Marvell Technology Group Ltd. MRVL recently introduced the Marvell Prestera CX 8500 suit of products to meet the specific requirements of data centers using composable infrastructure.
The new family of products is basically a portfolio of Ethernet switches with 2 to 12.8 Tbps of capacity. With the onset of 5G, edge computing and IoT, pressure on data centers is increasing due to the massive amount of data required to run these technologies.
Moreover, as industries embark on their digital transformation journey, artificial intelligence and machine learning are requiring more data to be stored close to the edge of the network than on cloud.
The composable infrastructure framework, on which the Prestera CX 8500 is based, will negate the need to physically configure hardware due to the flexibility of compute, storage and networking resources managed by software. This apart, Prestera CX 8500 will also help data centers reduce their power consumption and enable low latency.
Marvell’s Ethernet Expertise
Marvell’s Ethernet switch and PHY business is gaining traction with new products in the enterprise market, which led to double-digit revenue increase from this business in the fourth quarter of fiscal 2019. Its refreshed switching products continued to grow with new socket wins, including a switch design with a major OEM and a number of PHY wins from a key networking OEM.
Driven by high demand of its Ethernet switch and PHY products, the company’s networking business jumped a whopping 60% year over year to $387.5 million in the last reported quarter.
Ethernet switch and PHY business is expected to sustain its growth momentum in the fiscal fourth quarter. The fully integrated Cavium business, which has further boosted the company’s capabilities in the Ethernet business, is projected to rake in revenues of approximately $240 million in the quarter.
Growth Prospect Remains Solid
Per Zion Market Research, global industrial Ethernet market is expected to witness double-digit growth and hit $58.98 billion by 2022.
Moreover, market research firm IDC forecasts that by 2025, the global data sphere will grow to 163 zettabytes (a trillion gigabytes), which is 10 times the 16.1 zettabytes of data generated in 2016.
This exponential growth bodes well for Marvell’s Ethernet Switches owing to growing demand for higher network speeds for fast processing of data.
Competition a Woe
Like any other growing market, the industrial Ethernet market is witnessing intensifying competition.
Last year, Broadcom AVGO unveiled its latest 200G Ethernet controller, known as Thor. It is specifically designed for machine learning, networking, fast-developing IoT and data analytics. With this initiative, Broadcom established itself as a key vendor for Ethernet controller and developers in the IoT and data center market. Its sales model’s scalability and breadth will enable developers to access Broadcom’s expanding portfolio of mass market products.
Recently, NVIDIA’s NVDA acquisition of Mellanox MLNX increased Marvell’s competition with NVIDIA. Mellanox boasts a robust portfolio, including the Spectrum-based Ethernet Network Operating System, Mellanox Onyx, which is witnessing strong demand.
It remains to be seen whether efforts like the introduction of Prestera CX 8500 can benefit this Zacks Rank #5 (Strong Sell) stock.
Marvell Technology Group Ltd. Price and Consensus
Marvell Technology Group Ltd. Price and Consensus | Marvell Technology Group Ltd. Quote
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