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					                                                                                                                                                               17 August 2012
                                                                                                                                                        Americas/United States
                                                                                                                                                             Equity Research
                                                                                                                                                        Semiconductor Devices




                                                                          Marvell Technology Group Ltd.
                                                                          (MRVL)
Rating                                       OUTPERFORM*
Price (17 Aug 12, US$)                                 12.28                  DECREASE TARGET PRICE
Target price (US$)                       (from 22.00) 18.00¹
52-week price range                            16.73 - 10.38
Market cap. (US$ m)                                6,918.55               Valuation Support Looking For A Catalyst
*Stock ratings are relative to the relevant country benchmark.
¹Target price is for 12 months.                                           ■    Bottom Line. MRVL earnings and guidance disappointed as the company
                                           Research Analysts                   missed JulQ and guided OctQ below Street consensus.              Despite
                                                  John W. Pitzer               disappointing results the company did generate $178m in FCF representing
                                                                               a 10.3% FCF yield. We would be happier if strong valuation support were
                                                                               accompanied by fundamental catalysts – we see stable but not accelerating
                                                     Ryan Carver               fundamentals in OctQ/JanQ. We lower FY13/FY14 revs/EPS and lower TP
                                                                               to $18 from $22 to reflect a multiple more in-line with peers.
                                                   Patrick Walsh          ■    JulQ Revs Well Below Street. MRVL reported JulQ rev of $816.1m (+2.5%
                                                                               q/q), well below guidance of $840m-$890m (+6-12% q/q) and CS/Street at
                                                                               $850.0m (+6.7% q/q)/$852.7m (+7.1%). MRVL cited weakness in Storage
                                                                               (+7% q/q, 47% of revs) as macro/PC weakness negatively impacted HDDs,
                                                                               and in Mobile/Wireless (-5% q/q, 26% of revs) on further RIMM weakness
                                                                               and slowdown/share loss in the Chinese TD smartphone market, with
                                                                               Networking (+4% q/q, 22% of revs) relative in line with expectations. GM of
                                                                               53.6% was down 90bps q/q on negative mix from ONT PON and competitive
                                                                               pricing pressure in low end TD smartphones. Non-GAAP OpEx of $297.8m
                                                                               was below guide of $305m +/-5m on lower revs, with non-GAAP OpM down
                                                                               90bps q/q and 240bps below CS estimate. Non-GAAP EPS of $0.24 was at
                                                                               the low end of guidance of $0.24-$0.32 and below CS/Street at $0.26.




Share price performance                                                   Financial and valuation metrics
           Daily Aug 18, 2011 - Aug 16, 2012, 8/18/11 = US$11.97          Year                                                01/12A          01/13E          01/14E    01/15E
 16                                                                       EPS - (Excl. ESO) (US$)                                1.27            0.94            1.25        —
 14
                                                                          EPS (CS adj.) (US$)                                    1.27            0.94            1.25        —
 12
                                                                          Prev. EPS (CS adj.) (US$)                                —             1.13            1.43        —
                                                                          P/E (CS adj., x)                                        9.7            13.0             9.8        —
 10
  Aug-11         Nov-11           Feb-12       May-12                     P/E rel. (CS adj., %)                                  67.8            97.4            82.3        —
                Price               Indexed S&P 500 INDEX                 Revenue (US$ m)                                     3,393.0        3,262.5          3,626.8        —
                                                                          EBITDA (US$ m)                                        812.4           579.3           756.1        —
On 08/16/12 the S&P 500 INDEX closed at 1415.51
                                                                          Net debt (US$ m)                                       -785          -1,171          -1,942        —
                                                                          OCFPS (US$)                                            1.23            1.26            1.40        —
                                                                          P/OCF (x)                                              12.6             9.7             8.8        —
Quarterly EPS                Q1          Q2          Q3             Q4    Number of shares (m)                               563.40     Price/sales(x)                    2.21
2012A                       0.29        0.38        0.40           0.21   BV/share (Next Qtr., US$)                             8.5     P/BVPS (x)                          1.5
2013E                       0.23        0.24        0.24           0.24   Net debt (Next Qtr., US$ m)                      -1,057.8     Dividend (Next Qtr., US$)            —
2014E                       0.26        0.30        0.36           0.34   Dividend yield (%)                                     —
                                                                          Source: Company data, Credit Suisse estimates.



 DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, INFORMATION ON
 TRADE ALERTS, ANALYST MODEL PORTFOLIOS AND THE STATUS OF NON-U.S ANALYSTS. U.S. Disclosure:
 Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be
 aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this
 report as only a single factor in making their investment decision.
 CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS                                                                                                  BEYOND INFORMATION™
                                                                                                                                Client-Driven Solutions, Insights, and Access
                                                                                               17 August 2012



■   OctQ Guide Down Significantly. MRVL guided OctQ rev of $800-$850m (-2% to
    +4%), with the $825m midpoint SIGNIFICANTLY below CS/Street at $927m (+9.0%
    q/q) / $919m (+7.6% q/q). M&W was guided down mid-single digits (vs. Seasonal
    +14% q/q) on weak demand from China and continued RIMM weakness. Storage
    guide of up low single digits was also below seasonal (+6.5% q/q), as modest share
    gains in HDD and double digit 500G and SSD q/q growth are expected to be partially
    offset by expectations for flat HDD TAM at end customers. Networking guide of up low
    single digits was in-line with expectations, driven by new product growth/share gains in
    PON, NPUs and 10GigE. Non-GAAP GM was guided flat q/q at 53.5% +/- 50bps.
    Non-GAAP OpEx of $300m +/- $5m was lower than expected, however non-GAAP
    OpM of 17% +/- 1pct was 560bps below expectations at the midpt. Lower revs, and
    lower OpM partially offset by lower share count (580m vs. 602m or $0.01) drives EPS
    of $0.24, below CS/Street at $0.32/$0.31.
■   Lower Estimates, Lower TP – Valuation Remains Attractive. We lower our FY13
    rev est. to $3.26bn from $3.50bn and lower EPS to $0.94 from $1.13 on lower revs/GM
    partially offset by lower share count - Street is at $3.48bn/$1.12. For FY14, we lower
    our rev est. to $3.63bn from $3.87bn and lower EPS to $1.25 from of $1.43 – Street is
    at $3.78bn/$1.33. Shares trade at 9.8x CY13 (FY14) EPS (6.9x ex-Cash) a 16%
    discount to the 5yr median of 11.7x (range 5x-53x). FY14 FCF yield of 11% compares
    favorably to peers at 7.6% and net cash is currently 28% of mkt cap. We lower our PT
    to $18 (from $22), which represents 14.4x FY14 EPS (11.5x ex-Cash) roughly in line
    with peers at 14.6x.




