Marvell Technology stock jumps on key partnerships with Nokia and Samsung
Semiconductor company Marvell Technology Group is riding high today, its stock up more than 9% after announcing a key new partnership with Nokia Corp. just days after it entered into an important new collaboration with Samsung Electronics Co. Ltd.
The announcements, which both relate to 5G network infrastructure, came along with fiscal fourth-quarter financial results that beat Wall Street’s expectations.
Marvell said it’s partnering with Nokia on new 5G radio access system-on-chip that it plans to incorporate into its AirScale RAN products via the Nokia Reefshark portfolio.
It’s an important development because Nokia has so far struggled to develop its Reefshark SoCs, which allow a single computer chip to handle an entire system and therefore enable the company to produce equipment more cheaply.
“The two companies are developing a new generation of custom system on chip (SoC) and infrastructure processors combining Nokia’s differentiated wireless technology with Marvell’s industry-leading, multi-core Arm processor platforms,” Marvell and Nokia said in a statement.
Moor Insights & Strategy analyst Will Townsend wrote that this is a key partnership for Nokia. He said it should help to shore up some of its technical gaps and provide better support for future 5G standalone and nonstandalone deployments.
“The benefits appear compelling — a reduction in footprint for deployment flexibility, less power for improved opex control, and enhanced performance and capacity,” Townsend said.
Meanwhile the collaboration between Marvell and Samsung, announced in late February, also relates to radio access. The emphasis here is on delivering enough computing power to support “multiple-input and multiple-output beamforming,” which is a technique that focuses a wireless signal toward a specific receiving device, rather than having the signal spread in all directions as it normally does. The resulting more direct connection is faster and more reliable than it would be without beamforming.
“Samsung Networks has been growing by leaps and bounds with both fixed and mobile 5G infrastructure deployments outside of its traditional Asian market, so I see great upside for Marvell in this alliance,” Townsend wrote. “5G is inherently more software-defined than the previous ‘G’s, thus I see great value in their collaboration that should deliver new levels of programmability and performance for demanding use cases that are cloud and edge enabled.”
The new partnerships were announced at the same time that Marvell published its fourth-quarter results. The chipmaker reported a profit before certain costs such as stock compensation of 17 cents per share on revenue of $718 million. Wall Street had been looking for a 16-cent profit per share on revenue of just $712.95 million.
Marvell had even more good news regarding its guidance for the next quarter. The company said it expects a profit of 11 to 17 cents a share on revenue of $680 million, even when taking into account the impacts of the coronavirus. Wall Street has Marvell down for a 13-cent profit on revenue of $674.8 million.
“[We] delivered fourth-quarter revenue above the mid-point of guidance with solid results from both our networking and storage businesses,” Marvell Chief Executive Officer Matthew Murphy said in a statement. “Our guidance for the first quarter of fiscal 2021 reflects the reduction of approximately 5 percent of revenue to account for coronavirus impacts we are aware of so far.”
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