“We want to be the next Texas Instruments”

US-based Marvell Technology group, a little known semi-conductor company, shot into prominence when it signed an agreement this June, to buy over Intel’s communications and application processor group for $600 million.

The eleven-year-old firm provides high-speed mixed-signal/digital signal solutions in segments like storage, communications and consumer electronics. Its competitors are companies like Agere, ST Micro and Broadcom.

The company closed revenues of $1.67 billion in 2007 and has 3400 employees around the world.

Marvell’s CEO, Sehat Sutardja, was in Bangalore to visit the company’s Bangalore center. He spoke to

Priya Padmanabhan of CyberMedia News on the recent acquisition and the company’s future plans.

Marvell has been relatively low-key until recently when the Intel deal came about. Can you elaborate on the technologies and products you provide?

It was only when we bought Intel’s communications and application processor unit did people sit up and take notice of us. But the fact is that we have been in the semi-conductor business for the last 11 years. We are among the top five fabless semiconductor companies.

We are the largest player in the market in the area of to consumer-class wi-fi products which are used in cell phones, cameras, gaming consoles, PSPs and stereo systems; Gigabit Ethernet and storage. We are also in the HD-DVD and HDTV space.

We are the largest player in the market in the area of consumer-class wi-fi products which are used in cell phones, cameras, gaming consoles, PSPs and stereo systems.We are the leader in storage, Gigabit Ethernet and wi-fi for the consumer segment. We own 85 per cent of the market in this space. Also into HD-DVD and HDTV space. We also offer router and switching products, storage and data communications.

How does the Intel deal gel with Marvell’s strategy?

We have a small R&D team that looks at cell phone chips. With the Intel deal, we have a much bigger presence in this area since we have access to Intel’s XScale processor technology.

We have had a good working relationship with Intel for the last six years. Intel’s application processors go into high-end phones like BlackBerry, Motorola Q phones and 3G phones in Asia.

There is a misconception that Intel sold its unit since it was running under loss. This isn’t correct. The truth is that Intel wanted to refocus on its main processor business and did not want to invest more in the communications space. We were in the early stage of ramp-up in this area. So it made sense since we are into this area.  

The manufacture of these chips will continue at Intel’s fab in the transition period (two years). In the long run, we will second source the manufacture of these chips.  

You have increased your share of business in the consumer segment over the last two years? What is your future plan?

We want to be the next TI. Compared to TI, which has a lot of legacy technologies, we are into new technologies and new classes of products. Areas like Digital Signal Processing (DSP) and System-on-Chip (SoC) are our strengths and we will use these to address other markets. Since we have new technologies, our architecture is more scalable and applicable for new generation products.

Can you elaborate on your India operations?

We have two design centers in Gurgaon which become part of Marvell as a result of our acquisition of the Avago printer group this year. The Bangalore office was set up in 2002, when it was part of National Semiconductor. We took over this division in May 2005. The team, which has 35 engineers, works on video processing for high-definition technology. We have the capacity to expand to 120 seats.

With the chip companies focusing on low-cost phones market, do you also plan to get into the segment?

We have started out with smart phones and will eventually move to feature phones. It’s a matter of falling costs. The early adopters of smart phones are enterprises. When the cost comes down, you will see wider adoption.

© CyberMedia News