Marvell MRVL recently announced that one of its largest customers, Toshiba, has included its hard disk drive (HDD) controller and preamplifier into the latter’s 16TB Enterprise Capacity HDD portfolio.
The Marvell HDD controller boasts Read Channel technology, leading error correction code IP and power efficiency. Moreover, the preamplifier enables advanced two-dimensional magnetic recording technology and supports Toshiba's 9-disk architecture.
The key feature of Marvell’s storage chip is that the HDD controller and preamplifier are designed closely to create a comprehensive chipset solution.
Competition Hurting Growth Prospects
Marvell has been negatively impacted by lower cloud spending and CPU shortages. Additionally, shift in demand for products consigned to vendor-managed inventory arrangements is a headwind.
In the fourth quarter of fiscal 2019 (ended Feb 02), Marvell’s storage revenues, which constitute 43% of total revenues, declined 2% year over year and 22% sequentially to $317 million.
Although expanding storage market presents growth opportunity, Marvell is losing market share, which doesn’t bode well for investors.
Per IDC data, the global enterprise storage market witnessed a 7.4% year-over-year rally to reach $14.5 billion in calendar fourth-quarter 2018.With 18.7% global share, Dell DELL took the biggest piece of the pie, followed by Hewlett Packard HPE with 17.8%.
Further, in the High Definition storage drive market, Marvell is facing stiff competition from Broadcom AVGO as both are primary SoC (system on a chip) suppliers.
Notably, Broadcom increased its investment in Hewlett Packard’s server storage solutions in calendar 2018, creating further woes for Marvell.
Also, NXP Semiconductors, Qualcomm and Texas Instruments offer various components to the market, adding to the competition.
Nonetheless, Marvell’s announcement of the shipment of its HDD products to Toshiba reflects the value of its engineering expertise, and its focus on continued investment in HDD technology to boost its storage segment.
Marvell Technology Group Ltd. Price and Consensus
Marvell Technology Group Ltd. Price and Consensus | Marvell Technology Group Ltd. Quote
Marvell currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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