George Hervey, Vice President of Finance, Chief Financial Officer Dr. Sehat Sutardja, Chairman, Chief Executive Officer, President, Co-Founder Weili Dai, Chief Operating Officer, EVP of Communications and Consumer Business

Michael Masdea, Credit Suisse First Boston Harsh Kumar, Morgan Keegan & Company Allan Mishan, CIBC World Markets Ruben Roy, Pacific Crest Securities Seogju Lee, Goldman Sachs Louis Gerhardy, Morgan Stanley Ambrish Srivastava, Harris Nesbitt Gerard Arnab Chanda, Lehman Brothers Ross Seymore, Deutsche Bank Sandy Harrison, Pacific Growth Equities Jeff Palmer, Friedman, Billings, Ramsey

I would now like to turn the presentation over to your host for today's conference, Dr. Sehat Sutardja, CEO, President and Co-Founder of Marvell Technology Group. Please proceed, sir. Dr. Sehat Sutardja, Chairman, Chief Executive Officer, President, Co-Founder: Thank you, Carlo. Welcome everyone to our First Quarter Fiscal Year 2007 Conference Call. Weili Dai, Chief Operating Officer and Executive Vice President of the Communications and Consumer Business Group; and George Hervey, Vice President of Finance and Chief Financial Officer, are joining me on this call. Today, I am pleased to announce the results of another record quarter for Marvell. Q1 revenue increased 43% from the prior year to $521 million. Also, our sequential Q1 revenue increase of 7% from the prior quarter marked our 34th consecutive quarter of revenue growth. During the quarter, we experienced strong revenue growth from both the enterprise and consumer market. We are continuing to have great success in applying our core technological strength in developing industry-leading solutions for an increasing number of new markets and applications. With this success, we are continuing to diversify our revenues, as well as provide us with many new high-volume market opportunities. As a result, we are positioned strongly to continue and build upon our track record of solid revenue growth. I will elaborate more about our opportunities and our business progress, but first I will have George give our Safe Harbor statement and provide more insight into our Q1 financial results. George Hervey, Vice President of Finance, Chief Financial Officer: Thank you, Sehat. Good afternoon, ladies and gentlemen. I would like to remind all participants that the following dialogue will contain predictions, estimates and other forward-looking statements covering subjects such as enterprise, consumer and emerging market trends, competition, customers, suppliers, products and demand, revenue growth, gross margin expectations, operating expenses, other income, accounts receivable, and inventory. Such statements will be preceded by the words like “expects”, “anticipates”, “believes”, “should”, “will”, “may” or words with similar importance. These statements include those relating to the pace of our business for fiscal year 2007 and the impact of the continued adoption of our solutions on our revenue growth. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements. They include the inability to further identify, develop and achieve success for new products, services and technologies, increased competition and its effect on pricing, spending, third-party relationships and revenues, as well as the inability to establish and maintain relationships with commerce, advertising, marketing and technology providers. We direct your attention to our Annual Report on Form 10-K, recent Quarterly Reports on Form 10-Q, recent current Reports on Form 8-K, and other Securities and Exchange Commission filings, all of which discuss other important risk factors that may affect our business, results of operations and financial condition. Please be reminded that we undertake no obligation to revise or update publicly any forward-looking statements for any reason. Now, moving to the Q1 financials. Marvell reports net income and basic and diluted net income per share in accordance with GAAP and additionally on a non-GAAP basis. Marvell's management believes that non-GAAP information is useful because it can enhance the understanding of the Company's ongoing economic performance, and Marvell therefore uses non-GAAP reporting internally to evaluate and manage the Company's operations. Marvell has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results. Today, we reported that net revenue for the first quarter of fiscal 2007 was a record $521.2 million, an increase of 43% over the $364.8 million reported for the comparable quarter for fiscal 2006 and a sequential increase of 6.6% from the fourth quarter of fiscal 2006. Non-GAAP net income, which excludes the effect of stock-based compensation, amortization of acquired intangible assets, and acquisition-related charges, was $141.1 million or $0.44 per share diluted for the first quarter of fiscal 2007, compared with non-GAAP net income of $84.2 million or $0.27 per share diluted for the fourth quarter of fiscal 2006. The $141.1 million non-GAAP net income for Q1 represents a 68% increase from the Q1 '06 non-GAAP net income. Shares used in computing non-GAAP earnings per share diluted for the first quarter of fiscal 2007 increased to 323.6 million, as compared to 310.7 million shares for the first quarter of fiscal 2006. Net income under Generally Accepted Accounting Principles, or GAAP, for the first quarter of fiscal 2007 was $75.3 million