Marvell at Citi’s 2025 Conference: Strategic AI Initiatives

On Wednesday, 03 September 2025, Marvell Technology Inc. (NASDAQ:MRVL) presented at Citi’s 2025 Global Technology, Media and Telecommunications Conference. The company addressed investor concerns following its recent earnings call, emphasizing its strategic positioning in the AI market. While Marvell is optimistic about its growth prospects, it also faces challenges in maintaining customer confidentiality and navigating competitive pressures.

Key Takeaways

• Marvell aims for a 20% share in a $55 billion custom Total Addressable Market (TAM).
• The company is approaching its long-term target of a 38-40% operating margin.
• AI revenue doubled from $200 million in 2023 to $400 million in 2024.
• Emphasis on customer confidentiality due to the strategic nature of custom programs.
• Focus on hyperscalers and emerging markets, including sovereign entities.

Financial Results

• Operating Margin: Marvell is nearing its long-term target of a 38-40% operating margin, with a current guidance of 36.2%.
• Revenue Growth Strategy: The company plans for revenue growth to be twice the OpEx run rate.
• R&D Spending: Over 80% of R&D expenditure is directed towards data center initiatives.
• Capital Allocation: Marvell maintains a balanced capital return plan, with flexibility for potential bolt-on acquisitions.
• Non-AI Markets: Recovery is observed in enterprise networking and carrier infrastructure, with a normalized revenue run rate of $2 billion expected.

Operational Updates

• AI and Custom Silicon: Marvell has identified a $55 billion custom TAM, with $40 billion in XPUs and $15 billion in XPU attach. The company has secured over 18 XPU sockets and is tracking 50 additional sockets, estimated at $75 billion in lifetime revenue.
• Optics Business: Double-digit growth is expected in the optics segment of the AI portfolio next quarter.
• Networking Momentum: The acquisition of Innovium has driven growth in high-speed networking.

Future Outlook

• AI Focus: Marvell prioritizes investment in AI, viewing it as a "historic AI thing" requiring substantial focus.
• Emerging Markets: The company targets non-hyperscaler AI CapEx, including sovereign entities and second-tier cloud players.
• Technology Trends: Marvell is monitoring shifts in photonics, including silicon photonics and co-packaged optics, while focusing on pluggable solutions in the near term.
• Networking Expansion: Efforts are scaling up in high-speed, low-latency networking with IO and SerDes technology.
• Flexibility with Capital: The company maintains flexibility for potential bolt-on acquisitions to accelerate growth.

Q&A Highlights

• Market Dynamics and Competition: Diversity in business models is expected in custom silicon projects, with opportunities for multiple companies.
• Gross Margins: ASIC projects impact gross margins, which are targeted at a 58-59% range.
• Operating Margins: Marvell aims to expand operating margins, benefiting from NRE payments.
• Technology Trends: The photonics market is evolving, with mass adoption of silicon photonics not expected soon.

Readers are invited to refer to the full transcript for a detailed account of the conference call discussions.

Full transcript - Citi’s 2025 Global Technology, Media and Telecommunications Conference:

Atif Malik, Analyst, Citi: Is Atif Malik. I cover US semiconductors, semiconductor equipment, and networking equipment stocks at Citi. It’s my absolute pleasure to welcome Matt Murphy, chairman and CEO, Marvell, as well as Willem Minkies, CFO. I always have to remind Matt that he started his Marvell journey at Citi Conference many years ago with Rick Hill on the stage. That’s why he owes one to me every time.

Right. Exactly. So, thank you for being here, Matt. Matt, coming out of your recent earnings call, investors, are a bit concerned that something changed on the status of the two key XPU programs and that you didn’t appear as confident as before on the growth from customer revenue next year. Can you clarify what you were trying to communicate to investors?

Sure. Well, first of all,

Matt Murphy, Chairman and CEO, Marvell: good morning, everybody. It’s great to see all the all the folks here and also on the call. Just a quick couple of words upfront, and then I’ll get to your question. I think everybody’s curious about my answer to that. But to start off, I appreciate you hosting us here.

This this is this is city 10 for me. So yeah. But but, I mean, if you can believe it back then, it was a whole different world. It was my first conference actually as as CEO. And, I mean, we were just happy to get our financials on file with the SEC at that point.

