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Marvell's CEO, president step down

Posted: 06 Apr 2016 ?? ?Print Version ?Bookmark and Share

Keywords:Marvell? CEO? leadership transition? resignation?

Founder and CEO of Marvell Technology Group Sehat Sutardja and President Weili Dai announced their resignation from their respective management positions, effective immediately. Dr. Sutardja and Ms. Dai will remain on the Board of Directors, where Dr. Sutardja would maintain his position as chairman of the board. A search firm will conduct a search for a new CEO and president promptly, the company said in a press release.

The dismissal of the CEO and, his wife, the president, comes one month after a Marvell board audit committee identified management edicts as "tone at the top" problems, according to the Wall Street Journal. These edicts may have put undue pressure on Marvell's sales and finance personnel to meet revenue targets. The shake up follows a public disclosure in February that "activist investor" Starboard Value LP had taken a 6.7% stake in Marvell. (Starboard's other management concerns include Yahoo, Office Depot and Macy's not necessarily technology companies, and definitely not semiconductor makers.)

GlobalSemiconductorMarket

Figure 1: Former Marvell CEO Sehat Sutardja

Financial analysts applauded Marvell's management change, according to the WSJ, which suggested this could improve Marvell's financial performance or lead to a sale of the company. Marvell's stock price jumped 13% on the news. Wall Street has a long and fabled history of deposing technology-oriented company founders with financially-tuned CEOs, and Sehat Sutardja's ouster could well be the first step toward dismantling the company.

Strength in disk drive read channels

Sutardja firmly positioned Marvell firmly in the hard disk drive (HDD) business 20 years ago, with the introduction of digital read channels (serial data stream decoders) that would use high-speed sampling and DSP filtering to increase disk drive data densities. Unlike the analogue read channels, which depended on amplitude peaks to decode HDD data, digital technology could utilise straight CMOS technology scaling to define bit patterns on a hard disk track. Texas Instruments, whose own read-channel technology depended on BiCMOS analog peak detect amplifiers was forced to exit the read channel business, along with competitors like Infineon and STMicroelectronics.

Marvell remained the market leader in disk drive controllers, ahead of Avago which acquired LSI's storage IC business in 2014. Marvell reported no downsizing of its disk drive business, on its last fiscal year report, despite the proliferation of solid state drives (SSDs). Its hard disk drive controller ICs remain almost half of Marvell's $3.7 billion in annual revenues.

Though a smaller proportion of its annual revenues, Marvell remains a leader in ARM-based printer ASICs. CMOS technology enables the integration of many printer functions on one SoC. Modern printers include an ever-increasing number of communications functions PCIe, USB 2.0 and 3.0, Gigabit Ethernet, in addition to 200 MPixel-per-second high-resolution graphics transfers. Marvell's dual-core 64-bit printer SoCs, constructed in 28nm CMOS, are meant to be scalable for the printer makers' chosen features and price points. Marvell's long term customer for printer ASICs has been HP.

The company is reporting increasing penetration of the China cell phone market with its baseband controllers. A long-term project (since the 2006 acquisition of Intel's XScale product line), Marvell claims to be the second largest supplier of 4G LTE chips into China. Its LTE product revenues grew 28% from 2014 to2015, and now accounts for 24% of Marvell's company revenues.

Less visible in Marvell's financial reporting is their market position among the Internet of Things (IoT). Its product offerings include platforms for automotive consoles, home environment controls (the HomeKit), and for wearablesplatforms with a lot of growth potential

Many thanks to the company founders

Marvell board member Arturo Krueger said: "The Board would like to thank Sehat and Weili for their enormous contributions and service since they founded Marvell in 1995. Marvell has revolutionised the world through its innovative technology and breakthrough designs in the semiconductor industry.? But it IS time for a change, he insisted. The company will leverage its core business and technology to drive innovation and create shareholder value.

Deloitte & Touche LLP was appointed as the company's new independent public accounting firm in February. At the beginning of March, the Company reported the results of the Audit Committee's investigation of certain accounting and internal control matters. These findings will be available to the public with the filing of Marvell's Annual Report (Form 10-K) for fiscal 2016 and its Quarterly Reports (on Form 10-Q) for the second and third quarters of fiscal 2016.

- Stephan Ohr
EE Times





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