We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Marvell Technology Group {MRVL}
MRVL 54.07-0.4%May 20 4:00 PM EDT

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
From: Petz6/27/2006 7:09:49 PM
  Read Replies (1) of 162
Acquisition from Intel is an awful deal:

Is Marvel overpaying for XScale? I'm trying to back into exactly what Intel is selling for $600M and its sales.

Apparently it is the XScale and mobile phone processor/chipset business, but NOT including Flash. That would be the old WCCG group minus Flash.

WCCG was last broken out in 12/03 and it totalled $469M. A year later Intel told us that $399M of that total was "flash memory." So revenue was $70M in Q4 2003. To quantify it another way, it was 6.6% of the total revenue (WCCG 469 + ICG 592) of the two segments that now make up the Intel "Comm" group.

So if we assume that XScale sales grew 50% in the past 3.5 years, we get a trailing 12 months sales estimate of 1.5x$70Mx4, or $420M. If we assume 6.6% of trailing 12 month Communications revenues, we can only estimate 2004, because Communications wasn't reported after that. For 04 we get 5,027x0.066=$332M. Intel reported some big gains in cell phone processors in Q1 2005, so I think $420M for trailing 12 months revenue is reasonable. A final way to get a high-end estimate for sales is to assume that its employees are as good as the rest of Intel in revenue per employee. That is almost certainly NOT the case, since overall gross margin is 40% but way worse than that at Intel's non-core business.

So, CANCEL ABOVE, Forbes just told everyone it had sales of $400M and 1400 employees - see

OK, so why are they paying ~1.5 x Sales for a business that is not making money and has never made money. They aren't even getting production capacity! Next chipset crisis? Goodbye PXAxxx, sorry Marvel. How could they be so stupid?


BTW $400M/1400 employees = $280K/employee
Average for all Intel ~= $350K/employee
Average for AMD (2005) = $593K/employee !!!!!!!!!

Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext