The analysis believes that Marvell's initiative to raise prices is seen as the beginning of price increases in the optical communication field, reflecting the high market demand and confirming Nvidia CEO Jensen Huang's previous statement that "market demand is exceptionally crazy"
Media reports that the US networking and optical communication giant Marvell, in response to the surge in AI demand, recently notified customers that it will raise prices across its product line starting January 1st next year. Analysis suggests that this price increase is seen as the beginning of a price hike in the optical communication field, perhaps confirming Nvidia CEO Jensen Huang's previous statement about the "crazy market demand."
Marvell plays an important role in the optical communication field, especially in optical communication chips and solutions. Marvell is one of the world's leading semiconductor and network communication technology providers, with products covering data centers, enterprise networks, 5G, telecommunications, and other areas.
Marvell's performance has benefited from the high demand for ASICs (Application-Specific Integrated Circuits) and silicon photonics related to AI in data centers. The announcement of the price increase is seen by the industry as not only seizing opportunities and continuing to invest in cutting-edge and innovative product development but also reflecting the current high market demand.
According to reports, based on the price increase notice circulating in the industry, a letter signed by Marvell's Global Senior Vice President of Sales, Dean Jarnac, mentioned that due to the sharp increase in global accelerated computing and AI demand, the entire semiconductor supply chain is undergoing unprecedented investments to expand production capacity and diversify production bases. Marvell is no exception and is continuously increasing its investment in innovation to provide customers with advanced products and technologies.
In the letter, Jarnac pointed out that in response to the expanding investment demand, Marvell will adjust prices for all products starting from January next year and promised to control the price increase as much as possible to minimize the impact on customers. He also urged customers to place orders based on delivery schedules and provide accurate demand forecasts to the company.
Marvell's strong financial performance in the last quarter was mainly driven by the surge in AI demand, leading to significant growth in the data center business. In particular, its 800G PAM and 400ZR data center interconnect (DCI) and other optical communication products have become key growth drivers, pushing data center revenue to grow by over 90% year-on-year. According to Marvell's second-quarter financial report, the company achieved net revenue of $1.2729 billion, exceeding the midpoint of guidance, and expects growth in all end markets in the upcoming quarter, with the midpoint of comprehensive revenue expected to increase by 14% quarter-on-quarter.
Marvell CEO Matt Murphy previously revealed that the data center business will continue to accelerate growth, while the enterprise network and telecommunications end markets are also expected to return to growth, driving the overall business recovery.
Our optical products have achieved strong growth, and custom AI projects are also accelerating. Looking ahead to the next quarter, we expect the enterprise network and telecommunications end markets to resume growth, while the growth of the data center end market will further accelerate.
Analysis believes that Marvell's initiative to raise prices reflects the high heat of market demand, confirming Nvidia CEO Jensen Huang's previous statement about the "crazy market demand" and also opening up more imagination space for potential business opportunities in the optical communication industry. Affected by this, Marvell's stock price opened on Monday with a rise of over 3.8% at one point, before narrowing to around 1.3%, trading at $80.94 during the session. The company's stock price has risen nearly 40% year-to-date.