or $0.23 per share diluted, compared with a net income under GAAP of $63.5 million or $0.20 per share diluted for the first quarter of fiscal 2006. We have provided on our website in the Investors section at www.marvell.com a reconciliation of GAAP net income to non-GAAP net income for the quarter we're reporting today, plus the prior eight quarters. Now, I'd like to make some additional comments on our Q1 results. Our Q1 revenue of $521.2 million was another quarterly record for Marvell, and the 6.6% increase in revenue from Q4 to Q1 reflects strong business momentum that was above the high end of our guidance of a 5% to 6% sequential increase in quarterly revenue. The increase in Q1 revenue represents the 34th consecutive quarter of revenue increase. As we indicated in our Q1 guidance, seasonality in the PC market is a factor during the first half. Q1 seasonality was not significant and was more than offset by strong product momentum. During Q1, demand for our storage products continued to be strong as our customers gained market share. Demand for our Marvell SOCs continued at healthy levels, and the enterprise market was solid for both read channels and controllers. Continuing the revenue momentum from Q4, our Prestera switching solutions for the network infrastructure showed continued growth in Q1. On our Q4 call, we indicated that we would begin shipments to retail customers of our 802.11n products in Q1. During the quarter, Netgear and D-Link announced products based on our 802.11n solution, and shipments to them and other customers began in April. Finally, our embedded 802.11b and g Wi-LAN products continued to experience good demand, especially for gaming and imaging products. This broad contribution shows the strength of our core enterprise market positions, as well as the growing potential in the consumer market. Q1's strong product momentum positions us well for the balance of fiscal 2007. For Q1, our enterprise markets represented approximately 75% of revenue, with consumer the balance. We had four 10% customers in Q1: Western Digital, Samsung, Toshiba and Fujitsu. Our Q1 gross margin percentage of 55.1% was 20 basis points above our guidance and continues to be significantly above our long-term model of 53%. Our Q1 gross margin percentage continues to reflect a very high level of manufacturing efficiency, as well as a slightly richer enterprise product mix. Consistent with our Q1 guidance, our Q1 operating expenses increased by 90 basis points from Q4 fiscal '06. The increase reflects our continued investment in new product development, the cost associated with the migration to advanced process geometries, and the annual employee review process. Total headcount increased to 2,800 employees. Operating income percentage for Q1 was 28.6%, which was above our guidance of 28.4. Strong business momentum driving revenue growth, solid gross margin percentage and controlled increase in operating expense were the key factors. Shares used in computing non-GAAP net income per share for the third quarter increased to $323.6 million, compared with $322.6 million for the fourth quarter of fiscal 2006. The increase in shares was driven by the use of a higher average stock price for Marvell shares in the treasury stock method calculation. Our balance sheet continues to remain very strong. We were particularly pleased with our inventory. As we mentioned on the Q4 call, we had taken actions to reduce the days of inventory from the Q4 level of 86 days. These actions normally take two quarters to be completely reflected on our balance sheet, but we made significant progress in Q1. Our days of inventory declined to 79 days, and our actual inventory dollars declined by approximately $7 million. We would expect to see further impact in Q2, but we will continue to manage our production levels to ensure product availability for our customers. Q1 DSOs of 51 days were consistent with our model of high 40 to low 50 days. Q1 cash of $921 million was flat with Q4 and reflects a significant decline in accounts payable of $47 million. Now I would like to turn the call back to Sehat for comments on our business outlook. Dr. Sehat Sutardja, Chairman, Chief Executive Officer, President, Co-Founder: Thanks, George. We continue to execute strongly as we drive the adoption of our technology into a number of high-volume opportunities in both the consumer and enterprise markets. In the consumer markets, we continue to have great success with our wireless LAN solutions across an increasing number of exciting new applications. During the quarter, we commenced volume shipments of the industry's first three 802.11n solutions and we are now pleased to report that we have won 802.11n designs with all of the top five major retail suppliers. Given our broad design success, we believe we are positioned to be the retail market share leader for the 802.11n this year. By combining our complete solutions of 802.11n chips, microprocessors, Internet switching, power management and software, we are very cost-effectively enabling our customers a quick and successful product launch. With our scaleable Proseons (phonetic) based microprocessors, we are the only supplier to enable our customers to leverage the same software and hardware investment from both their gigabit as well as fast ethernet-based 802.11n solutions. During this quarter, we