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It sounds like the Marvell CEO wants to be the next Intel CEO?

Daniel Nenni

Admin
Staff member
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This was during a Q&A last month at the Marvell Industry Analyst Day covered by Ian Cutress. Either way it is good advice.

James Sanders, TechInsights: What advice would you give to the future CEO of Intel?

Matt Murphy:
I don't know who that's going to be. That was the weirdest thing, but what are you supposed to do? I actually don't know the answer to that question. I mean, I think there's a monster challenge in there, that's all I can say at this point, it's a really great question. If you guys want to grab a beer later, we can definitely do that! But the opportunity is there, and I am an optimist.

What I'll say is this. Some of you don't even remember now, but when I left Maxim, which was a good company, and I was the CEO successor there. I spent 22 years there, and I loved the place. I had to make the tough decision, which I did at the time, personally and professionally - it was the toughest decision I ever made. It was to leave. I mean, Marvell was a dumpster fire at the time you know, it was in absolutely in really bad shape and we didn't have much. But we bootstrapped it and we did a whole bunch of things and then we got here. I had the mentality at that time which was a high level adage, I think everything's fixable to a point. I mean I think you just have to have that mind-set, and you have to be able to just really get in. I'm talking like shoulder to shoulder and just dig in and micromanage the living hell out of everything. At some point after I joined this company, I remember there was 5000 people and me, I didn't know a single person. I didn't trust a single person. But Chris (Koopmans, COO) was here early on. I started to trust him pretty quick.

I think one thing that served us well is that you have to have a point of view on what you're going to do. Yourself personally. Not your team, not other people. You have to figure out what the company problems are, and then literally create your own OS to solve it. What are you going to focus on? What are you going to KPI? What are you going to manage? What are you not going to manage? At some point I ran every meeting at the beginning. Design review, engineering review. I wrote the earning script, I had to get involved. There was no one to help me and at some point you find the right people.

So, yeah, I think whoever takes that, it cannot be a corporate suit. You really need to be able and willing to get in there, meet the people. I used to do this chat with Matt every week. I met with employees every single week. I flew around the world for years meeting employees. What am I dealing with at this company? What do I need to go fix? And how do I do it? What are the people changes you need?

We went through a major turnaround. I know what it takes – it’s hard but it can be done. No problem is insurmountable. You have to make really tough decisions. In the end, when people say that, they're always the easiest, simplest decisions. What did we do with our WiFi? People told me we can't sell it, it's impossible. We sold it to NXP for a home run price. I used it to buy Avera, which got us this custom silicon $40bn TAM. I got Aquantia, it gave us the number one Ethernet PHY. There's all kinds of stuff you can go do.

So I'm an optimist. I think they'll find the right person, they'll get in. It's my optimism. I want Intel to succeed. It's my hero company, I always looked up to it. Andy Grove was my legend, mentor, the person I always aspired to be, and so I want this company to do well. I hope it does. But for me at Marvell, we're in the right spot now. I worked so hard to get us here, Eight years grinding this thing to get to this $90-$100bn market cap, and I’m going to go drive it higher. It's motivated our team. We have a team that worked our butts off. I'm just saying I was super fired up at the start and I don't know about the products and the technology and everything, but I hope for the industry analysts here you hear my confidence in the company, my confidence in the team and the market we've got that we're going after, and we'll see where it goes.

 
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I guess Intel's XPU platform (Falcon Shores) could potentially support custom AI chips. These could be developed using their "system foundry" approach.
 
I guess Intel's XPU platform (Falcon Shores) could potentially support custom AI chips. These could be developed using their "system foundry" approach.

My suggestion was for Intel to buy a big ASIC company when they re started the foundry business. TSMC has GUC and a vast network of ASIC providers. UMC has Faraday. SMIC has VeriSilicon and other China based ASIC providers. The ASIC business has been around since I have and it is a growing business now that systems companies are doing their own chips. Apple started with Samsung ASIC services way back when. Google used Broadcom ASIC (formerly Avago). Marvell bought the GF ASIC group which was formerly the IBM ASIC group. Big business those ASICs.
 
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Marvell actually has a higher market cap today than Intel believe it or not. Maybe Marvell could buy them.
 
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My suggestion was for Intel to buy a big ASIC company when they re started the foundry business. TSMC has GUC and a vast network of ASIC providers. UMC has Faraday. SMIC has VeriSilicon and other China based ASIC providers. The ASIC business has been around since I have and it is a growing business now that systems companies are doing their own chips. Apple started with Samsung ASIC services way back when. Google used Broadcom ASIC (formerly Avago). Marvell bought the GF ASIC group which was formerly the IBM ASIC group. Big business those ASICs.
Could Intel be a substantial shareholder of Faraday as there is some synergy between UMC and Intel?
 
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Not possible. Marvel is smaller than Qualcomm by all measurements.
Which means there won't be as much of an anti trust concern.

For the record I don't think it would happen, but I thought pointing out how Marvell is actually a bigger company than Intel now measured by market cap was illustrative of how far Intel has fallen.
 
I would be careful about your assumptions on what Intel is and is not good at.

Is Intel a good company at developing and quickly bringing to market new Chips that are not x86 CPUSs?

Is Intel a good company at cost effective manufacturing?

Intel has tried to Pivot many times in the last 20 years. Intel should focus on what they ARE good at and not what they WISH they were good at
 
Which means there won't be as much of an anti trust concern.

For the record I don't think it would happen, but I thought pointing how how Marvell is actually a bigger company than Intel now measured by market cap was illustrative of how far Intel has fallen.
The term "bigger" doesn't mean much on its own. There are multiple ways to value a company. You can use discounted cash flow (DCF) models or a sum-of-the-parts (SOTP) analysis. In Intel's case, Wall Street deliberately focuses on using depressed cash flow models and refuses to consider SOTP valuations.

In my opinion, for Intel, a sum-of-the-parts approach would be more appropriate. This would include valuing Mobileye, Altera, the CCG business separately, and so on. That said, let them play their game. The market is a mean-reverting system over the medium to long term.
 
I would be careful about your assumptions on what Intel is and is not good at.

Is Intel a good company at developing and quickly bringing to market new Chips that are not x86 CPUSs?

Is Intel a good company at cost effective manufacturing?

Intel has tried to Pivot many times in the last 20 years. Intel should focus on what they ARE good at and not what they WISH they were good at
I think Intel should focus on making the best use of its existing resources. For example, instead of acquiring an entire company, why not acquire a part of a company and form alliances with the competitors of its competitors? Bringing in someone like Marvell's CEO could offer Intel a fresh perspective.
 
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