And we had a consumer oriented business with some enterprise, and that was about it. And and by the way, multiple sell ratings on the stock. Nobody wants to point the finger, but yeah. Anyway, it’s okay. I don’t blame you.

I don’t blame you. There’s no and I had the pleasure of being up with Rick Hill, who was my chairman at the time. So anyway, fast forward, here we are, you know, 2025. It couldn’t be a more different picture, right, in terms of where Marvell is positioned. I’ve been in the semiconductor industry for, for thirty one years.

I’ve been through all these major sort of product cycles, going back to the early to mid nineties, and the the AI opportunity in front of us is just massive, and we found ourselves at Marvell, you know, right in the middle of it. So it’s still it’s still early innings for us, and there’s still a lot more to go. So, you know, maybe by city 20, it’ll even be a different a different story. So look, a couple of things on the call. I think the first is that, I want to just acknowledge and recognize concerns from investors around the way the answer to some of the questions were communicated.

So I want to try to be helpful here this morning so we can clear the air. So the first is, as you saw, I rotated and we rotated a lot harder on the customer confidentiality side. And I want to take a moment just to explain the why, so it’s not just like a canned response, but it’s a real thing. The strategic nature now of these custom programs is such that it really is what defines the future architecture of these systems and it’s these are fundamentally trade secrets of these companies. And being in a business like this, especially with a concentrated customer base where the stakes are so high, It’s a business fundamentally about people.

It’s about trust. It’s about long term relationships, and it’s about multigenerational investments. And so you need to have that trust there. So so so that that is the reason for the rotation to be a little bit harder on that front, be because of of the of the concerns from our customers there. But that being said, it it was it was not our intent to signal a change in our business when we said that.

Now now now a couple things on that. What what I was what I was asked to do was, you know, provide guidance for fiscal twenty seven, which is next year. Now Marvell’s got this one year off, but still, I think fiscal twenty seven to me sounds like a long time away. I mean, it’s, it’s it’s, we’re we just finished our q two of this year. We just reported those results.

So we’re we’re a ways out. But, you know, the the time will come when, it’s appropriate to do that. And once we have the visibility on on on the next year, you know, we’ll we’ll provide that. I mean, if you look back when we started this AI journey, really back in 2023, we were we’ve been signaling and giving information to investors to be helpful. Right?

If you remember the first call we had was, I think it was May 2023, and we said, hey, we think AI is going to be like $200,000,000 this year and 400,000,000 the next year. That was kind of overall. It was mostly optics. And then along the way, we had an AI Day, and then we had another AI Day. And and one of the latest updates we had given was that was that, you know, we would we had a a target of like a billion dollars plus for custom this year and we’ve been tracking.

We’re actually way ahead of that. So we’ll continue to be helpful there. And we’ve been planning for growth in this business and we still are, we still are, but I need the time and and once those plans, by the way, shore up and we have better visibility, then we’ll communicate that. We’ll communicate any change if it’s up, if it’s down, we’ll communicate that. And that’s basically how we’ve always been doing it, and that’s how I will continue to do it.

So that’s some of the background on on the why, but, I mean, I couldn’t be more excited about where this business is going. I mean, we had the AI day. We laid out a $55,000,000,000 custom TAM, which was up from just a year prior, and we actually provided the additional clarity, which maybe you’ll have some questions on that 40,000,000,000 of that was for XPU, which gets a lot of attention obviously and it’s very critical. And then $15,000,000,000 of XPU attach, which is really a growing and emerging market where there’s a different set of dynamics where Marvell is also participating. And we’re now up to like, you know, 18 I call it really 18 plus sockets because even since the AI day, we’ve won additional programs.

I mean, it’s there’s a lot happening right now. So I guess when I just look at the trajectory and the fact that we’re in the early innings of this business, it’s it’s relatively concentrated today because these are the first set of initial design wins we had that are ramping. This is you know, we’re in the early years here. But if I go out to 2028 and beyond and where TAM is and you see these 18 plus programs ramping, we’ll also have better diversity in the business going forward. It’ll be easier to plan and communicate it.

So those are some of the dynamics and challenges that we’re facing. But I hope that this is, helpful to investors to understand the why and a little bit more of the background.