Marvell Technology Group Ltd. (MRVL)                                                                       2
                                                                                                                                                                                      17 August 2012



Investment Thesis
Our Outperform rating on Marvell reflects our view that Marvell is well positioned for (1)
Share gains in HDD, SSD and 500G/platter Storage applications, (2) Wireless growth from
handsets/smartphone TAM expansion in the China market, particularly for TD-SCDMA.
We also note a strong balance sheet with net cash/per share of $3.37 – cash represents
~28% of market cap.



Results vs. Guidance and Expectations
Figure 1: Marvell Summary Results and Expectations
US$ in millions, unless otherwise stated
MRVL                      Apr-12                        Jul-12                                       Oct-12E                                          FY2013E                         FY2014E
                          Actual     New CS      CS       Cons         Guidance         New CS         CS        Cons       Guidance        New CS      CS       Cons      New CS       CS        Cons
Revenue                   $796.4     $816.1   $850.0     $852.7       $840-$890m         $825.0      $926.6      $914.9    $800-$850m       $3,262.5 $3,500.2   $3,477.7   $3,626.8   $3,870.9   $3,778.5
   q/q % change            7.2%       2.5%       6.7%     7.1%       +6 to +12% q/q       1.09%        9.0%      7.3%      -2 to +4% q/q
   y/y % change           -0.7%      -9.1%      -5.3%                                    -13.2%       -2.5%                                  -3.8%     3.2%      2.6%      11.2%      10.6%       8.7%
Non-GAAP Gross Margin     54.5%      53.6%      54.5%               54.5% +/- 50bps      53.5%       54.5%                53.5% +/- 50bps    53.8%     54.5%                54.0%      54.6%
R&D Expense (pf)          $238.4     $241.3   $245.0                    $245m            $245.0      $245.0                   $245m          $970.6   $974.4               $983.5     $980.5
SG&A Expense (pf)         $57.7       $56.6     $60.0                    $60m            $55.0        $60.0                   $55m           $224.3   $238.7               $225.0     $240.0
Operating Expenses (pf)   $296.0     $297.8   $305.0                 $305m +/- $5m       $300.0      $305.0               $300m +/- $5m     $1,194.9 $1,213.0              $1,208.5   $1,220.5
Operating Margin (pf)     13.9%      13.0%    15.4%                   19% +/- 1 pt       13.0%       18.5%                 17% +/- 1 pt      13.2%    16.6%                 16.7%      19.9%
Net Margin (pf)           14.0%      13.3%      15.4%                 Non-GAAP           12.6%       17.8%                  Non-GAAP         13.1%    16.3%                 16.0%      19.1%
GAAP EPS                  $0.16       $0.16     $0.19                                    $0.15        $0.25                                  $0.62     $0.83                $0.89      $1.12
Op EPS inc Options        $0.18       $0.19     $0.22                      `             $0.18        $0.27                                  $0.73     $0.95                $1.00      $1.23
Pro forma EPS             $0.23       $0.24     $0.26     $0.26       $0.24-$0.32        $0.24        $0.32      $0.31    $0.24 +/- $0.01    $0.94     $1.13     $1.12      $1.25      $1.43      $1.33
Diluted Shares Out        605.6       586.6     602.0                602m shares         580.0        602.0                580m shares       588.1     602.9                581.0      602.0

Source: Factset, Company data, Credit Suisse estimates



Revenue Model
Exhibit 2: MRVL Revenue Model
US$ in millions, unless otherwise stated
Revenues ($m)             Apr-11       Jul-11     Oct-11           Jan-12           Apr-12           Jul-12         Oct-12E            Jan-13E         FY12/CY11 FY13/CY12E FY14/CY13E
Total Storage             $ 389.9     $ 439.9     $ 431.1         $ 297.5       $     357.3      $      382.4      $   391.9       $       380.2       $ 1,558.3 $ 1,511.8 $ 1,696.2
Mobile & Wireless         $ 203.4     $ 233.9     $ 290.0         $ 229.5       $     226.4      $      215.1      $   204.3       $       216.9       $    956.9 $    862.7 $    997.3
Networking                $ 170.9     $ 176.9     $ 178.7         $ 177.4       $     175.1      $      182.1      $   186.6       $       190.4       $    703.9 $    734.1 $    801.8
Other                     $ 38.2      $ 46.8      $ 50.7          $   38.3      $      37.6      $        36.6     $     39.6      $        37.6       $    173.9 $    151.4 $    131.4
Total MRVL                $ 802.4     $ 897.5     $ 950.4         $ 742.7       $     796.4      $      816.1      $   825.0       $       825.0       $ 3,393.0 $ 3,262.5 $ 3,626.8

Revenue Q/Q Change         Apr-11      Jul-11      Oct-11         Jan-12            Apr-12           Jul-12         Oct-12E            Jan-13E          FY12/CY11 FY13/CY12E FY14/CY13E
Total Storage               (1.4%)      12.8%       (2.0%)         (31.0%)           20.1%               7.0%           2.5%               (3.0%)
Mobile & Wireless          (32.2%)      15.0%       24.0%          (20.9%)            (1.4%)            (5.0%)         (5.0%)               6.2%
Networking                   4.0%        3.5%        1.0%           (0.7%)            (1.3%)             4.0%           2.5%                2.0%
Other                       (6.5%)      22.6%        8.3%          (24.5%)            (1.8%)            (2.6%)          8.2%               (5.0%)
Total MRVL                 (10.9%)      11.9%        5.9%          (21.9%)             7.2%              2.5%           1.1%                0.0%

Revenue Y/Y Change         Apr-11      Jul-11      Oct-11 Jan-12                    Apr-12           Jul-12         Oct-12E            Jan-13E          FY12/CY11 FY13/CY12E FY14/CY13E
Total Storage              (15.4%)      12.3%        6.9%   (24.7%)                   (8.3%)           (13.1%)         (9.1%)             27.8%              -5.6%      -3.0%      12.2%
Mobile & Wireless            6.2%      (18.6%)     (15.9%)  (23.5%)                  11.3%              (8.1%)        (29.6%)              (5.5%)           -14.9%      -9.8%      15.6%
Networking                  (1.6%)      (2.0%)       8.7%     8.0%                     2.4%              2.9%           4.5%                7.3%              3.1%       4.3%       9.2%
Other                       29.0%       27.0%        8.5%    (6.2%)                   (1.4%)           (21.7%)        (21.8%)              (1.7%)            13.0%     -12.9%     -13.2%
Total MRVL                  (6.2%)       0.1%       (0.9%)  (17.5%)                   (0.7%)            (9.1%)        (13.2%)             11.1%              -6.1%      -3.8%      11.2%
Source: Company data, Credit Suisse estimates




Marvell Technology Group Ltd. (MRVL)                                                                                                                                                                      3
                                                                                            17 August 2012



Positives, Neutrals and Negatives
Positives

■   MRVL Continues Share Repurchase Plans. MRVL repurchased roughly 20m shares
    in the qtr for ~$250m, with roughly $600m remaining under the current repurchase
    authorization. Of note, over the past 6 qtrs MRVL has returned 174% of FCF in the
    form of ~127m in share repurchases.

■   HDD Density Trends Positive Again for MRVL. 500gig/platter shipments
    managed an impressive 30% q/q increase (vs. expectations of +50%) and
    represented 1/3 of Storage unit shipments in the JulQ.          MRVL expects
    500G/platter to grow double digits again in the OctQ on increased shipments to
    the mobile drive end market.
Neutrals

■   Networking In-Line for JulQ, Guided In-Line Growth for OctQ. Networking (22% of
    revs) was up 4% in the JulQ relatively in line with expectations for mid-single digit
    growth on strength in PON (+30% q/q) and NPUs (+15% q/q) as MRVL benefits from
    Core processing performance requirement in next gen Edge products. For the OctQ
    MRVL expects Networking to grow in the low single digits sequentially, driven by new
    product growth/share gains in PON, NPUs and 10GigE.

■   Storage Grows Below Guide on Macro Weakness. Storage (47% of revs) increased
    7% q/q in the JulQ, well below guidance for up 10-15% q/q, as macro weakness offset
    double digit growth in SSD and 500G/platter controllers. For F3Q, mgmt guided
    Storage up low single digits q/q on continued double digit sequential growth in
    SSD/500G and expectations that product cycle catalysts (Win8, Ultrabooks) may
    prove HDD TAM estimates of flat q/q conservative.
Negatives

■   F2Q Rev/EPS Below. MRVL reported JulQ rev of $816.1m (+2.5% q/q), well below
    guidance of $840m-$890m (+6-12% q/q) and CS/Street at $850.0m (+6.7%
    q/q)/$852.7m (+7.1%). GM of 53.6% was down 90bps q/q on negative mix from ONT
    PON and competitive pricing pressure in low end TD smartphones. Non-GAAP OpEx
    of $297.8m was below guide of $305m +/-5m on lower revs, with non-GAAP OpM
    down 90bps q/q and 240bps below CS estimates. Non-GAAP EPS of $0.24 was at
    the low end of guidance of $0.24-$0.32 and below CS/Street at $0.26.

■   F3Q Rev/EPS Guided Well Below. MRVL guided OctQ rev of $800-$850m (-2% to
    +4%), with the $825m midpoint SIGNIFICANTLY below CS/Street at $927m (+9.0%
    q/q) / $919m (+7.6% q/q). Non-GAAP GM was guided flat q/q at 53.5% +/- 50bps.
    Non-GAAP OpEx of $300m +/- $5m was lower than expected, however non-GAAP
    OpM of 17% +/- 1pct was 560bps below expectations at the midpt. Lower revs, and
    lower OpM partially offset by lower share count (580m vs. 602m or $0.01) drives EPS
    of $0.24, below CS/Street at $0.32/$0.31

■   Mobile & Wireless Misses JulQ, OctQ Guided Down Sequentially. M&W (26% of
    revs) declined 5% q/q on RIMM weakness and slowdown/share loss in the Chinese
    TD smartphone market – prior JulQ guide of up mid-to-high single digits q/q. MRVL
    expressed commitment to the Wireless market and highlighted new offerings with
    greater integration (BB/Apps/WiFi/NFC/GPS) and support for additional technologies
    (combo TD+WCDMA, TD/FD LTE), but expects muted TD rev growth for the next 1-2
    qtrs on macro weakness and product offering transitions. . For OctQ, MRVL guided
    M&W revs down mid-single digits q/q (vs. seasonal +14% q/q) on continued weakness
    at RIMM and unfavorable demand/competitive trends in the China end market, and
    sub-seasonal Connectivity – the 5th y/y decline in 6 qtrs for M&W.



Marvell Technology Group Ltd. (MRVL)                                                                    4
                                                                                                                                                                                                           17 August 2012



Summary Balance Sheet
Cash. MRVL ended the JulQ with $2.1bn in cash and $155m in long-term liabilities,
netting to $2.0bn in net cash or $3.37/share, flat q/q on lower share count from buybacks
in the qtr. During the quarter, MRVL generated $189.2m in Cash Flow from Operations,
spent $250m to repurchase 20m shares, and spent $11m on CapEx in the quarter.
Inventory, DSO, AP/AR. MRVL inventory dollars declined 2% q/q while inventory days
decreased by 6 days q/q to 83 days from 88 (rounding error of 1 day). DSOs were 45 days
down 2 from the prior qtr, while Accounts Payable increased 4% and Accounts Receivable
declined 6% sequentially.

Exhibit 3: MRVL Summary Balance Sheet                                                                        Exhibit 4: MRVL Cash Flow Summary
US$ in millions, unless otherwise stated                                                                     US$ in millions, unless otherwise stated
                                                                 Sequential                5 Year                    Quarterly                   Apr-12          Jul-12     Oct-12E Jan-13E FY2011 FY2012 FY2013E
                                  Apr-12              Jul-12     % Change                  Average            Revenue                            $796.4          $816.1     $825.0     $825.0 $3,611.9 $3,393.0 $3,262.5
Total Cash                        $2,226              $2,152         -3%                   $1,612             Capital Spending                    $18.9          $10.8       $10.8     $10.8     $90.2       $88.8     $51.4
Total LT Liabilities               $162                $155          -5%                    $285               Capex/Revenue                      2.4%           1.3%        1.3%      1.3%      2.5%        2.6%      1.6%
Net Cash                          $2,063              $1,997         -3%                   $1,326             Depreciation                        $21.2          $21.3       $21.3     $21.3     $93.2       $88.5     $85.1
Net Cash/Share                     $3.41              $3.40          0%                     $2.07               Depr/Revenue                      2.7%            2.6%       2.6%      2.6%      2.6%        2.6%      2.6%
Deferred Income                    $65.4              $67.8          4%                     $66.4             Operating Cash Flow                $198.7          $189.2     $195.8     $157.2 $1,193.5      $771.2     $740.9
Accounts Recievable               $417.4              $390.8         -6%                   $388.5               Free Cash Flow                   $179.8          $178.4     $185.0     $146.3 $1,103.4      $682.5     $689.5
Receivable Days                        48              44            -4                      45
Accounts Payable                      $323            $335           4%                     $275                        Annual                   FY2007          FY2008 FY2009 FY2010 FY2011 FY2012 FY2013E
Payable Days                           81              80                -1                  71               Revenue                           $2,237.6     $2,894.7 $2,950.6 $2,807.7 $3,611.9 $3,393.0 $3,262.5

Inventory                         $353.4              $345.7         -2%                   $293.6             Capital Spending                   $180.7          $113.5      $73.2     $39.8     $90.2       $88.8     $51.4
Inventory Days                         88              83                -6                  76                 Capex/Revenue                     8.1%            3.9%       2.5%      1.4%      2.5%        2.6%      1.6%
Cash Conversion Cycle               55                  46            -9                     50               Depreciation                        $77.2          $105.8     $112.8     $99.2     $93.2       $88.5     $85.1
                                                                                                               Depr/Revenue                       3.4%            3.7%       3.8%      3.5%      2.6%        2.6%      2.6%
SH Equity (BV)                    $4,923              $4,803         -2%                   $4,273
                                                                                                              Operating Cash Flow                $337.3          $177.1     $680.7     $811.5 $1,193.5      $771.2     $740.9
BV / Share                         $8.13              $8.19          1%                     $6.65
                                                                                                               Free Cash Flow                    $156.6          $63.7      $607.4     $771.7 $1,103.4      $682.5     $689.5
Tangible BV                       $2,763              $2,657         -4%                   $2,016
                                                                                                              FCF/Share                           $0.25          $0.10      $0.97       $1.18  $1.63         $1.09      $1.17
TBV / Share                       $4.56               $4.53          -1%                    $3.13

Source: Company data, Credit Suisse estimates                                                                Source: Company data, Credit Suisse estimates




Valuation
Shares trade at 9.8x CY13 (FY14) EPS (6.9x ex-Cash) a 16% discount to the 5yr median
of 11.7x (range 5x-53x). FY14 FCF yield of 11% compares favorably to peers at 7.6% and
net cash is currently 28% of mkt cap. We lower our PT to $18 (from $22), which
represents 14.4x FY14 EPS (11.5x ex-Cash) roughly in line with peers at 14.6x.


Exhibit 5: Trading Statistics of Comparable Companies
Market data as of 08/16/2012                 Target    Current   Market       Enterprise    EV/Revenues       EV/EBITDA                  P/E           Ex Cash Ex Cash         Cash       Cash           FCF Yield       Div
Company                Ticker   Rating       Price      Price     Cap.          Value      CY'12     CY'13   CY'12   CY'13       CY'12         CY'13      CY'12     CY'13      Share % Mkt Cap     CY'12       CY'13    Yield


Comm IC
Broadcom               BRCM      OP          $50.00     $36.02   $20,135        $19,561     2.4       2.2    14.3    12.0        12.2          10.7       11.9       10.4      $1.03      2.9%      8.2%       11.2%    1.1%
Altera                 ALTR       N          $35.00     $36.69   $11,739         $9,308     5.1       4.4    14.3    11.9        21.6          18.3       17.2       14.5      $7.60     20.7%      5.1%       6.2%     0.9%
Marvell                MRVL      OP          $22.00     $12.28    $6,919         $4,855     1.5       1.3     8.4       6.4      13.0           9.8        9.1        6.9      $3.66     29.8%     10.0%       11.1%    2.0%
Avago                  AVGO      OP          $42.00     $36.91    $9,033         $8,060     3.3       3.0    10.7       9.3      14.2          12.7       12.6       11.3      $3.98     10.8%      5.6%       7.6%     1.6%
Xilinx                 XLNX       N          $40.00     $34.11    $8,910         $6,559     2.9       2.8     9.6       8.8      18.9          17.1       13.9       12.6      $9.00     26.4%      7.3%       7.4%     2.6%
Anadigics              ANAD       N           $2.00     $1.23        $87             $3     0.0       0.0    NM      NM           NM            NM         NM        NM        $1.19     97.0%      NM          NM      0.0%
Entropic               ENTR       N           $6.50     $5.81       $511           $489     1.5       1.2    10.8       8.5      15.7          12.7       15.0       12.1      $0.25      4.3%      NM         5.5%     0.0%
Audience               ADNC      OP          $22.50     $18.57      $432           $320     2.5       1.9    19.4    12.7        25.4          20.9       18.8       15.4      $4.82     26.0%      4.1%       4.0%     0.0%
Average                                                           $7,221         $6,144     2.4       2.1    12.5       9.9      17.3          14.6       14.1       11.9      $3.94     27.2%      6.7%       7.6%     1.0%
Median                                                           $7,914.0      $5,707.2     2.5       2.0    10.8       9.3      15.7          12.7       13.9       12.1      $3.82     23.3%      6.4%       7.4%     1.0%

