly working you little clear, dynamic and business and about

timeframe, reasonable. we to grow works really an the a type from run maybe So sometime through, that you half lower the think QX, half the bit higher that's new annualized in kind ramp first Probably designs of there. as in certainly up. in little of start But second rate, and the QX probably and itself then is

Yes, too, say, to -- not I trying bit the The it's issue was people well, storage. stuff got people's guess will issue get to it just -- is because the sounds non-storage other on hold I the not. hands just a it. is like stuff, to little just maybe but trying

as some. code but to is line there is given digestion clear, decline I inventory very in QX of slope that There to curve But going CapEx for reason realignment. and the be just is some it's broader there not -- that very It's is very, center want a come the pronounced, clear, sequential down. -- The be There's XXX% adjustment mean, just major issue. I manageable. I not digestion. storage, from the is right? it's just very But to has on data just in storage QX

Sachs. Toshiya from comes question next Hari Our Goldman with

guidance how market, XG overall, Matt, 'XX, that. is think thinking look infrastructure wins. us, you'll revenue QX, if be billion into $X.X a year the business? design are the obviously, doing you've bit wireless? we take you little full of your seeing spots some maybe forward in of that below carrier you you're for the but about business in fiscal of potentially, much To I level as the about idiosyncratic wired? got How think in And much softness I year, set is how that

your thinking cyclical about on And you we be business wired So just side, what dynamics, the of are given into expecting the should decline then how there? fiscal sort 'XX?

I'll Jean. is start and this Toshiya, answer add. can to this then question, Matt

already So half. We wireless had running, wireless $XXX more than rate. first, run infrastructure, the annualized is already on more carrier revenues the about talk than million

definitely is small wireless than half. So

well the and marketplace. customers Going to very strong Matt do to we in into earlier, next our continue adoption see as continue mentioned XG year,

wireless do expect we have the a into continue business of year. So to the will part very next strong growth

is Matt side what Of discussed. the course, wireline

headwinds Matt, to see add? the some we carrier expect to going infrastructure But do anything are wireline to to you on side. We want overall, grow. continue

be exciting, think next that No, I wireless good opportunity I that and it just wireless think it's pin a I I the very to perfect. for a to continues very going put be on year was mean year.

Our from comes next BNP question Paribas. Karl Ackerman with

I questions, networking. discuss first to Jean, or if Two I Matt wanted may. enterprise

know some I said ex-China, was impacts of little think this OEMs how have spoke segment about bit. area some still most spoken China you quarter, I was a about that But You But orders. And that growth? last are you constrained. moderating that your networking seeing an

still want And -- get 'XX? a of amount networking that enterprise to clarify customers of so you of fiscal get going the into have to those sense if true. inventory that's better kind of And of the demand some if dynamic I tie could in

environment Sure. I'll comments. One has Yes, is few are couple as add on. supply improved. things make don't Jean, then, you And the of a why a going well. definitely

that's weakness we Now some processors, the products. multi-gigabit things select of be Because a can to outside like would of other market our China switches, give the opened Karl, because customers. that. merchant embedded enterprise Ethernet is gigabit, business in up few of These PHYs, that mostly is cases, generally, supply,

So when region, softness helps have that X in a thing. would demand you

the thing. situation our has growth own good well. is We've do quarters. last some the few improved, highlighted So supply We drivers a which this as have over of

done cautious have new probably custom of we next -- are as it has ramping about some piece well. some It in that the We general, non-China for how silicon we're okay. that about weakness year. But being That's wins up. offsetting think

for weakness digestion run still we've about that We there's do Even rolling to of a probably inventory on. bit is through. So content a rate I if guided run think next rate there have safe year. in the is little QX goes think gains some or that to

pieces. some And are the of so moving those

customers we've U.S. new gain. where wins gain got either or or China content You basically going design have share down,

Jean, to anything all to the sort we've guided it want QX. so add? where you numbers And of aligns for

No.