Atif Malik, Analyst, Citi: Yes. Super helpful on the sensitivity around hyperscalers. Matt, most investors I talked to, they were super impressed by your June Investor Day on your IP portfolio and everything on the custom and basic side. Now design cycles are long on these custom silicon projects. I tell my clients that Marvell is where Broadcom was a year ago.

We’re mostly focused on one or two sockets right now, but there is a whole big pipeline that’s coming and diversification will happen. Now you’ve talked about this 20% share goal in custom market. Can you just walk us through your assumptions on TAM? You introduced XPU attach sockets as well. Just kind of walk us through how do you get to this 20% goal.

Matt Murphy, Chairman and CEO, Marvell: Sure. Yeah. And we we have a 20% goal on the overall TAM opportunity and that that’s the full boat, Marvell. Right? All the different product segments.

But we’ve also said that we believe that the custom piece can also get there, albeit we’re starting a little bit later. And and and the bulk of that is really based on the 18 wins that we outlined today. Now there’s optionality there. I mean, we said there was another 50 sockets that we’re tracking worth $75,000,000,000 plus of lifetime revenue. Like I said, subsequent to the call, we’ve actually closed several of those.

So think of that 75 has kinda come down because we’ve closed some of them. Now I think it’s gonna come back up because there’s just a tremendous wave of opportunity right now in terms of the design activity with with these with these customers. And so the the 20% share is really a combination of one, our bottoms up view of the individual opportunities. We obviously try to risk adjust and size those. And and guys, let’s just be clear.

It’s a very dynamic environment. Okay? I mean, we’re trying to call the ball obviously three years out. We’re trying to call the ball for next year, and things are changing. But directionally, the good news is it’s only been it’s only been up.

And so I think, you know, we’ll we’ll see where it shakes out, but I think the bottoms up certainly supports it. And then also just from a top down perspective when we look at the TAM and the opportunity, and as you mentioned, and we can go through it if you want, The key tenants of the AI Day we did in June around Marvell’s leadership in process and package technology, our IP portfolio, our ability to stitch the full solution together, our ability to have a world class robust supply chain, deep customer partnerships and the investment profile doing to invest for the future. It’s resonating really well with these customers. So the other angle, is more subjective is like, tops down, why can’t you guys get to this 20%? I mean, the pushback I got was why it be bigger if you just look at the law of market share and if you’re successful.

So we’ll see, but I think we’ve set a very achievable goal. Now it’s a big number because the TAM is growing so fast. So a big part of that equation on where the net revenue lands is obviously does the TAM keep growing at the rate it does and how much converts to custom and we have those assumptions in there. But I feel like those are pretty safe assumptions at this point. And certainly if you look at the cycle we’re in, CapEx spend, design win activity, it certainly suggests that that TAM profile going forward is going to happen.

And certainly our win rate suggests that we’re continuing to knock down these wins across a wide variety of opportunities. So I still feel very good, very bullish on where this business is going.

Atif Malik, Analyst, Citi: Matt, given how vocal some Asian companies are being about their involvement with the key customers’ design, do you see, given the level of CapEx that these hyperscalers are planning, that multiple companies can either work on multiple projects, perhaps even share the same ASIC projects? Or is it a winner takes all?

Matt Murphy, Chairman and CEO, Marvell: Yes. I think what we started this a little bit the first AI era that we did in 2024 and certainly followed it up, just a few months ago is, you know, we when we when we outlined the TAM, I mean, we did talk about, and I believe there’s there’s there’s gonna be diversity in there. Right? The spend is so big that I think you’re going to see some variety of business models that emerge. And I think actually the presentation we talked about in June, these different models, right, which were more on a spectrum, right, how much customer IP do they want from a company like Marvell, what kind of manufacturing services do you want, how important is other kind of bespoke unique technologies in the roadmap like PIVR or CPO or some of these other things, right, which may cause some of those dynamics to change.

And so and just again given the sheer spend, I think you’re going to continue to see more SKUs, more variants and more opportunities and diversity as we go forward. But I still believe that the vast majority of the shipments long term out of the custom TAM, majority market share will still come from what I would call full service or full turnkey providers where if you have all the pieces and you can actually manufacture, you know, design it together, manufacture it, yield it, ship it, move to the next generation, hit the beat rate, hit the cadence, that’s where the bulk of the market will land. But certainly, there’s gonna be room for for for different models, and there should be. It’s it’s the spend on these things is I mean, for example, the custom spend alone is projected to be bigger than the entire x 86 CPU market by 2028. So you got to imagine there’s going to be, I think, lot of opportunities.