Source: Company data, Credit Suisse estimates, IBES




Marvell Technology Group Ltd. (MRVL)                                                                                                                                                                                            5
Marvell Technology Group Ltd. (MRVL)




                                       Exhibit 6: MRVL Income Statement
                                       US$ in millions, unless otherwise stated
                                                                                    Apr-11     Jul-11   Oct-11   Jan-12    Apr-12   Jul-12   Oct-12E Jan-13E
                                                      Modified 16th Aug 2012           1Q         2Q       3Q       4Q        1Q       2Q        3Q      4Q     FY2011     FY2012 FY2013E FY2014E
                                                      TOTAL SALES                    $802.4    $897.5   $950.4 $742.7      $796.4   $816.1    $825.0   $825.0   $3,611.9 $3,393.0 $3,262.5 $3,626.8
                                                       (sequential % change)        -10.9%     11.9%     5.9% -21.9%        7.2%     2.5%      1.1%     0.0%
                                                       (year-over year % change)     -6.2%      0.1%    -0.9% -17.5%       -0.7%    -9.1%    -13.2%    11.1%      28.6%    -6.1%    -3.8%    11.2%
                                                      Cost of Goods Sold             $334.5    $378.1   $412.1 $339.7      $364.4   $380.8    $385.4   $385.5   $1,469.2 $1,464.3 $1,516.1 $1,676.8
                                                      GROSS PROFIT                  $467.9     $519.4   $538.3   $403.0    $432.0   $435.3    $439.6   $439.5   $2,142.7 $1,928.7 $1,746.4 $1,950.0
                                                       (% of sales)                 58.3%      57.9%    56.6%    54.3%     54.2%    53.3%     53.3%    53.3%      59.3%    56.8%    53.5%    53.8%

                                                      Research & Development        $242.4     $249.5   $263.1   $254.6    $255.5   $263.7    $267.9   $269.3    $895.6 $1,009.5 $1,056.4 $1,081.5
                                                       (% of sales)                 30.2%      27.8%    27.7%    34.3%     32.1%    32.3%     32.5%    32.6%      24.8%    29.8%    32.4%    29.8%
                                                      Sales & Marketing              $38.2      $40.4    $40.5    $40.3     $40.0    $41.0     $40.5    $40.6    $155.5   $159.4   $162.0   $166.7
                                                       (% of sales)                  4.8%       4.5%     4.3%     5.4%      5.0%     5.0%      4.9%     4.9%       4.3%     4.7%     5.0%     4.6%
                                                      General & Administrative       $24.3      $23.2    $24.6    $23.6     $25.5    $24.7     $23.8    $23.8    $103.6     $95.7    $97.8    $97.9
                                                       (% of sales)                  3.0%       2.6%     2.6%     3.2%      3.2%     3.0%      2.9%     2.9%       2.9%     2.8%     3.0%     2.7%
                                                      Total Operating Expenses      $304.9     $313.1   $328.2   $318.5    $321.1   $329.3    $332.1   $333.7   $1,154.7 $1,264.7 $1,316.2 $1,346.1
                                                       (% of sales)                 38.0%      34.9%    34.5%    42.9%     40.3%    40.3%     40.3%    40.5%      32.0%    37.3%    40.3%    37.1%
                                                      OPERATING INCOME              $163.1     $206.3   $210.1    $84.5    $110.9   $106.0    $107.5   $105.8    $988.0   $664.0   $430.2   $604.0
                                                       (% of sales)                 20.3%      23.0%    22.1%    11.4%     13.9%    13.0%     13.0%    12.8%      27.4%    19.6%    13.2%    16.7%
                                                      Interest income (expense)      ($0.2)      $2.1     $7.7     $5.3      $1.1     $5.9      $2.0     $2.0      $13.6     $14.9    $11.0     $8.6
                                                        (% of sales)                 0.0%       0.2%     0.8%     0.7%      0.1%     0.7%      0.2%     0.2%       0.4%      0.4%     0.3%     0.2%
                                                      PRETAX INCOME                 $162.9     $208.4   $217.8    $89.8    $112.0   $111.9    $109.5   $107.8   $1,001.6    $678.9   $441.2   $612.5
                                                        (% of sales)                20.3%      23.2%    22.9%    12.1%     14.1%    13.7%     13.3%    13.1%      27.7%     20.0%    13.5%    16.9%

                                                      Provision for Income Taxes      $1.0       $4.3     $4.0    ($5.4)     $0.4     $3.1      $5.5     $5.4       $6.3      $4.0    $14.4    $30.6
                                                        (tax rate)                     1%       2.1%     1.8%    -6.0%        0%     2.8%      5.0%     5.0%       0.6%      0.6%     3.3%     5.0%
                                                      NET INCOME - ex-options       $189.3     $234.5   $244.5   $126.6    $138.7   $142.0    $137.9   $137.0   $1,113.7    $794.8   $555.7   $727.2

                                                      After-tax stock option exp.    $27.5      $30.4    $30.6    $31.4     $27.2    $33.2     $33.9    $34.6    $118.4     $119.9   $128.9   $145.3
                                                      NET INCOME - inc-options      $161.8     $204.1   $213.8    $95.2    $111.5   $108.8    $104.0   $102.5    $995.3     $675.0   $426.8   $581.9
                                                        (% of sales)                20.2%      22.7%    22.5%    12.8%     14.0%    13.3%     12.6%    12.4%     27.6%      19.9%    13.1%    16.0%
                                                      Amortization and write-offs    $15.0      $11.7    $18.7    $14.5     $16.9    $15.7     $15.7    $15.7     $91.2      $59.9    $64.1    $62.8
                                                        (% of sales)                 1.9%       1.3%     2.0%     2.0%      2.1%     1.9%      1.9%     1.9%      2.5%       1.8%     2.0%     1.7%
                                                      NET INCOME - GAAP             $146.9     $192.4   $195.1    $80.7     $94.6    $93.1     $88.3    $86.7    $904.1     $615.1   $362.7   $519.1

