The demand for customized chips for AI applications is weak, and Marvell predicts lower than expected performance in the first quarter
Marvell Technology predicts that its first quarter performance is lower than market expectations due to weak demand for custom chips used in artificial intelligence (AI) applications, causing the company's stock price to fall by approximately 8% in intraday trading.
The company stated in November last year that due to weak demand from wireless operators and the enterprise market, it expects approximately half of its revenue to decline in the first quarter.
Marvell CEO Matt Murphy said, "Although we expect weak demand to affect consumers, operator infrastructure, and corporate networks in the short term, we expect the revenue decline in these end markets to end after the first quarter."
Customers, including cloud service providers and telecom operators, have been working hard to clear excess chip inventory during the pandemic to avoid supply shortages. These inventory adjustments have hindered Marvell's prospects of obtaining new orders.
According to data from the London Stock Exchange Group, the company expects adjusted earnings per share for the first quarter to be 23 cents, with a fluctuation of 5 cents, and an expected earnings per share of 40 cents.
Marvell Technology also announced a $3 billion stock repurchase authorization and stated that it expects net revenue for the first quarter to be $1.15 billion, with a fluctuation of 5%, compared to an expected $1.37 billion.
The company announced a revenue of $1.43 billion in the fourth quarter of the previous fiscal year, exceeding expectations of $1.42 billion, thanks to the rapid adoption of artificial intelligence.
The revenue of the company's data center division, including customized artificial intelligence chip business and network equipment, increased by 54% to $765.3 million, compared to an expected $759.8 million.
Marvell CEO Matt Murphy said, "Although we expect weak demand to affect consumers, operator infrastructure, and corporate networks in the short term, we expect the revenue decline in these end markets to end after the first quarter."
Customers, including cloud service providers and telecom operators, have been working hard to clear excess chip inventory during the pandemic to avoid supply shortages. These inventory adjustments have hindered Marvell's prospects of obtaining new orders.
According to data from the London Stock Exchange Group, the company expects adjusted earnings per share for the first quarter to be 23 cents, with a fluctuation of 5 cents, and an expected earnings per share of 40 cents.
Marvell Technology also announced a $3 billion stock repurchase authorization and stated that it expects net revenue for the first quarter to be $1.15 billion, with a fluctuation of 5%, compared to an expected $1.37 billion.
The company announced a revenue of $1.43 billion in the fourth quarter of the previous fiscal year, exceeding expectations of $1.42 billion, thanks to the rapid adoption of artificial intelligence.
The revenue of the company's data center division, including customized artificial intelligence chip business and network equipment, increased by 54% to $765.3 million, compared to an expected $759.8 million.