“Rapid recovery” in the semiconductor industry “appears to be stressing significant portions of the supply chain,” said Marvell Technology Group CEO Matt Murphy on a fiscal Q3 investor call Thursday. “These supply challenges are currently limiting our ability to fully satisfy the increase in demand for some of our networking products.” Marvell’s quarter ended Oct. 31. Marvell customarily enters every quarter with “a fairly steady level of delinquency,” defined as the volume of orders on hand that it “can't supply within the quarter,” he said. “Heading into Q4, that number is significantly larger than we've had.” That Marvell customers are adapting to the constraints by placing “longer lead times on us” is only exacerbating the delinquency, said Murphy. The stock closed 4.7% lower Friday at $43.38. When Marvell talks to its supply-chain partners, “there is an anticipation that certainly within the first quarter or two in calendar '21, that we will see some improvements there,” said Murphy. It’s forecasting $785 million in revenue for Q4 ending early February, plus or minus 5%. Marvell would end the quarter up 9% from the year earlier at the midrange of that guidance. Revenue in Marvell’s networking business in Q3 was $445 million, up 10% sequentially from fiscal Q2 and 35% from the year-earlier quarter, said Murphy. Q3 was Marvell’s fifth-straight quarter of sequential revenue growth in 5G, he said. In the fiscal first half, Marvell’s application-specific IC business drove much of the 5G growth, “benefiting from the rapid deployments in China,” he said. Though the wireless infrastructure ASIC business remained strong in Q3, “the sequential growth was driven primarily by standard and semi-custom product shipments to Samsung,” he said. 5G rollout outside China “is starting to pick up,” said Murphy. “We expect consumer demand for 5G services will continue to grow worldwide,” especially following the launch of new Apple 5G phones, he said. If Qualcomm's forecast comes to pass that 500 million 5G-enabled smartphones will ship globally next year, “I think that's going to drive a lot of demand for networks,” he said. Marvell’s 5G customer base “continues to expand,” said Murphy. A second regional 5G infrastructure customer picked Marvell's Octeon microprocessors to power its new 5G base stations, he said. The unnamed customer plans to “engage” with Marvell on a “variety” of radio access network architectures for 5G, including “emerging” open RAN initiatives. By adding ORAN and virtualized RAN capabilities to its existing 5G offerings, “Marvell will be the ideal semiconductor partner with a complete 5G platform capable of supporting all RAN architectures on a common hardware and software framework,” said Murphy. “This is a critical differentiator for Marvell,” he said. “Most 5G networks will have a complex hybrid architecture to support a diverse set of deployment scenarios.”
Paul Gluckman
Paul Gluckman, Executive Senior Editor, is a 30-year Warren Communications News veteran having joined the company in May 1989 to launch its Audio Week publication. In his long career, Paul has chronicled the rise and fall of physical entertainment media like the CD, DVD and Blu-ray and the advent of ATSC 3.0 broadcast technology from its rudimentary standardization roots to its anticipated 2020 commercial launch.
Surprises abound in the CES 2021 registration process that went live Thursday, including a provision that lets consumers not qualified for industry credentials to participate, albeit with limited access to event content. The all-virtual show runs Jan. 11-14, with day one reserved for media only. The registration website lists the boilerplate CTA has used for years, describing CES as “a trade-only event for individuals 18 years of age or older and affiliated with the consumer technology industry.” Yet scrolling down the page brings up a section that says consumers are invited and need not be “affiliated with the consumer technology industry.” Consumers “have access to only select public programming on CES official social media channels on Twitter, YouTube, LinkedIn and Facebook,” it says. CES 2021 is charging most attendees a base $149 fee to take part in the virtual event (see 2010200026). The fee applies to “industry attendees” who register through Jan. 3, after which it soars to $499 through Jan. 14, the event’s closing day. CTA members who register with their business email addresses through Dec. 14 can enroll in CES 2021 for free. The charge then becomes $149 through Jan. 3 or $499 Jan. 4-14. Registration is free for “credentialed media” but closes Jan. 8, says the site. All fees are “non-refundable and not transferable,” says the site, which on Thursday morning listed the CTA member rate as $199 before it was later changed to $149. CTA plans a series of virtual briefings for Dec. 15 to disclose “breaking news about CES 2021" and dig deeper into the show’s Microsoft-powered “digital venue,” said a media invitation Thursday. Bob Bejan, Microsoft corporate vice president-global events, production studios and marketing community, is scheduled to speak. For now, the registration site says enrolling in CES 2021 entitles attendees to “exhibitor showcases,” product announcements and demonstrations, keynote sessions and conference programming. Exhibitor news conferences will be open only to credentialed media, it says. Industry professionals whose credentials are denied can register for the show as consumers, says the site.