about wondering the customers. -- foundry such terms with of Got your just talk some markets, year, cost the -- that share you if of pass from of onerous forward you're an to perhaps having discussions some perhaps the for a digestion inflation some cost you maybe ability side just of task of suppliers is your can whether it. was they contemplate that's you along inventory as helpful, Maybe that follow-up. with end across limit and to needs that to plan as in end just it to less and think the quick going as the occur foundry that for that No, Matt. you next some you could I there about

say are I'd the say the But areas with, to certainly, over can't would do that cetera, back the worked to to last has more years, still up do what would to the that few still those. mitigate generally we that's inflationary inside we'll that positive. in going coming We're each in we mitigate are our pass extent doing what with -- a chain been deal to we we be loosening few et general, aspects We're and set a us. supply end, manner. getting on you have that we've that, can particularly which up, -- is into continue found do the last a say those. if aggressively team to strategic said, There's type that. for specifics the we supply way more sources going of I costs basically to doing constrained. years, that it on team to Marvell And of are the there being of input Yes. continue without packaging And sort of operations and to towards the I enable margin-neutral agreements.

kind there companies. bit in do still inflation a we're as really supplier so the on both partnerships the manage our of little of be we're sides. good it. a We But job with strategic looking And the cost to base. extent to we sort formed at That's system. and just will how One is of these working probably can't,

And them with environment. manage like communication to we transparent an on counting looks us demand partners the as I'd as what down very with semiconductor overall them on we're through cycle. a have that work We say

with Fargo. Our Mobley Wells next Gary comes from question

that XX% question on last of had the you that know up year. your last to kind be I picks at your your cost expected purchase obligations. haven't is topic, but and of XX-Q of looked are as sold a obligations your the I purchase I goods next filed yet, about

that? anticipate Do inventory softness, anticipate any of you the And possibility utilize all you so write-down? able given the do current sort of being to market

Gary, the Jean. this Thank is you question. for

cycle. and this complex agreement, to last $X.X four from we remember, of very those And change have for manufacturing purchase years. much long purchasing quarter also, are billion. them it's filed. yes, On between term. obligation it's long average, products It's But our the XX very a the will really a So we XX-Q not just have lot about

a the long customer, thoughtful. portion dedicated very need. been So last end support of need cells, need largely team Regardless complex actually and capacity the for those our secure single the the of back in time. for we those what capacity frankly, our substrate volume, to products we customers, we We large environment, economic capacity. has only dedicated And

all. the comfortable. off So write agreement at to not We or we the quite something purchase have we That's have feel anticipate issues capacity. obligations any don't on

mean complex especially you Yes. going to ramping them and just few not strategic and volume incremental agreements X-nanometer really $XXX the cloud-optimized ABS where relative advance. is best is most in next that take-or-pay the we're need high-end literally Gary, years. LTA, which from all in the in get that form I'd the to I years silicon the as which And example, have, the bundle I very substrates aspect really you absolutely if -- packaging, in some term, advanced of of that would that said, because are as is different total. secure things take to vendors, the very be Those we substrates, the place million get of technologies, the to the one others look we That to technology using it back. of in advanced capacity, are the customized packaging. put wins. we capacity prepays actually just need take in in we the shorter of obligations portion add, say large like as most the this The actually Jean of at

we've types they're that things, so good and tied committed about because feel we those programs. And done to of directly

So And necessary to to while we're capacity to and actually how future Jean them supply customers our a message our their helps overall, a able it for strong -- about obligations, underwrite we chain think said, for benefit certainly we're able they're send as success. us, the and future. us have we to provide

question Ross next Bank. with comes Our Deutsche Seymore from

you Could of two-parter us, looking you third Matt. set or constructive all center cloud million data things, was optimized to less of million being quarter about storage? level that percentage at a pushed just that guess than the happening $XXX customers at I what's on consider? fact the are what's at on that business what side, conservatism level of growth kind themselves, your something next a level center side forward that confidence the Is And data back then all that revenue year? the kind you out? of talked $XXX in worried being should that deceleration more the of going about cloud in Given a we incremental

Sure. Yes.

