Supply Improving, but Not ‘Making a Dent Yet’ in Backlog: Marvell CEO

Marvell Technology was of the few chipmakers last week to cite recent improvements in the supply crunch, with more expected in the quarters to come. Marvell’s revenue for its fiscal Q3 ended Oct. 30 soared 61% from a year earlier to $1.21 billion, above the high point of its $1.18 billion Aug. 26 guidance, partly because supply in the quarter “was better than expected,” said CEO Matt Murphy on a Thursday call with analysts. “We expect continued improvements as we move into the fourth quarter and next year,” he said. “The additional capacity has better positioned us to catch up to the growth in demand, which so far has outpaced increases in supply.” Procuring supply “remains the highest priority for our operations team, even as the supply expansion comes with an increase in input costs,” said the CEO. “Each time we've secured additional capacities, we end up, in a lot of cases, having to bear a higher input cost. That's been part of the drill as supply has come available.” Though supply “has caught up a lot” to demand, “we still aren't really making a dent yet in the unfulfilled backlog that's out there,” he said. Q3 revenue in Marvell’s carrier infrastructure business grew 28% year over year, “driven by our 5G products ramping at multiple customers,” said Murphy. Marvell forecasts 30% quarter-on-quarter growth sequentially in the segment for Q3 ending late January, he said: “It's exciting to see the step-up in our 5G business, and we expect significant additional growth over the next several years as 5G adoption continues to grow around the globe.”