will continue to expand upon our leadership position with the shipment of the industry's first 802.11n USB solutions as well. Given the strength and quality of the products being launched by our customers, we believe 802.11n is poised to have a very strong year. This is despite the misinformation being placed in the market from competitors who are trying to stall the initial market deployment in an attempt to try and catch up. In addition to the strong market launch of the 802.11n, we are also excited to see the continued broad rollout of wireless LAN technology. This is evidenced by the increasing number of hotspots, as well as citywide deployments of free or low-cost WiFi. These deployments, which are providing millions of people free or low-cost Internet access, are largely made possible by being able to leverage existing infrastructure. However, in developing countries, there typically is minimal or nonexistent infrastructure or the economics to justify such deployments. In such countries, mesh networking will be required to provide such wireless Internet access. We have been working for a number of years to develop such solutions. And we are excited to announce our first wide scale deployment of our technology with our participation with the One Laptop Per Child program. This initiative was created to distribute very inexpensive laptops to provide children access to the knowledge and modern forms of education. We are pleased that Marvell's wireless LAN solutions are uniquely qualified for these new laptops and will serve as key wireless communication infrastructure for developing countries. Our wireless LAN solutions will enable the laptops to act as nodes in a mesh peer-to peer and ad hoc network, allowing several hundred machines to share a single online connection. With our extreme low power and embedded microprocessor architecture, our wireless LAN solution can still support the mesh network even when the power to the laptop is turned off. This is just one high-volume example of how we plan on applying this unique wireless LAN meshing capability. We're also going to leverage this important technology into many other high-volume consumer devices as well. Now, moving to the gigabit ethernet. In the infrastructure market, we also continue to experience very healthy growth as the market continues its transition from fast ethernet to gigabit technology. We continue to lead the market with the most advanced and feature-rich total solutions across all segments, ranging from the high-end metro and enterprise to the value-based SOHO equipment. Our customers who base their system on our advanced solution continue to enjoy strong success in the markets against their competition. In addition to the continued market growth from the transition to the gigabit, we also continue to employ great success in expanding our content in these systems with our Total Solution approach. For the client connection, our Yukon products also continue to enjoy great success. We are successfully expanding our strong presence in the white box market to now shipping into some of the highest-performing PCs, laptops and servers in the market. Our Yukon controllers are now shipping to Tier 1 customers, including Apple, in addition to our continued very strong share of the white box market. Now moving to the hard disk drive market. The pending acquisition of Maxtor by Seagate has created some near-term questions about market share. The near-term market dynamics with this pending acquisition makes it hard to determine how much market share Seagate will maintain as the acquisition still needs to be played out. With these near-term events, we remain very focused on the execution of our business strategies, especially our long-term strategies. With the strength of our technology, we continue to build upon our strong relationship with Seagate, and we're working hard to support them in many different areas to address their future needs as we grow our business with them. As always, we will take a very conservative financial view of such dynamics. But internally, we continue to be extremely aggressive in even further expanding our technologies to provide solutions that will enable our customers to succeed and stay ahead of their competition. As we execute and stay focused on this task, we will continue to enjoy strong growth and have great success in this very large and healthy market. As we survey the competitive landscape and our further opportunities for growth, we remain very excited about this market and our ability to continue and expand upon our leadership position. Now, quick update on our entrance into the optical storage market. We continue to make progress with our customers as they work on developing their first products based on our technology. We are also hard at work in further broadening our product portfolio in this area. I view our entrance into this market as very similar to our entrance into the networking market a while ago. We time our entrance into the networking market to capitalize on the transitions to the gigabit ethernet from fast ethernet. Our entrance into the optical storage market is similar as the market is about to transition to a high-definition blue laser-based DVD from red laser technology. We believe this market transition will occur at a much faster rate than the gigabit transition based upon its