                                                      Basic avg. shares out            638.9    608.5    600.5    583.5     580.0    562.4     556.0    556.3     648.3      607.9    563.7    557.0
                                                      Diluted avg. shares out          662.9    624.8    615.1    605.7     605.6    586.6     580.0    580.3     679.0      627.1    588.1    581.0
                                                      EPS - ex-options                 $0.29    $0.38    $0.40    $0.21     $0.23    $0.24     $0.24    $0.24     $1.64      $1.27    $0.94    $1.25

                                                      EPS - inc-options                $0.24    $0.33    $0.35    $0.16     $0.18    $0.19     $0.18    $0.18     $1.47      $1.08    $0.73    $1.00




                                                                                                                                                                                                       17 August 2012
                                                      EPS - GAAP                       $0.22    $0.31    $0.32    $0.13     $0.16    $0.16     $0.15    $0.15     $1.33      $0.98    $0.62    $0.89
                                       Source: Company data, Credit Suisse estimates
6
Marvell Technology Group Ltd. (MRVL)




                                       Exhibit 7: MRVL Balance Sheet
                                       US$ in millions, unless otherwise stated
                                                                                                             Apr-11     Jul-11     Oct-11     Jan-12     Apr-12     Jul-12     Oct-12E    Jan-13E    FY2011     FY2012 FY2013E
                                                                            Modified 16th Aug 2012            1Q         2Q         3Q          4Q        1Q         2Q          3Q         4Q        Jan-11     Jan-12 Jan-13
                                                                 ASSETS
                                                                 Cash, cash equivalents, ST investments      $2,267.8   $2,399.8   $2,424.7   $2,246.5   $2,202.7   $2,134.2   $2,379.9   $2,492.8   $2,930.0 $2,246.5 $2,492.8
                                                                 Accounts Receivable, net                     $425.5      $405.8    $451.1      $407.3     $417.4    $390.8      $390.8     $390.8     $459.4   $407.3   $390.8
                                                                 Inventories, net                             $299.1      $322.0    $310.0      $354.1     $353.4    $345.7      $328.8     $328.8    $245.4    $354.1   $328.8
                                                                 Prepaid expenses and other current assets      $80.2      $70.8      $61.7      $71.1      $57.5      $58.9      $58.9      $58.9      $77.8    $71.1    $58.9
                                                                 Deferred income taxes                              -          -          -          -      $10.6          -          -          -          -        -        -
                                                                 Total Current Assets                        $3,072.6   $3,198.4   $3,247.5   $3,079.0   $3,041.6   $2,929.6   $3,158.4   $3,271.4   $3,712.6 $3,079.0 $3,271.4
                                                                  Property, plant, and equipment, net         $354.5     $363.8     $373.6      $383.8     $382.4    $381.2      $370.7     $360.2     $358.4   $383.8   $360.2
                                                                  Goodwill, acquired intangible assets       $2,130.3   $2,119.6   $2,112.1   $2,173.5   $2,159.1   $2,146.1   $2,096.5   $2,046.2   $2,129.5 $2,173.5 $2,046.2
                                                                  Long-term investments                         $26.1      $26.1      $23.2      $23.2      $23.2      $18.1      $18.1      $18.1      $26.2    $23.2    $18.1
                                                                  Other non-current assets                    $109.1     $120.7     $110.9     $108.1     $112.2     $109.6      $109.6     $109.6    $111.4    $108.1  $109.6
                                                                  TOTAL ASSETS                               $5,692.6   $5,828.6   $5,867.4   $5,767.6   $5,718.5   $5,584.6   $5,753.3   $5,805.6   $6,338.2 $5,767.6 $5,805.6
                                                                 LIABILITIES AND SH EQUITY
                                                                  Accounts payable                            $321.7     $354.0     $355.4     $304.7     $323.4     $335.1     $345.8     $345.8     $332.0    $304.7    $345.8
                                                                  Accrued liabilities                         $210.8     $207.2     $237.1     $224.9     $244.7     $223.5     $232.6     $231.4     $232.0    $224.9    $231.4
                                                                  Income taxes payable                             -          -          -                     -          -          -          -          -         -         -
                                                                  Deferred revenue                             $80.9      $67.8      $69.2      $60.0      $65.4      $67.8      $67.8      $67.8      $76.2     $60.0     $67.8
                                                                  Capital lease obligations                        -          -          -                     -          -          -          -       $0.5         -         -
                                                                  Total Current Liabilities                   $613.4     $629.0     $661.8     $589.6     $633.5     $626.4     $646.2     $645.1     $640.7    $589.6    $645.1
                                                                  Capital lease obligations                        -          -          -                     -          -          -          -          -         -         -
                                                                  Other LT liabilities                        $175.8     $173.5     $166.3     $164.0     $162.5     $155.0     $155.0     $155.0     $175.6    $164.0    $155.0
                                                                 TOTAL LIABILITIES                            $789.2     $802.4     $828.1     $753.6     $796.0     $781.4     $801.2     $800.1     $816.3    $753.6    $800.1
                                                                 TOTAL STOCKHOLDERS' EQUITY                  $4,903.4   $5,026.1   $5,039.3   $5,014.0   $4,922.5   $4,803.1   $4,952.1   $5,005.5   $5,521.9 $5,014.0 $5,005.5
                                                                 TOTAL LIABILITIES AND SH EQUITY             $5,692.6   $5,828.6   $5,867.4   $5,767.6   $5,718.5   $5,584.6   $5,753.3   $5,805.6   $6,338.2 $5,767.6 $5,805.6
                                                                 Profitability Ratios
                                                                  Return on Equity (ROE)                       13.2%      16.2%      17.0%       7.6%       9.1%       9.1%       8.4%       8.2%      18.0%     13.5%     8.5%
                                                                  Return on Assets (ROA)                       11.4%      14.0%      14.6%       6.6%       7.8%       7.8%       7.2%       7.1%      15.7%     11.7%     7.4%
                                                                  Return on Invested Capital (ROIC)            13.2%      16.2%      17.0%       7.6%       9.1%       9.1%       8.4%       8.2%      17.0%     12.7%     8.0%
                                                                  Return on Sales                              20.2%      22.7%      22.5%      12.8%      14.0%      13.3%      12.6%      12.4%      27.6%     19.9%    13.1%
                                                                 Efficiency Ratios
                                                                  Asset Turns (Annualized Sales / Assets)         0.6        0.6        0.6        0.5        0.6        0.6        0.6        0.6        1.0       1.1      1.0
                                                                  Receivables turns (annualized)                  7.5        8.8        8.4        7.3        7.6        8.4        8.4        8.4        7.9       8.3      8.3
                                                                  Days sales outstanding (DSO)                   48.4       41.3       43.3      50.0        47.8       43.7       43.2       43.2      46.4      43.8      43.7
                                                                  Inventory turnover (annualized)                 4.5        4.7        5.3        3.8        4.1        4.4        4.7        4.7        6.0       4.1      4.6
                                                                  Days of inventory                              81.6       77.7       68.6       95.1       88.5       82.8       77.8       77.8      61.0      88.3      79.2
                                                                  Payables turnover (annualized)                  4.2        4.3        4.6        4.5        4.5        4.5        4.5        4.5        4.4       4.8      4.4
                                                                  Days of Payables                               87.8       85.4       78.7       81.9       81.0       80.3       81.9       81.9       82.5      75.9     83.3
                                                                  Cash conversion cycle                          42.2       33.5       33.3       63.3       55.3       46.2       39.2       39.2       24.9      56.1     39.6
                                                                  Working Capital (AR + Inv - AP)               $403       $374       $406       $457       $447       $401       $374       $374       $473      $536     $488
                                                                  (Increase)/Decrease in working capital         (30)        29        (32)       (51)          9         46        28           0       (82)      (64)       48
                                                                 Liquidity Ratios
                                                                  Current ratio                                   5.0        5.1        4.9        5.2        4.8        4.7        4.9        5.1       5.8       5.2       5.1
                                                                  Quick ratio                                     4.4        4.5        4.3        4.5        4.1        4.0        4.3        4.5       3.6       2.0       2.4
                                                                  Debt / Equity                                   0.0        0.0        0.0        0.0        0.0        0.0        0.0        0.0       0.1       0.1       0.1
                                                                 Per Share Values
                                                                  Book Value per common share                  $7.40      $8.04      $8.19      $8.28      $8.13      $8.19      $8.54      $8.63      $8.13     $8.00     $8.51
                                                                  Tangible Book Value per common share         $4.18      $4.65      $4.76      $4.69      $4.56      $4.53      $4.92      $5.10      $5.00     $4.53     $5.03
                                                                  Cash per common share                        $3.42      $3.84      $3.94      $3.71      $3.64      $3.64      $4.10      $4.30      $2.72     $1.25     $1.99




