Marvell Has Checks in Place to Be Sure Chip Demand Is Authentic: CEO

Growth in chip demand continues to “outstrip increases in supply,” and as a result, “our delinquency has continued to grow,” said Marvell Technology CEO Matt Murphy on an earnings call Thursday for its fiscal Q3 ended Jan. 29. “We are working closely with our suppliers to secure additional capacity wherever possible.” Marvell has safety checks in place to be sure the heightened demand is authentic and not the result of customers trying to hoard product, said Murphy. “We have a very rigorous internal review process” that includes “very good end-market data,” he said. Marvell also has “a handful of major accounts that we go very deep with, and given the system-level nature of what we do, we have very good insight into what they're doing and what the needs are,” he said. Layered atop that is an “engagement model” with key customers, in which orders are “non-cancelable,” and “reschedules are limited,” he said. “We've gone through a process to make sure that as we schedule the backlog and we get bookings, it's actually what people want, and then we prioritize around that,” he said. One benefit of the semiconductor “crisis” is that it has brought leaders in the chip industry “even closer” to their OEM customers, he said. “My interactions all the way to the CEO level of our major customers is another way” to be sure the elevated demand is authentic, he said.