historical customer adoption patterns. Our timing is ideal as we plan on first getting entrenched with our red laser DVD solutions, which will then position us strongly for the upcoming transition to high-definition DVD solutions that will be fully backward compatible to the red laser technology. We look forward on giving updates as our customers prepare for their initial product launches. Last, before I turn the call back to George, I want to give a quick update on our move into the printer market. Earlier this month, we successfully closed our purchase of the printer ASIC business from Avago Technologies. We are excited to have this talented group of employees join the Marvell family. We view the printer market as another very large multibillion-dollar market for Marvell to apply its technologies. By leveraging all of our proven technologies such as our mixed signal core connectivity, such as ethernet, wireless, our robust USB, as well as our high-performance microprocessors and our ability to utilize very advanced processing technologies, we will be able to greatly expand the performance and integration levels used in the market today. With such solutions, we look forward to enabling our customers' success and ability to offer the most competitive solutions in the market. I would now like to turn the call back to George for additional comments regarding our financials and guidance for the next quarter. George Hervey, Vice President of Finance, Chief Financial Officer: Thank you, Sehat. As mentioned on our Q4 call, we would be updating our annual and quarterly guidance once we had completed the acquisition from Avago of their printer ASIC business. We completed that acquisition during the first week of Q2, and the guidance that we will be providing on this call will include the printer ASIC business. Before moving to the guidance, I also want to provide an update on the other parts of Marvell's business. As I mentioned, Q1 was a strong quarter for Marvell, especially during the seasonally slower period in the PC market. We continue to make progress on many of the exciting opportunities that we have in the embedded wireless LAN market, as well as first-to-market position in the 802.11n market. Additionally, our increasing design wins in the network infrastructure market should provide additional revenue opportunity as we move through the balance of fiscal '07. As Sehat mentioned in his comments, there has been a major acquisition in the storage market: the Seagate's planned acquisition of Maxtor. Our experience over the past 10 years with these acquisitions has led us to take a conservative view regarding continuing revenue for Marvell from the acquired company. While we remain very optimistic regarding our current and long-term position at Seagate as we work with them on their future product roadmap, we believe it is prudent to assume that our current revenue from Maxtor products will be phased out as of the end of Q2. Based on these factors, we are increasing our revenue estimate for fiscal '07 from the previous guidance 2.250 billion to 2.30 billion to a revised range of 2.370 billion to 2.425 billion. The majority of the increase is from the printer ASIC business. Gross margin percentage for fiscal '07 should be about 53.5% plus or minus 30 basis points. Non-GAAP operating expenses should range between 26% to 27%, and operating income should be approximately 27.5% plus or minus 25 points. Now moving to the Q2 guidance, our business momentum in Q1 was strong, and we enter Q2 expecting growth. Our visibility remains good with ordering patterns from our customers remaining consistent with prior quarters. As has been the case in past years, both Q1 and Q2 should experience some level of seasonality, and that was the case for Q1. We are comfortable that our strong business momentum will more than offset the seasonal softness and expect Q2 fiscal '07 organic revenue to increase to approximately 550 million to 555 million. Additionally, we expect the Q2 partial quarter revenue dollar contribution from the printer ASIC products to be $30 million. Combining the organic growth and the printer ASIC products, total revenue for Q2 should range between 580 million to 585 million. As we discussed in our Q1 annual guidance, and excluding the printer ASIC products, beginning with Q2 fiscal '06, we expected to experience a modest decline in gross margin percentage as we progressed through the balance of fiscal '07, with total gross margin percentage for fiscal '07 targeted at 54% plus or minus 50 basis points. Consistent with that expected decline and including the printer ASIC products, Q2 fiscal '07 gross margin percentage should be 53.4%. We are very focused on cost reductions and yield improvement, and would expect to see improving gross margin percentage in the second half of fiscal '07. Including the expenses from the printer ASIC products, operating expenses for Q2 should increase about 50 basis points from Q1. We expect interest income to decrease by approximately 700,000 and our balance sheet indices remaining strong. Shares used in computing non-GAAP net income should increase to 324 million. Now let's turn the call back to Sehat. Dr. Sehat Sutardja, Chairman, Chief Executive Officer, President, Co-Founder: Thank you, George. That completes our commentary. Carlo, would you please poll for questions?