                                                                                                                                                                                                                                   17 August 2012
                                                                  Net Cash per common share                    $3.16      $3.56      $3.67      $3.44      $3.37      $3.37      $3.84      $4.03      $4.06     $3.32     $3.98
                                       Source: Company data, Credit Suisse estimates
7
Marvell Technology Group Ltd. (MRVL)




                                       Exhibit 8: MRVL Cash Flow Statement
                                       in millions, unless otherwise stated
                                                                                                   Apr-11      Jul-11     Oct-11     Jan-12     Apr-12      Jul-12    Oct-12E    Jan-13E
                                                                                                      1Q          2Q         3Q         4Q         1Q          2Q          3Q         4Q    FY2011      FY2012 FY2013E
                                             Operating Activities
                                              Net income (loss)                                    $146.9      $192.4     $195.1      $80.7      $94.6      $93.1       $88.3      $86.7      $904.1     $615.1     $362.7
                                              Depreciation and amortization                         $24.0       $22.4      $20.2      $21.8      $21.2      $21.3       $21.3      $21.3       $93.2       $88.5     $85.1
                                              Amortization of stock-based compensation              $27.5       $30.4      $30.6      $31.4      $27.2      $33.2       $33.9      $34.6      $118.4     $119.9     $128.9
                                              Amortization and write-off of g'will and acq int.     $14.3       $11.1      $11.2      $12.7      $14.4      $13.0       $15.7      $15.7       $81.2       $49.4     $58.8
                                              Acquired in-process R&D                                    -           -          -          -          -          -          -           -           -          -          -
                                              Tax benefit from employee stock transactions          $(0.0)      $(0.0)     $(0.1)          -     $(0.0)     $(0.0)          -           -      $(0.7)     $(0.1)     $(0.0)
                                              Other, net                                              $3.9        $3.3       $4.3       $3.7       $2.9       $2.3          -           -       $9.7       $15.1       $5.2
                                              Changes in operating assets & liabilities:           $(39.4)        $3.8       $0.3    $(81.3)     $38.5      $26.3       $36.6      $(1.1)    $(12.4)    $(116.5)    $100.3
                                                  Accounts receivable                               $33.9       $19.7     $(45.4)     $46.3     $(10.1)     $26.6           -           -   $(102.6)       $54.6     $16.5
                                                  Inventory                                        $(53.1)     $(22.9)     $12.0     $(37.1)       $0.2       $7.8      $16.9      $(0.0)      $(3.0)   $(101.1)     $24.9
                                                  Prepaid expenses and other assets                   $0.6      $16.8      $16.8      $(3.5)       $4.2     $11.4           -           -      $42.2       $30.7     $15.6
                                                  Accounts payable                                  $(5.3)      $12.3      $(2.8)    $(51.3)     $21.2        $6.3      $10.7       $0.0       $52.1     $(47.1)     $38.2
                                                  Accrued liabilities and other                     $(5.5)        $5.4    $(17.9)     $(3.6)     $18.1      $(4.2)       $9.1      $(1.1)    $(53.9)     $(21.6)     $21.9
                                                  Accrued employee compensation                    $(14.9)     $(14.4)     $36.2     $(19.5)     $(0.6)    $(24.0)          -           -      $27.3     $(12.6)    $(24.7)
                                                  Accrued facilities consolidation charge                -           -          -          -          -          -          -           -           -          -          -
                                                  Income taxes payable                                   -           -          -          -          -          -          -           -       $4.5           -          -
                                                  Deferred income                                     $4.7     $(13.1)       $1.4     $(9.3)       $5.5       $2.4          -           -      $16.8     $(16.2)       $7.9
                                                  Deferred income taxes                                  -           -          -     $(3.2)          -          -          -           -       $4.2      $(3.2)          -
                                             Net Cash from Operating Activities                    $177.1      $263.4     $261.6      $69.1     $198.7     $189.2      $195.8     $157.2    $1,193.5     $771.2     $740.9