And I think that’s a good thing for for Marvell. But it but but it’s not a winner take all. It’s not going to be two sockets and that’s it. And then whoever gets it, gets it. And the other one is going to be not a binary market anymore.

But you’re right. It’s in the early innings even for for the large more established providers. Alright. Willem, going back to you,

Atif Malik, Analyst, Citi: the in terms of gross margins, you guys have been kind of clear that the nature of the beast is that the ASIC projects have an impact on your gross margins, maybe 58% to 59% kind of range. But as you look into next year and just kind of in terms of the operating margins, you’ve talked about the revenue growth rate being 2x the OpEx run rate. So how do you kind of position the company to expand the operating margins where you do benefit from the NRE payments from some of your customers?

Willem Minkies, CFO, Marvell: Sure. I think maybe let’s start with if you just go back over the last year, right, and we’ve been signaling very consistently that as these custom programs are ramping, and you’ve seen that in our gross margins. Right? But at the same time, you can see this leverage that we’ve driven in operating margin. Right?

And we just guided a quarter to, like, 36.2 o m, which, you know, that’s really starting to approach that 38, 40% long term target that we have. Right? And so that model that we set out has really played out in the numbers that that we’ve executed on so far. And, you know, the one thing that we’ve been very consistent on is investing for growth. Right?

And so the the way that we’ve managed the portfolio is that we had all these other products, right, where we, you know, call that the mass market or carrier enterprise where we did a a a a refresh. And and that those refreshed products have started ramping, and and you can kinda see that and and how those sort of other end markets has really recovered pretty well. And so the the intensity of investment there has has reduced quite significantly, and we’ve sort of reallocated that to our data center portfolio. So that in combination with the the NRE that that’s called nonrecurring engineering. We recognize that as a as a contra OpEx.

It reduces our OpEx and think of that as an investment that our customers are are making in these programs. And so those two dynamics have have really allowed us to continue to manage OpEx very tightly, and and we’ll continue to do that through through next year. Now we do recognize that this is sort of a, you know, as Matt was just saying, like a historic sort of growth opportunity, and and and we wanna make sure that we invest. I mean, these resources to go have this differentiated technology is is very scarce. Right?

And and you’re seeing significant competition on those resources. And and and we’re sort of in a battle to maintain and attract those those resources. And so we’ll do what we need to do to continue to invest to drive that that that growth.

Matt Murphy, Chairman and CEO, Marvell: Yeah. But just to put a point on it, I mean, the the r and d position at AI and cloud has just been absolutely turbocharged over the last few years because one, we’ve increased R and D spending and we’ve been consistent on that despite the up years and down years. We’ve always grown our R and D. The NRE on the new programs is kicking in, so that’s an additional lift that we’re getting. And then as Willem said, the strong kind of capital allocation framework that we drive in Marvell through our strategic planning process and sort of our check ins and really looking at where our precious R and D dollars are going.

By the way, we just completed our tenth annual strategic planning review, right, which the first one was August 2016, about six weeks after I became CEO, which was our capital allocation framework that we continue today. And so now you see well over 80 plus of our R and D spend all in data center. And and we’re able to do that and still reap the benefits of the investments we made in the past on the other broad market opportunities. So we’re I think we’re in a great place relative to the invest and the spend and to be able to do that at scale, which which is only a handful of companies really possess the team to be able to go do this.

Atif Malik, Analyst, Citi: Great. Let’s talk about the other piece of your AI sales, the optics or the DSP part of the portfolio. You talked about double digit growth in the next quarter. You just share with us what you’re seeing in that part of the market? Why there was a slowdown in the reported quarter and then the reacceleration to next quarter?

Is it just timing?

Matt Murphy, Chairman and CEO, Marvell: I think some of it’s timing. It’s not it’s never been a completely linear business either. That one’s a little bit different always by design because just for the the investors to understand in the in the in the optics area for us, there’s there’s one other step in the supply chain, which we normally don’t see, which is the module manufacturing in the middle. So so sometimes you can get like a quarterly, you know, fluctuation there. But in general, if you just look, I mean, we’ve been worried about down quarters and, you know, inventory digestion or resets for, I don’t know, coming up on two years.

