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Marvell Partners With Analog Devices to Deliver 5G Solutions

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Marvell (MRVL - Free Report) recently announced a partnership with Analog Devices (ADI - Free Report) to offer highly integrated 5G radio solutions. Per the agreement, Marvell will integrate its 5G digital platform with Analog Devices’ wideband RF transceiver technology to provide digital front-end ASIC solutions with tightly coupled RF transceivers to 5G OEMs.

The companies will also jointly develop next generation Radio Unit (RU) solutions including baseband and RF technology, which will be optimized for a wide range of functional splits and architectures. Notably, the solutions will help 5G OEMs accelerate time-to-market.

Large deployments of MIMO (multiple input, multiple output) technology and growing requirements of mmWave spectrum are increasing complexities in 5G RUs. These complexities are giving rise to unique challenges in RF and radio network designs.

The two companies believe that the collaboration will aid them in developing highly optimized RU designs that would be smaller in size, require lesser power, and cost effective to 5G OEMs. Therefore, we believe that the partnership has potential to boost Marvell’s networking business in the long haul.

Onset of 5G Intensifies Competition

The fifth generation of cellular technology or 5G has accelerated the proliferation of video and other bandwidth-intensive applications with a data transmission rate that is about 10-100 times faster than the existing 4G networks. Billed as the technology of the future with faster download speed and low latency, 5G is touted to be the primary catalyst for next-generation IoT services. These include connected cars integrated with augmented reality and virtual reality platform, smart cities and connected devices, all of which are likely to revolutionize key industry verticals.

Moreover, per Strategy Analytics report “Cellular UE Radio Components Forecast 2020 - 2024: 5G Beyond the Baseband,” rising 5G user equipment demand would significantly stimulate the markets for RF radio components. Per the report, demand for advanced radio chipsets and complex RF front ends would be the highest.

Furthermore, per Qualcomm Technologies’ (QCOM - Free Report) management, 5G mmWave technology is expected to expand significantly this year and “poised to introduce new potential use cases for consumers and businesses through superb connectivity speeds and low latency.”

Last month, Apple (AAPL - Free Report) purchased Broadcom’s wireless components for $15 billion possibly to accelerate its plan to launch 5G-compatible iPhones over the next few years.

Moreover, AT&T has unveiled its 5G policy framework that will hinge on three pillars — mobile 5G, fixed wireless and edge computing. For a seamless transition among Wi-Fi, LTE and 5G services, AT&T intends to deploy a standards-based nationwide mobile 5G network in early 2020.

Marvell’s 5G Efforts Bode Well

Notably, management at Marvell expects strong growth in 5G-related revenues in second-half fiscal 2021, driven by continued deployment in Korea and higher 5G adoption in Japan and other countries. This makes us optimistic regarding the company’s prospects.

Moreover, in the last reported quarter, strong double-digit revenue growth in embedded processors, driven by ramped up 5G shipments, was a positive for Marvell’s networking business.

Further, In November last year, Marvell completed the acquisition of the ASIC business of GLOBALFOUNDRIES — Avera Semiconductor — for approximately $600 million. The buyout enabled the company to offer a complete range of semiconductor solutions, including 5G, data center, enterprise and automotive applications.

Marvell currently carries 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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