Summary of Marvell Technology Inc. Conference Call Company Overview - **Company**: Marvell Technology Inc - **Industry**: Semiconductors & Semiconductor Capital Equipment Key Points and Arguments Growth Outlook 1. **Overall Growth Expectations**: Management anticipates constructive growth across all end markets, particularly in the datacenter segment, which is expected to achieve at least 18-20% year-over-year (Y/Y) growth in CY26 [1][14] 2. **Datacenter Segment Performance**: The diversified datacenter segment, accounting for 75% of revenues, is well-positioned to grow in line with overall capital expenditure (capex) spending, projected at 18-20% Y/Y in 2026, with accelerating revenue growth expected in CY27 and CY28 [1][14] 3. **AI Custom ASIC Business**: The AI custom ASIC business is projected to have a baseline floor of 18% revenue growth, benefiting from the ramp of Trainium 3, indicating strong participation in Amazon's next-generation program [1][14] Partnerships and Product Development 4. **Amazon Partnership**: The partnership with Amazon remains robust, with visibility into multi-generational product wins and ongoing engagement on 2nm technology, which supports growth in the AWS custom AI XPU ASIC business [1][14] 5. **Expansion of Design Wins**: The number of multi-generational AI XPU and XPU attach wins has increased to over 20, up from 18 at the June AI day [1][14] Business Segments Performance 6. **Optical Networking Business**: The optical networking business is expected to grow faster than the custom business in CY26, driven by strong demand for its DSP products, which have grown to a $3 billion business, up from a $600 million revenue run rate since the Inphi acquisition [1][14] 7. **Emerging Datacenter Business**: The other/emerging datacenter segment is well-positioned for growth, particularly in the switching business, which has doubled to $300 million since the Innovium acquisition, with expectations of reaching approximately $500 million as the 51.2T Tbps product ramps [1][14] Financial Metrics and Stock Performance 8. **Stock Repurchase Program**: Marvell announced a $1 billion accelerated stock repurchase program and increased its total repurchase authorization to $5 billion, reflecting management's confidence in the company's growth profile [1][14] 9. **Valuation and Price Target**: The price target for December 2026 is set at $120, assuming a 33x multiple applied to projected earnings of approximately $3.60 in FY27, which aligns with the company's AI/Networking peers [1][16] Market Position and Risks 10. **Market Share Concerns**: Despite positive growth indicators, the stock is trading at a 5-turn discount to AI peers, attributed to investor pessimism regarding its ability to capture 20% market share within its datacenter segment [1][14] 11. **Risks to Growth**: Potential risks include a reversal in datacenter build-outs, competition in next-generation HDD technology, and muted spending from telecommunications providers related to 5G [1][17] Additional Important Information - **Revenue Growth Projections**: Revenue is expected to grow from $5.77 billion in FY26 to $9.48 billion in FY27, with adjusted EPS projected to increase from $2.85 to $3.60 during the same period [1][19] - **Management Confidence**: The management team effectively addressed competitive concerns and highlighted the diversified growth of its datacenter business, reinforcing their strategic direction [1][14] This summary encapsulates the key insights from the conference call, focusing on Marvell Technology Inc's growth prospects, strategic partnerships, financial performance, and market positioning.

