8th Jul 2022
- Marvell Technology’s stock has skyrocketed by 361% over the past five years following strong year-on-year financial results
- The company’s Octeon Fusion chips are set to increase data rates of 5G network infrastructure while optimizing latency and power consumption
- Marvell’s semiconductors are causing a ripple effect across the 5G space, improving the 5G capabilities of network carriers while providing fiscal advantages to smartphone manufacturers
Over the past five years, Marvell Technology has made headlines for its strong financial growth, with its share price skyrocketing by 361% in the period ended 2 February 2022,1 Leading the way in semiconductor and data infrastructure developments, the question remains — how will this 5G stock influence the industry as a whole with its innovation efforts?
Where Marvell Stands
In 2021, Marvell accumulated an annual revenue of $2.97billion; up from its 2020 and 2019 revenues of $2.7 billionand $2.87 billion respectively.2 As a result, shareholders earned a total return of 38% in 2021; an improvement on the 37% annual return over the previous five-year period.3
By comparing Marvell to its closest competitors, it becomes apparent that the semiconductor manufacturer was one of the best 5G stocks of 2021 in terms of stock market performance. On 22 December 2021, the company’s stock had experienced a year-to-date growth of 82%.4
By assessing the factors that have fueled Marvell’s financial performance, one can gain a better understanding of how this company is driving 5G technology forward and why it makes sense to consider this company when assessing whether or not to invest in 5G stocks.
Impact on the 5G rollout
This semiconductor manufacturer builds data infrastructure for a range of markets including automotive, cellular network carriers, data center and cloud. While the company produces network, computing, security and storage solutions, it has taken a particular interest in participating in the 5G race in recent years.
In an effort to reduce latency, increase data rates, and optimize device power usage, Marvell has developed a range of data processing units that will enable devices and telecommunications infrastructures to tap into the power of 5G networks.
Marvell started 2021 by rolling out a new line of Octeon Fusion chips. These chips were designed to work within Open RAN, or open radio access networks, whereby radio waves are used to send information from one device to another.
Traditionally, electronic devices are connected to cellular networks via base stations, which are boxes that are installed on top of telecommunications towers and buildings. These boxes, which are composed of components from a single manufacturer, suffer a shortfall, namely that they are incompatible with foreign components and therefore cannot be upgraded. As a result, if a network provider wishes to upscale its 5G capabilities, the entire box must be replaced.
Open RAN, on the other hand, consists of separate components, meaning that each part is replaceable and can be interchanged in order to enhance the network’s connectivity. Because 5G is able to flood networks with over 100 times more data than its predecessors, the need for interchangeable components will rise as network providers seek to scale their infrastructure.5
Marvell later announced that it would be entering the Evenstar program, whereby it would join other companies in creating general-purpose RAN reference designs to assist network providers in their development of Open RAN 5G ecosystems.6
In an effort to further advance its 5G push, Marvell recognized the value of forming a strategic alliance with other 5G companies. The company announced that it had partnered with Samsung to develop a new System-on-a-Chip (SoC) to enhance 5G network performance.7 The SoC, which is a circuit that integrates all parts of a computer system, was manufactured in order to increase the 5G capacity and coverage of cellular radios.
In addition to developing new technology, Marvell has also viewed acquisitions as a form of growing its 5G business. The company completed a $10 billion takeover of Inphi in an effort to expand its 5G network infrastructure and data centers.8
As a market leader in the production of high-speed semiconductor components and electro-optics solutions, Inphi will enable Marvell to become a leader in the end-to-end production of data infrastructure that will upscale 5G connectivity.9 Furthermore, Inphi’s optical subsystems will gear Marvell up for the production of future technologies such as 6G connectivity.10 Marvell CEO Matt Murphy stated that this acquisition would advance the company’s cloud and automotive innovations.
December 2021 saw Marvell Technology become a pioneer in the 5G space, with the company introducing the industry’s first 50G PAM4 DSP and TIA Chipset.11 The Marvell AtlasOne chipset, which has been designed to improve the scalability of RAN and Open RAN infrastructures, is also expected to decrease power consumption by up to 25%.12
Marvell’s ripple effect
The introduction of Marvell’s Octeon Fusion chips could have far reaching benefits for the 5g network , particularly when it comes to operational efficiency and limiting expenses.
Because the Open RAN system that these chips operate on allow for the interchangeability of components, telecommunications companies will only have to swap out the parts that they want to upgrade when it comes to scaling their 5G networks, rather than replacing entire base stations. This results in lower infrastructure costs and more flexibility when it comes to selecting components with the highest performance capabilities.