first. year even achieve thought, remember, it next gotten Let feel million and went is had answer actually gives additional stream. of would about that to buffer million Ross, a actually $XXX-plus some a think call had wins one comfort that. have I me answer we the around $XXX business one that million from million Part as good revenue because $XXX it for if we second little what about that us created the The about, the hedge don't we of quite and because volumes it, we talking very talking is, if we additional we bit you $XXX-plus design well

say So are all I track. -- but programs the on would

we're products down we their now in volume involved environment, next we're very take possible to fortunate everything need I that these are our We that meeting And are absolutely to in out I'm despite there. customers get with head ramp year. personally say to and significant would ensure the to in schedule, trying right doing multiple changing up new

The think So of question I good that's are what news other that's was percentage And -- storage? that's think was percentage programs revenue on the I data that track. center the the your in thing. still a good

around, XX% the if for had storage you headwind business data center? is way center, just Other data in set your to or storage of people, level falling roughly in

data for you. general, -- our it's with the way maybe Ross, probably as that's help through I center particular think to But the drop can correction. Matt about a of storage data Yes, mentioned when X/X inventory going Yes, business, I business; this, inventory the you center the not go total of to correction, the help right, we average, be about earlier, can In quarter. course, that. largest piece

Harlan question next Our from with Sur JPMorgan. comes

about networking, your you've If back optical speeds. very your innings at Most the because look trying higher still was cloud segment, grew Granted, gig cycle. customers networking this performance slowdown, these a of of still which solution. was about impact pronounced business. And Matt, in center specifically storage, early through but the do compute, got better connectivity got it nature on products is segments cloud you upgrade spend your DSP, both combined But talked part optical you of right? cloud XX%, CapEx obviously XXX, in more as spending your have which also on last in in data looking enable I PAMX XX%, is muted strategic to the XXXX, XXX color overall well. the at you've are

particular Near into next in in two products? and issues then the team looking dealing these year continued of the questions. kind guess inventory term, is with optical? growth optical I cloud So see And team

we're new well I to grow. from be And to would per the think again, because in your bit you're as we on and going quarter, few question. it's which to that's say way, next gig. curve. is switches, little said, seen strong for overall in to XXX you're in part strategic, anticipate XXXZR that But fairly associated fourth is thing. optics then And high-end still the year. -- that second. continue point, platform. And adjustment Yes. going because being optics gigabits next development I That so than is product a of XX.XT moves strong down an hard XXX the where new being inflection for that shorter-term technology, momentum adoption going there a the heads said, years of with Great. area. up of see that need per the by optics would we We of expect Harlan, right, to Thanks, We've second in the grow a a That really ago we in X.X situation was terabits that, nascent different the to ramping it generation

an that's we new development have. ongoing product so And activity

little do area. of good different has it's more just but broad activity feel about bit XXXX that So there lots in we exciting, adoption, of a a than environment but it. Super because been

Our with question from next C.J. Evercore. Muse comes

I thinking Is business billion hoping slowdown. was guess, trajectory and for of side and parse the of Matt, I networking 'XX? roughly about enterprise non-China a to time kind into China the there fiscal the between you're China to you all how of about a year. of January house, little $X.X calendar and bit talked the And on way spend a

very down on The ripples higher question. the I'd of through. The lot, how gains from That tell, non-China that's where that and good ramping long a a there bit -- just right, products indicated, going are hard a little well. based end up being with It's as what's ASPs. as ago. have just holding may new is the china -- well up say bit that's up on last we and content has was QX as to a that an Yes, how in to quite two the Again, quarters overcorrection. it been frankly, little we on going

enterprise I front factor. of at But channel it's And of offsetting I down here. have handicap the for to goes just fingers so China. the -- numbers through the be lot will extent. in of non-China percentage networking that's the next had than if this of yes, it other But total those A sort have numbers in fiscal 'XX -- some the of guiding QX, and for of don't China me. What it's because tip I'd just my don't exact say it bigger to still I are year, overall, a we

question Christopher comes Rolland Susquehanna. from next Our with

I carrier as follow to on wanted up well. infrastructure

agreement associated was first I into all, the and that? Nokia there. with extension things. your guess, out there's economics looking of So a then couple any of secondly, with wondering if I And be for winning XG, overall? as next going this talk to look there like about opportunity does more well. year, Samsung the Nokia there What a India, sizable growth? lot there's winning, Is