And I remember back at, I think it was the ’23. I mean, I got a little cautious and everybody kind of freaked out because I was just saying, hey, this thing has grown at like 80%, know, is it gonna going to slow down? And it hasn’t. And it’s been a very, very strong performer for us. And some of this goes through the channel, that sell through has gone great.

And all the signals we’re getting, which I think is a great proxy proxy for for where where the the AI spend is happening. If I just look at kind of what the lineup is on the go forward, lot of strong demand signals coming through about continued future growth in that business, especially for next year. So I think there’s a lot of optimism and you see that in the numbers, everybody’s kind of talking about where things can go, we certainly but and I think the other thing in that business is that we’ve since we acquired Inphi and integrated it, I mean, we’ve we’ve just absolutely maxed out on the resources assigned to that business. The team’s done an excellent job on technology leadership in terms of moving moving ourselves and our customers to the next generation. And we see that cadence continuing, whether it was our move from 100 gig per lane to 200 or now 200 to 400 in the future, which translates to these other cycles of 800 gig, 1.6 gig, 3.2 all those, we’re just absolutely heads down driving that, and that’s going to be key to really enabling this next wave of AI growth to happen is sort of releasing the communication and the IO bottleneck, which we play a key role in.

But it’s a very, very strategic business for us. The team has done an amazing job, super proud of them. And I think we’ve got just a great future ahead there, given our investment profile and the quality of the team we have.

Atif Malik, Analyst, Citi: Great. Let me pause here and see if there are any questions in the audience. If you have a question, please raise your hand. Yes, this one in the back.

Matt Murphy, Chairman and CEO, Marvell: The some capital with the sale given your bullish forecast next three years, gating might be the factor. Why aren’t you doing an ARS? Yeah. Willem, you wanna start with Yeah.

Willem Minkies, CFO, Marvell: Sure. Look, we’ve we’ve always had a a balanced capital return plan. Right? And so, you know, if you go back, I’ve been personally very, very focused on getting our, free cash flow to be a lot more consistent, and you’ve seen that consistency here over the last year. And that’s really resulted in a step up in our capital return.

This is, as you point out, a nice capital infusion here, and it gives us a lot of optionality. The other discussion we were just having is around the size of the opportunity. And we’re very, very pleased with our IP portfolio, but this is an extremely dynamic environment. And so as we look across the ecosystem where there’s potentially bolt ons that can accelerate our our growth and and our our portfolio, we’re we’re gonna be looking at that. And so you should expect us to sort of step up in terms of capital returns, but at the same time, we wanna keep that flexibility on on potential bolt bolt ons.

Atif Malik, Analyst, Citi: Questions? Alright. Matt, I’m kind of sticking with the the hyperscalers. You know, we have slowly seen entities like sovereign and enterprises start to ramp up on AI investments. And I understand you’re you’re you’re focused mostly on hyperscalers right now, but do you see your chances of getting a piece of the non hyperscaler AI CapEx in the future?

Matt Murphy, Chairman and CEO, Marvell: Yes. I think the way we broke it down and there’s different ways you can slice and dice this market. We talked about two kind of big buckets at the AI day. One was kind of the traditional top four hyperscalers, and then we had another category called emerging, which includes sovereign, by the way, if that’s your specific question. But also, you know, companies now building their own potential cloud infrastructure and kind of that second, but very important tier of cloud players that are that are vying for share.

So we have an opportunity set in in all of them. Certainly, from an optics perspective, that in in networking, that cuts across everywhere. And we have direct engagements on almost all those companies because we have we have great relationships with our module partners. They’re out marketing our solutions, but we’re also directly engaged and have sales teams and business development and business unit coverage of those other accounts and opportunities. And increasingly, those are also driving custom silicon opportunities as well.

And I think more and more you’re going to see that as those as their sort of CapEx and their spend rate goes up and their recognition, all of them that their need to have some differentiation. And and some of it’s just not just differentiate to be differentiate, but their their apps are different. Their workloads are different. Their their use cases are different. How they construct their data center footprint is different.

And so there’s given the sheer spend, it it actually opens up a lot of opportunity for us. So that was when we called out at the AI Day as kind of a big change over the last year, which which used to look more like a standard product kind of by the generic solution business. It looks like more and more, those are gonna get a little bit more bespoke and a little bit more unique, and that’s where we can really come in and add value.

