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Marvell Technology Forecasts In-Line Q1 Revenue, Shares Drop 15%

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Marvell Technology (MRVL.O) predicted first-quarter revenue in line with Wall Street’s expectations, but its shares fell sharply by 15% in after-hours trading. Investors were underwhelmed by the forecast, as they had hoped for more substantial growth driven by the surging demand for artificial intelligence (AI) chips.

The AI chip market has seen booming demand, particularly for sector-leader Nvidia’s (NVDA.O) AI processors. Major tech companies like Microsoft (MSFT.O), Meta Platforms (META.O), and Amazon.com (AMZN.O) have been working to reduce their reliance on Nvidia by developing their own AI chips, a trend that has benefited companies like Marvell and Broadcom (AVGO.O).

“The earnings print was generally OK, but I believe investors were expecting more given all the bullish data points in the overall AI space and the ramp of custom ASICs (AI chips) with certain hyperscalers,” said Tore Svanberg, an analyst at Stifel Nicolaus and Co.

Marvell’s data center segment performed well, with revenue up 78% year-over-year to $1.37 billion in the fourth quarter, driven by increased demand for custom AI chips as businesses work to optimize their AI workloads. In December, the company also signed a five-year chip deal with Amazon that includes custom AI chips.

“We’re engaged, we expect revenue to grow, but obviously, it’s like anything, you’ve got to show you can do it, and you’ve got to show it consistently,” Marvell COO Chris Koopmans said, emphasizing the “sticky” nature of the Amazon deal.

Marvell has pledged to focus its investments on data centers, seeing them as the best way to capitalize on the AI boom. Data center revenues accounted for 75% of its total revenue in the most recent quarter. However, Koopmans added that Marvell had not yet experienced any impact from tariffs affecting its data center business.

Despite posting solid results, Marvell’s shares dropped to $77.65 in after-hours trading, following a year-to-date increase of over 83%. In contrast, its larger competitor Broadcom saw a stock jump of around 107%. Analysts pointed to concerns over geopolitical pressures, AI monetization, and the magnitude of Marvell’s earnings beat as factors contributing to the decline.

Marvell forecast first-quarter revenue of $1.88 billion, slightly above analysts’ expectations of $1.87 billion.

Samsung Electronics Union Approves 5.1% Wage Increase

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Samsung Electronics’ main union in South Korea has approved a 5.1% wage increase for 2024, finalizing a deal reached last month between the company and the National Samsung Electronics Union (NSEU). The agreement, which required ratification by union members, also includes additional benefits such as company product purchase points and 30 Samsung Electronics shares per employee.

The NSEU, representing approximately 36,000 members—around 30% of Samsung’s South Korean workforce—has previously engaged in strikes to demand better pay and working conditions. However, Samsung maintained that production remained unaffected during the disputes.

This resolution comes as Samsung Electronics faces intensified competition in the semiconductor market, particularly in AI-related memory chip production. The deal helps stabilize labor relations at a crucial time for the world’s largest memory chipmaker as it seeks to strengthen its position in the industry.

Malaysia to Pay $250 Million for Arm Holdings Chip Design

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Malaysia has announced a $250 million agreement with Arm Holdings, spanning 10 years, to acquire chip design blueprints for local manufacturers. The deal aligns with the country’s ambition to develop its own graphics processing unit (GPU) chips within the next five to ten years, amid rising demand for artificial intelligence (AI) and data centers.

Prime Minister Anwar Ibrahim stated that the partnership would enable Malaysia to design, manufacture, and distribute AI chips globally. As part of the deal, Arm will establish its first Southeast Asian office in Kuala Lumpur, serving as a hub for regional expansion, including Australia and New Zealand.

Arm CEO Rene Haas emphasized Malaysia’s strong foundation in the semiconductor industry, citing its expertise in advanced packaging, assembly, and manufacturing. Economy Minister Rafizi Ramli revealed that the agreement covers seven high-end chip designs and includes a training program for 10,000 engineers.

The initiative aims to strengthen Malaysia’s semiconductor ecosystem by fostering 10 local chip companies, each projected to generate annual revenues between $1.5 billion and $2 billion. The government plans to develop a complete supply chain for AI servers, autonomous vehicles, IoT, and robotics, prioritizing local firms for key production roles.

Since 2023, global tech giants such as Microsoft, Nvidia, Google, and ByteDance have invested billions in Malaysia’s digital infrastructure, particularly in cloud services and data centers. The country is also constructing Southeast Asia’s largest integrated-circuit design park, offering tax breaks and subsidies to attract international tech players, with Arm expected to play a central role.