Yes. Thanks, Chris.

with Layer-X Recall it see it's initial well how transport the front, led see they And again, great processor. being broader Layer-X was to able very them baseband -- announce that the was us processor. with now to I great has to that and a them, which to the on On Nokia engagement. successful, think engagement was our partnership did

Layer-X followed roll component, transport as And fairly so of as is you the forward. content probably space, a you critical sort the CPU or know, with you right, meaningful

And are positive. I all customers up gearing of advantage rollout well of So I on next key few positioned very year. aggressive And very India, think, to think that's -- our a take that seem be your they for to a that ramp. to point,

think guess. said we I as sort why we And more deployments. that's probably probably as but our my would content regional India be -- good I so on And even be the earlier, really gains will well of think feel wireless sizable about our both next year,

Svanberg next Tore question comes Stifel. Our with from

I'm you the Yes. next mind, question to that's to a quarters. And going two ask not don't if related

So it -- does and parts. have two

potentially probably here maybe bit. seem time because that call, few lot revenues for pull that years, a to little be could does not to that of you last that standard, reason CXL. adoption of on So first UCI-Express the the potentially of is is all, the something talked The timeline accelerate contributing about CXL the activity but there I'm asking could in a

Yes.

the tory a may think in by we call I a the going gated well are have lost CXL product underway area, think win we I which And lot companies out gearing my for in this server cycle. I of called remarks to up gotten but that CPU in development. terms be out prepared significant noise, that timing, the that. is pretty received in and design of had we're now did It

a say merchant I'd semi-custom that then large So as -- products there's and as of pipeline a product. very behind well

any necessarily. a a I we're leadership ramp some for that think a I area our adding. get you devices, don't change new building -- of on high us. activity security -- of They multicore visibility products those focused things when be of is to CPU. very in lot is larger strategic level I'd I activity And very have as would with these especially few sort continue to of still terms are, They're the A wouldn't customers. cases, But there. So But There's these have have that in into products, features. pooling quite we X-nanometer. accelerators, say position in it's

advantage ASIC they whatever really these And interface very to are like take and of SoCs, want GPU, more with then CPU, new their these you customers so XPU enable it, relative completely to architectures memory. which customized call how looking more to

a of going I be a large And getting good continue a so thing. underway focus. strategic to And very that's is think and area win to really committed

this of the related was product, the And you second mention Great. your earlier. question did part new to and

see So we from next Marvell out? get AEC? to Or some should years that AEC, year? Is also to few a sort revenue when could expect some of start you revenues contribution already

Tore. a I taking that think time. we a We're step need to let one that at play out one little bit,

that take to and it. real. part The hope AEC we exactly in that we'll I of our And competing important have a year, and that cable we juncture, But last market. do think we've across be sized a And in are very customers we of trend the to an getting proven the timing. is we've job due as we level largest haven't companies, those, course solution But better very high anyway. in there. lining sampling great suppliers to of really the designed the our of hyperscale a and done this now array started interest. was milestone really up trend opportunity visibility get But really our is over high-volume broad this the at

Ambrish with Our comes BMO. from next question Srivastava

to back for come clarification to wanted the just I Jean.

there of now at other reporting, I in last up. of number Inphi. that segment $XXX the it business? quarter, a there $XXX would $XXX million $XXX had that center cited, see a the Is And I business you in just or Looking number before is data without some Inphi number the quarter large reported with you recent the chunk mean the given that a you seems I'm storage something then X/X million component of million missing really and changing low. rounding and the million,

Yes. recap Yes. Maybe let me clarify. just and

I $X.X is reporting, business run billion. think before storage annualized we our rate change about the

what So business. we you change market. mentioning that's end overall That's what the by our are before storage reporting

flash it includes as channel. and Just controller a reminder, fiber also preamp

So is it's several when number And included look storage quarter. lines generally, a mentioned, all the not different I has there. The storage you particular the product more down. it's last at average, come It's time, quarters, X/X over on X/X.

