March 5 (Reuters) - Chip designer Marvell Technology forecast first-quarter revenue above Wall Street estimates on Thursday, signaling rising demand for custom semiconductors used in data centers to support artificial intelligence applications.
Shares of the company rose around 6% in extended trading.
The company expects revenue of around $2.40 billion, plus or minus 5% for first quarter, above analysts' average estimate of $2.27 billion, according to data compiled by LSEG.
Marvell and rival Broadcom help cloud-computing companies design custom chips tailored to their data-center workloads, a fast-growing business as hyperscalers seek alternatives to Nvidia's general-purpose AI processors.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)
Marvell Technology Group Ltd specializes in designing and marketing integrated communications and storage circuits intended for manufacturers of high-speed network equipment, hard disks, and consumer electronics. Net sales break down by area of application as follows:
- data centers (72.2%): artificial intelligence systems, data storage systems, Ethernet switches, servers, interconnection systems, etc.;
- enterprise networks (10.9%): routers, Ethernet switches, wireless access points, network equipment, workstations, etc. for campuses, small and medium-sized enterprises;
- telecom network infrastructures (5.9%): access multiplexers, Ethernet switches, optical transport systems, routers, wireless radio network access systems, etc.;
- consumer electronics (5.5%): broadband gateways and routers, game console systems, home data storage systems, home wireless access points, personal computer systems, printers and receiver terminals;
- automotive and industrial (5.5%): advanced driver assistance systems, autonomous vehicle systems, embedded network systems, industrial Ethernet switches, video surveillance systems.
Net sales are distributed geographically as follows: the United States (16.6%), China (43.5%), Taiwan (9.7%), Singapore (7.8%), Thailand (5.3%), Japan (2.9%), Malaysia (2.5%), Finland (2%) and other (9.7%).
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