Marvell Secures Exclusive Deal with Amazon
In a major business win for Marvell Technology (NASDAQ: MRVL), the chipmaker's stocks experienced a nearly 5% rise in pre-opening trades on Wednesday. This followed a Taiwan-based Liberty Times report stating that Marvell had successfully secured a contract for Amazon's (NASDAQ: AMZN) second-generation ASIC chip design.
Production to Commence in H2 2023
According to the report, the production of these chips is slated to start in the second half of 2023. This significant move could reshape the market for this leading chip manufacturer.
CEO Highlights Recent Progress and Goals
In a late May earnings call, the company's CEO and President acknowledged significant advancements in the business. The executive highlighted the "great progress on share gains, content gains as things like multi-gig ramped up, we added things like new custom ASICs." With this promising development, the company also aspired to double AI sales in the current year.
Analysts' Perspective on the Deal
Mizuho analysts shared their insight on the recent development, stating, "Any AMZN design slated to start or ramp in 2H23 was already in that revenue guide." Speculation had been rife that Microsoft would become a leading ASIC customer for Marvell. However, due to their strong in-house silicon development capability, Amazon's commitment signals a notable shift, exemplified by projects like Gravitron. Furthermore, analysts pointed out that Amazon has yet to be mentioned as a direct GPU / AI partner by NVIDIA's CEO in recent presentations, which have only highlighted Microsoft, Oracle, and Google.