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Marvell Extends Arm Partnership to Spur Processor Development

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Marvell Technology Group (MRVL - Free Report) recently announced that it has extended partnership with SoftBank Group subsidiary, Arm, to develop the Marvell ThunderX server processor technology further.

Under the agreement, Arm will support Marvell’s efforts in the development of server processor technology for three years or more, helping the latter expand its Arm-based server processor to enable the next generation of cloud and data center infrastructure.

Over the last decade, Marvell and Arm together have developed ThunderX2 — a powerful alternative to the x86 computing market.

The ThunderX suit of processors is an integrated and scalable suit of multi-core System-on-Chip (SoC) processors optimized for cloud and datacenter servers. These processors incorporate custom cores based on 64-bit ARMv8 architecture targeting cloud compute, cloud storage/Big Data and network function virtualization workloads.

Embedded Processors — A Key Growth Driver

Marvell’s Networking segment, which jumped a whopping 40% year over year in the last reported quarter, was greatly driven by its strong portfolio of embedded processors. The ThunderX processors are one of Marvell’s most widely adopted embedded processors, and a key driver of the company’s Networking business.

This apart, the OCTEON group of processors and Fusion baseband processors are gaining strong momentum in the embedded processors market, and were strong contributors to the segment’s solid performance in the last reported quarter. Marvell is also on track to ramp production of these processors in fourth-quarter fiscal 2020.

Per Research and Markets, the global embedded processors market is expected to witness a CAGR of 3.24% during 2018-2023 to reach $4.776 billion by 2023. This projection makes us optimistic about Marvell’s competitive position, given its strong portfolio of embedded processors.

Competition a Woe

Marvell faces significant competition from bellwethers, which is a constant concern for the company. Broadcom (AVGO - Free Report) and NXP Semiconductors (NXPI - Free Report) and Qualcomm (QCOM - Free Report) offer various components to the market, making us increasingly anxious about growth prospects of Marvell.

Moreover, AMD’s embedded R-series SoCs are also a major rival product to Marvell’s embedded processors.

However, we believe that given its efforts, Marvell is positioned well to withstand intense competition.

It currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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