Group 1: Core Insights - Citigroup has raised TSMC's CoWoS capacity forecast from 800,000 to 870,000 units by 2026, driven by strong AI demand and larger chip sizes [1] - Despite some downstream ODM manufacturers showing weak guidance, supply chain leaders like Hon Hai remain optimistic, with Nvidia's wafer revenue expected to grow over 50% year-on-year by 2026 [1] - Cloud service providers' ASIC development plans are identified as a second growth engine for TSMC, expanding advanced packaging demand into more applications like server CPUs [1][5] Group 2: AI Infrastructure Complexity - The complexity of AI infrastructure is increasing, with power consumption for AI systems potentially reaching 800-900 kW per rack by 2027/2028, raising demands on cooling and power systems [2] - The importance of high-speed serial and parallel interfaces (SerDes I/O) is growing, leading to more network switch chips and server CPUs adopting advanced packaging technologies [2] - Leading suppliers in the AI supply chain are expected to enjoy better growth prospects due to the increasing complexity of chip and system design [2] Group 3: Nvidia's Product Iteration - Nvidia's GB200 remains the primary configuration for AI data centers, with the GB300 expected to ramp up in Q4 2025 [3] - The next-generation system, Vera Rubin, is anticipated to be officially launched at the 2026 GTC conference and will utilize advanced N3 process GPUs and higher memory densities [3] Group 4: Cloud Providers' ASIC Accelerators - Google and AWS are leading in the development of self-developed ecosystems among cloud service providers, with ASIC chip shipments expected to reach 400,000 to 500,000 units by 2026 [4] - Google is collaborating with MediaTek for its TPU supply chain, while AWS's Trainium 3 is expected to achieve larger-scale production in the second half of 2026 [4] - Microsoft is slower in developing its own AI ASICs but is resuming activities related to the Maia 300, with small-scale production expected next year [4] Group 5: Advanced Packaging Demand Expansion - The application of advanced packaging technology is expanding beyond AI accelerators to include network switch chips and server CPUs, providing more growth opportunities for TSMC [5] - The increasing complexity of systems and data transmission requirements are raising industry entry barriers, allowing leading suppliers to gain competitive advantages [5] - Factors such as larger chip sizes and the ramp-up of ASIC accelerators in the second half of 2026 are supporting the optimistic outlook for TSMC's CoWoS capacity [5]

Summary of Conference Call Notes Industry Overview - The conference call focuses on the ASIC (Application-Specific Integrated Circuit) market dynamics, particularly involving major players like AWS, Google, Microsoft, and META, with projections extending into 2026 and beyond [1][2][5]. Key Company Insights AWS - AWS has resolved issues with Trainium 3 and continues to secure orders from downstream suppliers. The development of Trainium 4 has commenced, with expectations for a contract signing soon [2][5]. - The specifications for AWS's TPU chips are significantly higher than competitors, with TPU v6p and TPU v7p expected to have ASPs of US$8,000 and higher, respectively [2]. Google - Google is progressing steadily with its TPU series, with TPU v6p featuring advanced specifications including multiple compute and I/O dies. The company is anticipated to become a top customer for GUC due to its rapid ramp-up in CPU development [2][10]. - The revenue from Google's 3nm server CPU is expected to contribute to GUC's revenue sooner than previously anticipated, moving from Q4 2025 to Q3 2025 [10]. Microsoft - Microsoft is working on its Maia v2 ASIC, with a target of ramping 500,000 chips in 2026. However, the project has faced delays, pushing the tape-out timeline from Q1 2025 to Q2 2025 [3][4]. - The allocation of chips has shifted, with expectations of 40-60k chips for MSFT/GUC and 400k chips for Marvell in 2026 [3]. META - META is transitioning from MTIA v2 to MTIA v3, with expectations of ramping 100-200k chips for MTIA v2 and 200-300k chips for MTIA v3 in 2026 [2]. Non-CSPs - Companies like Apple, OpenAI, and xAI are entering the ASIC server market, with many expected to tape out in 2H25 and ramp in 2H26. These companies are likely to collaborate with Broadcom for high-end ASIC specifications [7][8][9]. Financial Projections - GUC's FY25 revenue is expected to exceed previous forecasts, driven by contributions from Google and crypto projects. However, concerns remain about FY26 growth without crypto revenue, with a projected 50% YoY growth in MP revenue [10][11]. - The revenue contribution from various ASIC projects in 2026 includes significant figures such as US$16,756 million from TPU v6p and US$2,616 million from Trainium 3 [18]. Additional Insights - The competitive landscape for ASIC design services is intensifying, with Broadcom and MediaTek entering the fray alongside existing players like Marvell and GUC [4][15]. - The potential impact of geopolitical factors on HBM2E clients was discussed, highlighting the resilience of Faraday in the face of possible restrictions [14]. Conclusion - The ASIC market is poised for significant growth, driven by advancements in technology and increasing demand from both CSPs and non-CSPs. Key players are adapting their strategies to navigate challenges and capitalize on emerging opportunities in the sector [1][5][7].