Atif Malik, Analyst, Citi: Good. One area of networking that we’re seeing upsiding for some of your peers is on kind of scale out and even scale up efforts. And you guys don’t really break this out. You have in your AI sales, but can you just talk about the momentum you’re seeing on the scale upside?

Matt Murphy, Chairman and CEO, Marvell: Sure. Yeah. And yeah, we and today, we’ve given kind of these big buckets of our optics business, our custom business and then the rest of it. Over time, should any of those other areas like networking, for example, emerge to be big enough, we would start to call those out. But by the way, just on the scale out, which is really where most of that spend is today, We acquired a company called Innovium back in 2021 to get us into the higher layer, high speed cloud networking market.

And that’s gone really well. That business has has grown quite a bit since we acquired it. It’s set for very nice growth over the next couple of years as product transitions happen. When we bought the asset, we got a position in the footprint in 12.8 t switching. We put the whole team and the resources on 51.2 t and that from a market standpoint, that adoption is is starting to happen.

And so we’re gonna see that business inflect as a result. The reason I bring up the scale out to start is that the same kind of fundamental architecture team we have for that is the team that’s driving the scale up solutions, which is really a combination of high speed, low latency, low power networking with our IO and SerDes technology. And so that the scale out is there’ll be absolutely more to come there. We’re very involved in the standards around that area. We certainly are getting pulled in through our connectivity products and our XPU shots on goal as well, because it all fits together.

So there’s more to come on that one, but that will be a large driver of TAM growth for us in terms of where the scale out is going to go. And I think it represents a big opportunity in the industry and we’re very well positioned. We’re very focused there. So more to come on that one. But it’s I think it’s going to be a big opportunity that really plays well to Marvell’s strengths because we own our own SerDes IP.

We have our own, you know, really best in class architecture team on high performance switching and a very good system level view of how the connectivity and the XPU kind of roadmaps all play together.

Atif Malik, Analyst, Citi: Vilim, on the non AI markets, the enterprise networking and carrier infrastructure, they’ve recovered nicely. You guys have talked about a 2,000,000,000 kind of normalized revenue run rate. How strategic are those two businesses? Are there opportunities to maybe divest other areas after the auto Ethernet sale? Sure.

Yeah. Look, You know, those businesses, you know, go back. You know,

Willem Minkies, CFO, Marvell: we we we’ve got a very long history with those businesses. Right? And we’ve really optimized them. And so they’re a core part of our profitability growth engine, or these profitability driver. And and and so over time, you know, once we get to that 2,000,000,000, you know, we don’t we see see no reason why that can’t continue to grow, you know, at a similar rate as those those markets.

And so, you know, Matt mentioned our capital allocation exercise that we do every year, and, you know, we look at everything. So so we don’t have any, you know, sort of holy cow, so we’re not gonna gonna touch. But but but that business has been, you know, sort of the the core profitability driver for us. And, we’re actually very pleased with that recovery as you point out. Right?

I think when we were sitting here, you know, when when it hit the low of, call it, 900,000,000 run rate, and we were saying, hey, it’s gonna get back to 2,000,000,000. I think there was a lot of skepticism, right, whether that even comes back. And so now we’ve just guided 1.7. Right? And we do expect that growth to to continue.

We’ve seen bookings be be very strong and continue to be be strong in those businesses.

Matt Murphy, Chairman and CEO, Marvell: Yeah. Just to add, I think first, yeah, very pleasantly surprised with the reinflexion on that business. I mean, it obviously inflected down hard, and then we kept wondering what’s the slope coming back, and it’s not been linear. I mean, it started coming back and coming back, but I think very pleased to see that the recovery in the bookings shipments and kind of the demand outlook for our customers in those areas. And it’s not just complete inventory recovery.

I mean, it’s kind of tied into what I said earlier about how we’ve been able to start to reap some of the benefit of the prior investments in enterprise networking and carrier end markets. We had a whole five nanometer portfolio refresh. The fleet is like state of the art. And so those new products are also kicking in too. And so that’s giving us some of the additional lift.