The partnership between Samsung and Marvell has the potential to benefit smartphone manufacturers as well as producers of other devices with 5G network capabilities. Their system-on-a-chip will improve the 5G coverage and capacity of smartphones while also saving up to 70 percent in chipset power consumption, meaning that these devices may improve in both 5G network connectivity and battery life.13
Another area where Marvell’s 5G business may drive significant growth is the metaverse. A collection of virtual worlds, the metaverse has a variety of potential business applications, ranging from virtual offices and meetings to training simulations. In order to function effectively, the metaverse needs to be supported by networks with the capacity to handle high-speed data transfers between 5G-ready devices which include virtual reality and augmented reality technology.
Using Marvell’s ultra-high-performance chips and data centers, telecommunications companies’ networks will have the speed and latency required to facilitate the high-speed data transfers of the metaverse. In addition, these companies will have the flexibility to scale their infrastructure as 5G technology continues to evolve.
Hopping aboard the 5G train
Determining the best 5G stocks to buy is an incredibly challenging task, especially since it is impossible to predict future trends. Still, if you’d like to delve into the question of which 5g companies to invest in may be, then Marvell Technology may give you a solid reference point. This company continues to launch vast advancements in the 5G space, leaving a positive impact on an array of other 5G companies in the process.
For information purposes only. This does not constitute a recommendation or an offer for a particular security, nor should it be taken as a solicitation or a recommendation to buy or sell securities or other investments.
For current performance and holdings, please visit defianceetfs.com/FIVG
1 “Marvell Technology (NASDAQ:MRVL) delivers shareholders enviable 37% CAGR over 5 years, surging 8.1% in the last week alone”, 02 February 2022, https://www.nasdaq.com/articles/marvell-technology-nasdaq%3Amrvl-delivers-shareholders-enviable-37-cagr-over-5-years-surging
3 “Marvell Technology (NASDAQ:MRVL) delivers shareholders enviable 37% CAGR over 5 years, surging 8.1% in the last week alone”, 02 February 2022, https://www.nasdaq.com/articles/marvell-technology-nasdaq%3Amrvl-delivers-shareholders-enviable-37-cagr-over-5-years-surging
4 “Marvell, Teradyne: Why Are 5G Stocks Soaring?”, 22 December 2021, https://www.forbes.com/sites/greatspeculations/2021/12/22/marvell-teradyne-why-are-5g-stocks-soaring/?sh=7f1a7ed1782f
5 “Marvell Expands Chip Lineup for Open-Standard 5G Base Stations”, 28 January 2021, https://www.electronicdesign.com/technologies/embedded-revolution/article/21153125/electronic-design-marvell-expands-chip-lineup-for-openstandard-5g-base-stations
6 “Marvell will launch distributed processors to deal with 5G data deluge”, 01 March 2021, https://venturebeat.com/2021/03/01/marvell-will-launch-distributed-processors-to-deal-with-5g-data-deluge/
7 “Samsung and Marvell Unveil New System-on-a-Chip To Advance 5G Networks”, 25 March 2021, https://news.samsung.com/global/samsung-and-marvell-unveil-new-system-on-a-chip-to-advance-5g-networks
8 “Marvell closes on $10 billion Inphi deal, expanding data center and 5G business”, 21 April 2021, https://www.cnbc.com/2021/04/21/marvell-closes-on-10-billion-inphi-deal-expanding-data-center-reach.html
9 “Marvell Completes Acquisition of Inphi”, 20 April 2021, https://www.hpcwire.com/off-the-wire/marvell-completes-acquisition-of-inphi/
10 “Marvell wraps $10B Inphi deal amid record semi merger streak”, 21 April 2021, https://www.fierceelectronics.com/electronics/marvell-wraps-10b-inphi-deal-record-merger-streak
11 “Marvell Introduces Industry’s First 50G PAM4 DSP Chipset for Next Generation 5G RAN Optical Fronthaul”, 07 December 2021, https://www.marvell.com/company/newsroom/marvell-50g-pam4-dsp-chipset-5g-ran-optical-fronthaul.html
12 “Marvell Industry Analyst Day 2021: New AtlasOne Chip Readies 5G RAN Optical Fronthaul for 5G Ecosystem”, 09 December 2021, https://futurumresearch.com/research-notes/marvell-industry-analyst-day-2021-new-atlasone-chip-readies-5g-ran-optical-fronthaul-for-5g-ecosystem/
13 “Samsung and Marvell Unveil New System-on-a-Chip To Advance 5G Networks”, 25 March 2021, https://news.samsung.com/global/samsung-and-marvell-unveil-new-system-on-a-chip-to-advance-5g-networks