Q - Michael Masdea: Yeah, thanks a lot guys. Maybe just sort of, since we've been so focused on Maxtor here, maybe we can step back a minute. If you take a look at your markets that you're not addressing now or some of the market opportunities that you see out there, if you kind of think about what that looks like to you, how does that compare to maybe, say, where you were three years ago? Do you think there was as many opportunities, or is it getting tougher to find good market opportunities for you guys? A - Sehat Sutardja: Yeah, if you look at over the last -- if we can just look beyond these last three years, every year, we have been increasing our market share in the storage part of the business. The market opportunity continues to grow because there are new market opportunities for storage, and I think the most recent one is the iPod types, as well as the DVR types of markets. So there's true consolidation in the market. The consolidations mean fewer customers to chase after. But the opposite to that is each customer is going to be getting bigger. And the customer, as the customer gets bigger, they're also looking for better, better, better solutions -- they need to lower their risks in their business. So having access to better technology is an important criteria. And that is where our strength is, building better products, better-quality products, lower-cost products, better performance. A - George Hervey: And Michael, we've made commentary, and didn't say today, but we have had over the last couple of years said that one of our objectives is to continue to bring products into markets to increase the total available market to us. The steps that we have done over the last few years, wireless LAN, power management, optical storage and other things that we're also working on -- the TAM for us is actually expanding quite rapidly. So we are not wanting for revenue opportunities. Q - Michael Masdea: Great, thanks. And then the PC market, there's been a lot of concern about how that is looking. From your perspective, do you see any kind of inventory problems out there or any sort of demand issues for the rest of the year in the overall PC market? A - George Hervey: That is a hard question to -- I think our guidance hopefully puts to rest many of the questions that we have been getting recently about some of these things. We are obviously in those markets. We're dealing with the issues in those markets. That being said we are very comfortable that we have very exciting opportunities to grow our business. So I can't address specifically the one particular comment except to say, Marvell is aware of all the things that happened in the market because we are a key player in the market. And our guidance and so forth reflects those things. Q - Michael Masdea: Great, just last question on the manufacturing side. When it got tight last year, you guys did a good job of building up some inventory and kind of buffering yourselves. You're bringing it back down now. If you look in the second half, are you concerned at all about bottlenecks either on the front end or the back end? And will you start to address that as we get later in the year with your wafer starts? A - George Hervey: Well, my commentary kind of left a little opening there for us to do exactly that. We watch this very closely. We've taken the steps to come down a little bit. But if we don't -- if anything comes up that makes us concerned, we can quickly move it in the other direction. Q - Michael Masdea: Great, thanks a lot.

And sir, our next question is from the line of Harsh Kumar with Morgan Keegan. Q - Harsh Kumar: Hey guys, a couple of quick questions. First of all, kind of housekeeping stuff. Maybe -- I didn't see cash go up that much. Can you give us how much cash was generated during the quarter, George? And then I've got one more follow-up. A - George Hervey: Well, actually, cash for itself is flat this quarter. We had a significant decline in our accounts payable, which is obligations that we wanted to bring down. So that was about $50 million. Q - Harsh Kumar: Okay, and was that cash generated during the quarter or was the account receivables part 50 million? A - George Hervey: No, it was cash we generated during the quarter. Q - Harsh Kumar: Okay, great thanks. A - Sehat Sutardja: And we are also investing in our office sites, building our office. Q - Harsh Kumar: Fair enough, that is very helpful. And then maybe looking out a little bit longer term with respect to another issue, the delay of PS3, George and Sehat, can you tell us maybe the expected timing when you would start to see the ramp associated with that business and what your goals are for maybe in units per month or dollars per month from that particular business? A - George Hervey: We don't ever comment specifically on the expected levels from any customer. I think we would point you first of all back to the comments that -- I'm sorry -- that Sony has made regarding the timing, which we are very excited about. I think they firmed that up that it is going to be released in the November time period. So we are very pleased with that. I think you could realistically do an analysis that says you have to backup from that time period from a production standpoint to be ready, and we standby to support that ramp as it occurs. Q - Harsh Kumar: Thank you very much.