Data analytics provider Splunk endured “continued pressure” in fiscal Q3, ended Oct. 31, from COVID-19 “macro conditions” that resulted in some customers “hesitating to commit to long-term contracts,” said CEO Doug Merritt on a Wednesday investor call. Though cloud revenue of $145 million was 80% higher than in the year-earlier quarter, total revenue declined 11% to $559 million. As Splunk reached the end of October, “we saw a much lower than normal close rate among our largest deals, which caused us to fall short of our bookings target,” said Merritt. “Our third quarter did not meet our expectations.” Despite Q3 results, “I continue to believe that our opportunity is massive and our fundamentals remain strong,” he said. The stock plummeted 23.3% Thursday, closing at $158.03. Since exiting the quarter, Splunk “scrutinized the transaction pipeline and factors impacting our close rates,” said Chief Financial Officer Jason Child. “All indicators point to continued strong demand overall, and we are confident in the eventual closing of delayed transactions in the pipeline, but when they will actually close remains uncertain. As a result, we remain cautious on near-term market dynamics, but confident in our long-term growth trajectory.” Fiscal Q3 featured “the most unusual selling environment we’ve ever seen,” he said. “We believe this is a temporary market condition and the underlying demand remains strong, particularly for cloud.” Bookings that the Splunk sales team thought were in the bag “got stopped” by the customers' CEO, CFO or the board “in the final hours or days of routing for approval,” said Merritt. Looking back quarter over quarter, of “the top 10 deals that we went into a quarter with, we tend to close seven, eight or nine,” he said. “This quarter, we wound up closing three.” Customer personnel who previously had the authority to approve deals “had that authority pulled at the very end” of the quarter, he said. “There were some material, large-term transactions that got pushed.”
President-elect Joe Biden's incoming administration can support advanced manufacturing in the U.S. by “immediately lifting” the Section 301 tariffs on a “targeted list” of information and communications technology components and inputs sourced from China, blogged Alan Kohlscheen, IBM director-import compliance and supply chain security, and Michael DiPaula-Coyle, director-international trade policy. “Limited, early removal” of the most “counterproductive” China tariffs could provide relief for U.S. manufacturing, while leaving the new administration space “to negotiate further tariff changes based on Chinese market access commitments,” said the authors Wednesday. The tariffs have raised IBM’s sourcing costs by “tens of millions of dollars,” they said. “These imports do not represent high-value technology products -- rather, they are necessary inputs into U.S.-made systems and include such items as printed circuit board assemblies, mechanical parts, fans, power distribution units, power supplies, and cables -- largely available only from Chinese sources.” The incoming administration “can give a direct boost to U.S. manufacturing through targeted tariff relief on these sorts of component parts and inputs,” said Kohlscheen and DiPaula-Coyle. “Such a step would provide immediate benefits to U.S. manufacturing while also redirecting U.S. policy toward more international, and coordinated, action to address Chinese market access issues.” The Biden transition team didn’t respond to questions. Biden told New York Times columnist Thomas Friedman Tuesday evening that he won’t make “any immediate moves” on China policy after taking office. “And the same applies to the tariffs,” he said. “I’m not going to prejudice my options.” A “major priority” in the opening weeks of the new administration will be to “try to get us back on the same page with our allies” and develop a “coherent strategy” toward China, he said.