revenue you definitely half first billion XX% higher is much told talking right? what The That's now about and we in center. during I'm investors much Day. our $X.X Investor is data think storage it's lower, about about, When

how So hope you pieces. different clarify that's

No, Yes. does. it

So $XXX right? $X.X million, down billion that come it's means to annual from run rate

you I don't that. think way billion. about the $X.X think can It's

Yes. it low. was rate. higher run year, this now than annualized of probably right? probably second very half is The lower, the And first of half dropping billion The much run $X.X it's much rate

it. Got

Okay.

for had I Then helpful. very Matt. follow-up a is That Okay. you,

storage, don't quarters business. and for in I the but the storage at throw in then bullwhip Seagate consensus WD, Looking row follow down three distrib effect. has mass a quarters you guys, two been the And

couple is it those effect real yet. bullwhip way timing right center And data earlier business bigger Is no within businesses much So When businesses less, that then other than guys modeled. those seeing because terms that right, magnitude a consensus the clarification is terms before -- comes do the not storage. just back? when in impact quarters the you're in has a of this of thanks of that for

we sequential December, should a all modeling past combine declines? quarters you of if of that, So be couple

Yes.

break me that let two pieces. So into

-- we've It's to have slap historically the And it in more and where removed, just additional when works. I kind just you where on and ours, bullwhip you the one kind seen we that. I way you think you business any would nailed could right? volatility, customer and of their mean you step absolutely trajectory why effect. is be versus you're of kind that's that exactly talked the the actually draw can end of about it tend this dynamics bullwhip

Ambrish, but non-storage couple quarters So it's expect. a past and -- with you -- scenarios other through on view, And on keep we can work landing we've price that, you of piece, that. manage the which or in I in digestion. we different then exactly, think, very to way. later probably know when it's just kind of a experience, work anticipate the again, you how career And hard a inventory is you I've piece, I don't then which was on mean yes, through drops my of when demand and soft can manage kind the volume pay people and you shipping and been here can a taken

I mean And is having view to times as through more and going actually inventory your get can let's environment. that to down know get normal, you're somebody to also a orders, And normalized of a your point The forecast better you forecast so accuracy that and this has our turn as up behind goes you get you well. -- where off been, worst gives if improves. it get you visibility us. as old I XX get lead you're weeks and think

what do So we're that's striving really to there.

normal trajectory. given inventory some the new the have slope fairly CapEx is there while it's in in adjustment, ramping. products shift so And we And

a way environment. through see I And it's probably little Like as have we'll a timeframe. still fairly works said, so well. to its the dynamic of exact bit quickly that But

with wrap one have we more? for up comments? do Should just time I some closing Ashish, it

Yes. Go up, it ahead, Matt. wrap

for everybody, questions. thanks, Well, Yes. all the Perfect.

revenue, of of margins. that few about quarter I XX%. bit this if kind in middle of for But sort earlier. here. compare A year year you and at we of a as some sort obviously lot close severe take was operating little to And our at the companies large peers, strong Look, record look and half digital a mean second X%. other rest Even digestion I you of we're group fourth the market, we think you about first, guide impact QX down very delivered pretty the this a we're ago, of a environment. a peer in of Just of us. look seen comments inventory when have macroeconomic up quarter the of QX, great is

a So managing forma And well even it's we a top 'XX still grow QX about continue with about The from disciplined XX%. to increase, look also I'd at will say softer we we've pro very been OpEx guide, perspective. think line expenses. perform on XX%. if our FY you

revenue together last put team growth. to about half years. operating gotten expenses been the world-class as basically these over And rate execute we've the we've of at massive been to few wins a So able a we've on growing result design

And we're gave model ability spending, size to I believe to our execute, be the good on have if we customers And about so of Jean OpEx. more the of going We you and very while the to and are in that, even the resources which do our sort disciplined we come. there's the counting team, feel on.

really strong the continue communications to opportunities And in cloud, the well markets. Marvell largest think positioned industry, So of the customers. conclusion, we continue partnerships wireless is the right in and the with drivers of extremely automotive We three to with and have we're growth growth semiconductor there. in XG strategy key be right

the all sure for lot be helpful There's for questions. so thanks of callbacks thank much as the I'm we can pieces. well. your more a So time moving But today. you in

concluded. now today's you Thank for has attending conference The presentation.

disconnect. You may now