And sir, our next question is from the line of Allan Mishan with CIBC World Markets. Q - Allan Mishan: Hi, can you hear me? A - Sehat Sutardja: Yeah, we can. Q - Allan Mishan: Okay, great, a couple of questions. First, I know you don't necessarily break it out like this anymore, but can you tell us, ex any of the effects of the acquisition from QLogic, if storage was flat in the quarter, if it grew, if it was down, just trying to get a gauge for seasonality and how it affected you? A - George Hervey: Well, we don't break -- as you know, Allan, we don't go to that level. But I would say the comment I made about our customers gaining market share is a very significant comment. And I think if you think about some of the customers that have reported, that comment kind of ties to that. So these are some of the factors that allow us to deal, and the answer would be yes, the data storage business grew. Q - Allan Mishan: Okay, great. And then over on the wireless LAN side, one of your competitors has weighed in on what they think their market share is in U.S. retail. Do you care to tell us what you think your view is of the market? A - Sehat Sutardja: Maybe Weili, you want to talk about it? A - Weili Dai: Sure. I think at the end of the day, you have to look at what is being shipped. And we believe and we have shipped the most volume in April. And we have very robust 11n solutions. Q - Allan Mishan: Right. A - George Hervey: And our design wins continue to pile up, as Sehat mentioned in his comments. So I think we feel very -- I think it was -- I think I'll leave it at that. Q - Allan Mishan: Okay, great. And then when do you think we can go out and actually buy a laptop that has a Marvell 802.11n embedded in that? When do you think the timing is? A - Sehat Sutardja: I think the most important thing first is we need to proceed in the retail segments. The laptops or the PC side historically tends to happen a little bit later. The more the retail markets are using our technology, the more likelihood that more and more laptops or PCs will come with our technology. So obviously, the priority for us is to get the – those excess points will be in our technology. A - George Hervey: In other words, we have taken a very conservative view of that part of the 802.11n market for this year. We believe the bulk of the revenue opportunity this year remains in the retail, but there could be potentially some very late in Q4. Q - Allan Mishan: Okay, thanks very much.

And sir, our next question is from the line of Ruben Roy with Pacific Crest Securities. Q - Ruben Roy: Can you hear me? A - Sehat Sutardja: Now we can. Q - Ruben Roy: Sorry about that. George, I think someone asked this a little bit about the storage business, and I assume you had some growth in the quarter. Can you just talk a little bit about the different areas, maybe mobile drives versus small form factor and desktop and where you saw relative strength, weakness? Was the growth all from one customer gaining market share, etc.? A - George Hervey: We don't give that level of detail, but if you go back again to what I said, we saw good demand in the enterprise market for both channels and controllers. We see market share gain in the desktop market and good demand, good continuing demand for mobile SOCs, which includes both laptops and the 1.8-inch drives. Q - Ruben Roy: Okay and Sehat, you mentioned some of your optical drive customers should begin shipping soon. Are you folks still expecting some revenues in fiscal '07 from that business? A - Sehat Sutardja: No, we are assuming zero for this year. We need to be very conservative. Every time we are introducing new technology, new products, any delay could happen. So we make assumptions of zero revenue, even though we are excited from the engineering side that a lot of progress has been made. Q - Ruben Roy: Okay, and then finally, the Avago, it's pretty much a full quarter of revenues coming up. What do you expect the growth trends to look for that business going out throughout the rest of year or maybe just for the year? A - George Hervey: Well, again, I think you have to look at the annual guidance that we updated, because I said that a majority portion of that change is effective because we will have the printer business for three, one partial quarter and two full quarters. So this is definitely a growth business for us. We have been working very, very hard with HP since we announced the transaction. And I think we are getting increasingly comfortable that there is a lot of opportunity there for us in this business. So it won't be flat quarter-to-quarter. A - Sehat Sutardja: Yeah, and if you look at the Avago acquisition and for the long-term strategy, historically, that group was 100% sole-sourced internally. It's not the case, obviously -- it is significantly less than 100%, obviously, at this point. But that is where lies a huge opportunity for us, two three years down the road. So this is a very, very strategic acquisition two to three years down the road. Q - Ruben Roy: Thanks Sehat.