Though there was much “pull-forward” tech product demand due to the pandemic, Black Friday/Cyber Monday “is still a massive event in consumer spending,” GoPro CEO Nick Woodman told a virtual Wells Fargo investor conference Tuesday. Those days are “still like a ring of the bell for a large percentage of consumers to say, OK, let’s get out our wallets and start shopping,” he said. As for concerns that consumers “weren’t going to show up” for Black Friday or Cyber Monday, “that myth has been dispelled,” he said. GoPro “got comfortable” with its shift to “being more direct-to-consumer because we had good data,” said Woodman. “We’ve been growing our direct business year over year for quite some time. There have been periods of time where certain regions were low on inventory at retail and we saw enormous spikes in our dot-com business.”
Most 5G smartphones shipped in 2020 were sub-6 GHz only “due to the lack of millimeter-wave coverage,” Display Supply Chain Consultants CEO Ross Young told the virtual Display Market Outlook Conference Wednesday. Of the mmWave phones introduced before the debut of the iPhone 12, virtually all were targeted for the U.S. market and had a $100 “cost adder, typically,” he said. “But Apple outfitted all U.S. iPhone 12s with mmWave and sub-6 GHz without a cost penalty, which is boosting investment in mmWave and its outlook.” DSCC is forecasting the mmWave plus sub-6 GHz 5G “configuration” in smartphones will reach better than a 25% share in Q4, he said.
Hearst-owned WMOR-TV Lakeland, Florida, is the host station for five broadcasters that went live Tuesday with ATSC 3.0 signals in Tampa-St. Petersburg, the 12th-largest U.S. TV market, said Pearl TV. Consumers should understand that the NextGenTV "experience" from local stations “will be getting better and better, as more functions and features are added down the road,” said Pearl Managing Director Anne Schelle. Most broadcasters are launching 3.0 services in 1080p, and WMOR is also providing the market’s first HDR video signal. The station is transmitting Dolby Vision HDR, plus HDR10, said a Pearl spokesperson.
Online registration for the virtual CES 2021, previously scheduled to go live Tuesday (see 2010200026), "got pushed" to Thursday, emailed CTA spokesperson Jamie Kaplan, for undisclosed reasons. CTA will host a Dec. 15 virtual news conference where "we will be making some announcements and revealing the platform" for CES 2021, said Kaplan. The briefing will be a digital replacement for the physical CES Unveiled New York event in mid-November, which CTA scrapped in August due to the pandemic (see 2008250022). CTA picked Microsoft as its “cloud platform provider” to run CES 2021 as a four-day virtual event (see 2010190043). It opens Jan. 11 with a daylong media-only event.
When strong PC “demand signals” began appearing early in the pandemic, “all of us who have exposure to the PC market were wondering” if the robust sales were a “short-term” phenomenon, Advanced Micro Devices CEO Lisa Su told a virtual Credit Suisse investor conference Monday. “As we've now gone through the last six or seven months, we spent a lot of time talking to our customers” and their customers, she said. “This is more of a longer-lasting situation where the PC has just become essential.” One per household makes sense “if you're only using it an hour in a day,” said Su. “Now it's really about one PC per person.” AMD sees 2021 as “a growth year for PCs, which perhaps we haven't heard in a while,” she said. Its product portfolio is “very focused on some of these higher-end feature sets” that will bode well for “our long-term share-gain prospects,” she said.
Uber closed on its all-stock transaction to buy on-demand delivery platform Postmates, said the ride-hailing company Tuesday. “The two companies have begun the process of integrating U.S. operations,” it said. “As we bring together Uber Eats and Postmates, we're kicking off a regional listening exercise (first virtually and later with in-person sessions when safe to do so) across North America” to better understand merchants’ needs, blogged Stephane Ficaja, head-Uber Eats, U.S. and Canada. “We’ll be partnering with restaurant associations and chambers of commerce to make sure the right folks are in the room, and that our answers are accountable to you.” The goal is to give “restaurants -- and increasingly other types of merchants -- a bigger seat at the table to provide feedback on products in development, policy decisions, and more,” said Ficaja.