                                             Investing Activities
                                               Cash received from purchase acquisition             $(16.3)      $(0.4)                     -          -          -           -          -          -    $(16.8)           -
                                               Purchases of short-term investments                $(677.2)    $(462.7)   $(444.3)   $(269.3)   $(421.7)   $(225.3)           -          -   $(741.6) $(1,853.4)    $(646.9)
                                               Sales and maturities of short-term investments      $272.5      $408.5     $402.1     $379.0     $558.8     $322.5            -          -    $868.8 $1,462.2        $881.3
                                               Acquisition costs                                         -           -     $(2.0)    $(75.2)          -          -           -          -    $(29.4)    $(77.2)           -
                                               Purchases of equity investments                           -           -                     -          -          -           -          -   $(513.7)          -           -
                                               Capital Expenditures                                $(17.0)     $(25.2)    $(20.1)    $(26.4)    $(18.9)    $(10.8)     $(10.8)    $(10.8)    $(90.2)    $(88.8)     $(51.4)
                                               Purchases of technology licenses                     $(3.3)      $(3.3)     $(3.0)     $(4.2)     $(2.0)     $(4.4)           -          -    $(23.1)    $(13.8)      $(6.5)
                                               Other                                                $(1.8)      $(0.5)                     -     $(5.0)     $(0.8)           -          -          -     $(2.3)      $(5.8)
                                             Net Cash from Investing Activities                   $(443.0)     $(83.7)    $(67.2)       $3.8    $111.2       $81.3     $(10.8)    $(10.8)   $(529.3)   $(590.1)     $170.8

                                             Financing Activities
                                               Dividends                                                                                                    $(33.5)    $(33.4)    $(33.4)          -          -    $(100.3)
                                               Proceeds, issuance of common and cvt pfd stock         $5.2       $36.5          -      $47.5       $8.9      $38.9           -          -    $166.6       $89.2       $47.9
                                               Repurchases of common stock                        $(803.5)    $(135.7)   $(215.2)   $(186.5)   $(223.2)   $(250.3)           -          -    $(87.5) $(1,340.9)    $(473.5)
                                               Principle pymts on CLOs and notes payable             $(0.5)       $0.0       $8.7       $0.1       $0.0        $0.0          -          -     $(1.7)       $8.3        $0.0
                                             Net Cash Flow - Financing                             -$798.8      -$99.2    -$206.4    -$139.0    -$214.2    -$244.9      -$33.4     -$33.4     $77.4 $(1,243.4)     $(525.9)

                                             Change in cash and cash equivalents                  $(1,065)      $80.6     $(12.0)    $(66.0)      $96       $25.5      $151.6      $113.0     $741.6 $(1,062.2)     $385.8
                                             Cash and cash equivalents at beginning of period     $1,847.1     $782.4     $862.9     $850.9     $784.9     $880.6      $906.1    $1,057.8   $1,105.4 $1,847.1       $784.9




                                                                                                                                                                                                                              17 August 2012
                                             Cash and Equivalents at end of quarter                $782.4      $862.9     $850.9     $784.9     $880.6     $906.1     $1,057.8   $1,170.7   $1,847.1     $784.9 $1,170.7
                                       Source: Company data, Credit Suisse estimates
8
                                                                                                                                                             17 August 2012




Companies Mentioned (Price as of 17 Aug 12)
Altera Corp. (ALTR, $36.69, NEUTRAL, TP $35.00)
ANADIGICS, Inc. (ANAD, $1.23, NEUTRAL [V], TP $2.00)
Audience, Inc. (ADNC, $18.57, OUTPERFORM [V], TP $22.50)
Avago Technologies Ltd. (AVGO, $36.91, OUTPERFORM, TP $42.00)
Broadcom Corp. (BRCM, $36.02, OUTPERFORM, TP $50.00)
Entropic Communications, Inc. (ENTR, $5.81, NEUTRAL [V], TP $6.50)
Marvell Technology Group Ltd. (MRVL, $12.28, OUTPERFORM, TP $18.00)
Seagate Technology, Inc. (STX, $34.62)
Western Digital Corp. (WDC, $45.41)
Xilinx, Inc. (XLNX, $34.11, NEUTRAL, TP $40.00)


                                                        Disclosure Appendix
Important Global Disclosures
I, John W. Pitzer, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and
securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in
this report.
See the Companies Mentioned section for full company names.
3-Year Price, Target Price and Rating Change History Chart for MRVL
MRVL             Closing      Target                               24
                   Price       Price         Initiation/
Date               (US$)       (US$) Rating Assumption             22     22
8/28/09            15.36          18              X
                                                                   20
12/4/09            18.06          22
                                                                   18
                                                                    18

                                                                   16

                                                                   14

                                                                   12
                                                               8/28/09
                                                              US$ 10




                                                                           Closing Price              Target Price              Initiation/Assumption             Rating

                                                                            O=Outperform; N=Neutral; U=Underperform; R=Restricted; NR=Not Rated; NC=Not Covered

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months or the analyst expects significant volatility going forward.



Marvell Technology Group Ltd. (MRVL)                                                                                                                                       9
                                                                                                                                                               17 August 2012


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                        Outperform/Buy*        46%      (58% banking clients)
                        Neutral/Hold*          42%      (55% banking clients)
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                        Restricted              2%
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Price Target: (12 months) for (MRVL)
Method: $18 PT represents 14.4x FY14 EPS (11.5x ex-Cash), in line with peer group at 14.6x.
Risks: We see two primary risks to MRVL's achievement of our $18 target price. (1) Marvell's hard drive business offers limited growth and risk from
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Marvell Technology Group Ltd. (MRVL)                                                                                                                                         10
                                                                                                                                       17 August 2012


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Marvell Technology Group Ltd. (MRVL)                                                                                                               11
                                                                                                                                                                   17 August 2012
                                                                                                                                                            Americas/United States
                                                                                                                                                                 Equity Research




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