And sir, our next question is from the line of Seogju Lee with Goldman Sachs. Q - Seogju Lee: Thank you. George, just in terms of the full-year guidance, if we think about it, the organic piece, just help us think about what fills in for the Maxtor piece that you are now assuming tails off after the current quarter? That would be very helpful, thanks. A - George Hervey: Again, I said in my commentary there that we are excited about the continued embedded wireless LAN opportunities that we have. We've mentioned that as actually being our largest growth driver going forward. And we continue to feel very good about that. We are especially strong in the gaming area. So that is going to be very -- from a revenue standpoint that will be very good for us this year. And then the other areas including imaging and personal, like PDAs, and then of course, the cellphones -- all very, very strong opportunities for us. So that clearly is a good. And then of course the 802.11n, as I said, is really something that we're leading on that, and that's something that is going to continue. Again, Sehat mentioned in his commentary about market share gains that happened -- or market share shifts, I should say, that happened in the effective acquisitions. I mentioned it also, so you should be considering that in your overall thoughts about us. And then, of course, finally, networking and the gigabit -- we're very strong there. So we have a lot of things that allow us to -- even when something doesn't go exactly the way we had hoped it would go, and obviously Maxtor is a case in point, it isn't -- we are flexible and large enough with a number of things going to be able to handle something like this. A - Sehat Sutardja: Just one, with regard to Maxtor, specifically in the storage business, every time we had a design win, we never put the actual potential size of the business in our forecast until we got good production. So we are very consistent in this case for the last 10 years that we're running the business in the storage business that we will forecast the revenues only when the customer goes into production. So in this case, things just didn't work out as we planned, but no harm to us yet. So we'll just find other customers picking up some of the shares anyway. Q - Seogju Lee: Great, thanks, good luck. A - George Hervey: Thank you. A - Sehat Sutardja: Thank you.

And sir, our next question is from the line of Louis Gerhardy with Morgan Stanley. Q - Louis Gerhardy: Good afternoon, great job. I wanted to ask you on the 160 gig platforms overall, not just focused on Maxtor, but for the rest of the year, would you expect your overall 160-gig revenue to grow despite your assumption that you will have zero revenue from Maxtor starting in the October quarter? A - Sehat Sutardja: 160 -- pretty much everybody, all our customers are transitioning to 160. So I hope by the end of the year, everybody will be 160 primarily. Q - Louis Gerhardy: Okay. And I didn't hear you talk about the PAS or PHS business. Can you give us a sense of when that would start and what type of market share you think you could get at your key partner? A - George Hervey: Right. Well, again, that is part of the UTStarcom acquisition that we did. The revenue opportunity there is pretty modest at this point, which is not the reason, we didn't do that acquisition for the revenue stream. We did it more for the software capability for handsets. So I would say it's pretty small, Louis. It may have a potential to grow in the future, but for right now, it is really insignificant to us. Q - Louis Gerhardy: Okay. And then on the printer business, can you just give us a sense of what your overall market share is now with Avago, and then how soon until you can really start to penetrate other printer customers? A - George Hervey: Well, I think, as Sehat said, Avago has the largest market share at HP, but not the majority market share at HP. So I think that’s kind of the status of where they are. As I said earlier, we are excited because I think we are going to be able to positively affect that. And then maybe you want to comment, Sehat, on some of the other potential customers or areas of the printer market that we're going after. A - Sehat Sutardja: Sure. We talked about that in the last couple conference calls, so we are also engaging with other printer customers through our Proseons based processors. So the key -- one thing is – well it's not just processors, processors, wireless LANs and mixed signal capabilities. So those things are ongoing. The progress is ongoing. So we are also very excited about those opportunities, but that is completely independent from the Avago. The Avago team is fully dedicated to HP. Q - Louis Gerhardy: Great thank you.