So I mean, we got a whole business group team, division that’s focused on this. And they just presented out at our strategic review. They’ve got a growth plan. They’ve got ways they’re gonna go drive the revenue. We’re giving them investment.

It’s it’s it’s skinnier than it was. But again, that’s just because we put in a big, know, lift upfront. And then automotive specifically, that that that was just a very different kind of business. You know, it had its own sales team, its own quality team, its own processes. And so given kind of our scale in automotive relative to what that business was gonna do, I mean, it’s on a great trajectory.

It’s gonna Infineon will will do great with that business. But for us, when we looked at the big picture, you know, it it even if it doubled from where it was, it probably wouldn’t move the needle net net over the next couple of years on where we’re going on data center. And it was a competitive process and the economics were right. So that was the thought process on that, that was a little different. We do want to have some balance in our portfolio, but quite frankly, this historic AI thing, we just got to go for it.

I mean, it’s just it’s where the TAM is going. It’s a big seismic shift in the industry, and I think we would be kicking ourselves if we didn’t go after it. And to the question earlier, which was a great one on capital return, just maintaining some flexibility at the moment because we’re in this inflection to figure out what we want to do. But certainly, that if we just conclude the organic stuff we’re doing is great, then we’ll be much more aggressive on returning capital to shareholders. We’re very focused on that, not only driving our own internal free cash flow metrics, but obviously using the proceeds.

So more to come on that one.

Atif Malik, Analyst, Citi: Great. Then just coming back to the optics, there’s a kind of nonstop discussion on technology trends in CPU and OCS and 1.6. And NVIDIA talked about the use of co packaged optics at the GTC earlier this year. Can you just share with us your view on where photonics market is going to go and when are we going to see volume adoption?

Matt Murphy, Chairman and CEO, Marvell: Yes. Well, it’s the age old question that we’ve been chasing for some time. And for those of you that attend the OFC conference, this is kind of an annual discussion, right? Like when is high volume silicon photonics really going to hit, I. You know, in mass volume inside data center for things like like scale out networking or scale up networking.

But it has been a there’s been a big shift in in the last year or so relative to some of the big players really putting serious capital investments here, committing to roadmaps, technology development is getting driven and the technology has come along. I mean, we’re we have a strong skill set there. We’re shipping relatively high volume in SIFO today, but that’s for between data centers, right. That’s in our so our DCI products, I mean, it’s Marvell’s own silicon photonics solution. It’s our own pick.

It’s our own design. And by the way, we designed the entire chipset around it. We actually designed the entire module. So we have a lot of experience in manufacturing and volume here. It’s a bigger knee of the curve when you go inside data center.

And we’ve been showing off for the last couple of years our own integrated LightEngine solutions, which ultimately we can plug in and integrate with either our networking products or our ASIC products. So the the the the the change I would say is that it looks, you know, a lot more positive that this kind of a an impact can happen. But I don’t know if it’s ’28 or ’29 or ’30 or, you know, I it it and and and how long it really takes to get mass mass adoption. I I really still think that’s a ways out. I think we shouldn’t all get completely over our skis there.

But we’re going to be ready for both. Okay? And that’s a long term thing that we’re investing in. But just to be like crystal clear, when we look at the next several years from our customers, it’s all pluggables and it’s how fast can we move to the next one. And that’s then augmented by some more unique solutions like AOCs or AECs, which were in both of those by the way.

We have solutions for both. Linear pluggable optics, which was had failed to get traction for the last couple of years. That’ll start seeing some adoption. We actually have some great solutions there. We have design wins there.

We’re going be an LPO. It’s really like we’re trying to just be the one stop shop. If you want to have a range of solutions, we don’t just have religion that it has to be pluggables, it has to be the latest, greatest and we’re just going to hold our nose. I think we can leverage our technology across all of these. And I think more and more you’re going to see that.

But in the end, it’s going to be proven, pluggable, swappable, kind of high volume scalable solutions out there. And so some of these things like needs to be ironed out on the CPO side first, but we’re not poo pooing it at all.

Atif Malik, Analyst, Citi: Great. We’re almost out of time. Matt and Willem, thanks for being here.

Matt Murphy, Chairman and CEO, Marvell: Yes, appreciate it.

Atif Malik, Analyst, Citi: Thank you.

Matt Murphy, Chairman and CEO, Marvell: Thanks, everybody. We’ll see you today.

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