More pricing and competition concerns with chip stock Marvell (MRVL), but FBR says the weakness is just creating that good old buying opportunity:
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Recent checks suggest Marvell’s CY2Q business is tracking with expectations as PC and networking shipments remain reasonably robust. Separately, top customer Western Digital (WDC – not rated) reported results that could pressure MRVL shares. Drive units are seasonally growing, a positive, but price pressure for disk drives is intense, possibly weighing on chip pricing a bit later.
Freescale stealing MRVL’s Research In Motion (RIMM) mojo? Not a problem:
Freescale seems to have won an EDGE 2.75G baseband socket in an upcoming RIMM Blackberry. Not to minimize Freescale’s successful efforts, we still think there is plenty of room for Marvell to feed at the Blackberry trough this year. We believe Marvell’s unit shipments to RIMM could grow by 60%-80% this year. Marvell’s chip is a higher-end, full-featured SmartPhone solution. Thus, it makes sense that RIMM may want to use a lower-cost chip solution for this lower-end EDGE device.
FBR reiterates OUTPERFORM on Marvell (MRVL), target $23.
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