And sir, our next question is from the line of Ambrish Srivastava with Harris Nesbitt. Q - Ambrish Srivastava: Hi thank you. George, thanks for clarifying the air around Maxtor, it makes life easier for a lot of us. A question on inventory. Should we expect next quarter inventories to trend down to the 60, 65 days target that you have? A - George Hervey: That would be the objective, Ambrish. As I said, it takes two quarters to factor itself all the way through -- the first part of it. Assuming that we don't make any changes in our manufacturing strategy, which I said we reserve the right to do, based on demand and so forth, you should see some further trending down in Q2. Q - Ambrish Srivastava: Okay. And then a follow-up, first, could you please tell us what is your expectation in terms of percent shipments for 802n for the market, not for you -- for the market this year? A - Sehat Sutardja: For the market, it is hard to predict. The 802.11n is primarily targeted for consumers for HDTV distributions in the home. So eventually, this thing has to be 100%. But in the meantime, during the transitions from 11b, g, a to 11n for PC and laptops, it is really driven by channel push. I will not -- I don't see 100% need for transition to 100% in the laptops any time soon, until the price goes to the point of very, very competitive to the existing b and g. At this point, it is not practical to be the price of the regular b and g because the complexity is significantly more complex. But this technology is a must in the home if you want to deal with video distributions. So if you look at the video HDTVs coming, the Olympics is coming, the FCC-mandated HDTVs in less than two years from now. So my expectation is for the home 802.11n in two years will be close to 100% at home. Q - Ambrish Srivastava: And so this quarter, in the current quarter, the shipments should still be pretty modest then, right? A - Sehat Sutardja: Yes. By the way, we mentioned this 311n. We don't say 11n. So a lot of people will limit the shipment -- only people that really, really care for the best performance will buy the 311n. But it is the important part for us, regardless of the size is smaller initially, because we want to have all of our products fully debug in the field, so that when the real 11n is available, we will have the most mature product in the market. A - George Hervey: And that is an important point also for the question on when it gets adopted in laptops. They want the standard product. A - Sehat Sutardja: And our product also has a built-in embedded microprocessor so we can upgrade a lot of features that maybe missing or maybe introduced late in the game through downloading new key codes to those microprocessors. Q - Ambrish Srivastava: All right, thanks guys. A - George Hervey: Thank you.

Sir, our next question is from the line Arnab Chanda with Lehman Brothers. Q - Arnab Chanda: Thank you. Few questions, maybe the first one for George. George, in the guidance that you gave for the year, are you assuming positive effects, say if Seagate loses share some of your customers are gaining? Or what type of qualitative assumptions are you making there? Thank you. A - George Hervey: I would say, Arnab that what I said about how Q1 went. And that, by the way, is not 160, that is 80-gigabyte technology, because the 160s are just coming to the market. We saw -- I believe our customers saw the effect of some market share shifts. And so I think that is probably, as Sehat said, this stuff does occur in these major acquisitions. So as the 160s become a more, larger percentage of drive shipments as we go through the end of the year, you probably see a similar type of thing, yes. We would expect that, yes. Q - Arnab Chanda: Thanks George. Maybe a question for perhaps Sehat or Weili. You talked about the UTStarcom acquisition. Obviously you didn't buy it for the TAS business. You talked about software. Should we assume an entry into the cellular market in calendar '07? Or is that still further out? A - Sehat Sutardja: We'll just have to wait and see, right? Because it is an area that a lot of people ask us for the last, I don't know, five years. And so every year, probably you can assume it's getting closer, but this is not something that we want to take it lightly. We don't want to just go into -- we don't want to go to the cellular market pre-announcing our entrance before we are ready. We are far from being ready. It is just a tough business to get into. If we want to get into it, we better be serious. We cannot just play it casually on the peripheral, exactly. But, having said that, we're working on embedded wireless WiFi's, a lot of different technologies, power management, a lot of these different technologies that will be useful in cellphones so, at least we will be ready when the time comes. Q - Arnab Chanda: Thank you. A question about 0.11n, maybe when you started in wireless LAN, you were not a top tier player, but now in both embedded as well as in 0.11n, it seems like you are definitely a top tier player. Maybe Weili, in the communications group, do you think we should expect that business to be maybe as good, as big or maybe even bigger than, say, your client or infrastructure business? And what type of timeframe do we think that can be possible? A - Weili Dai: It really depends how quickly the 11n transition starts, right? But we are absolutely targeting to be a major player in that space. Q - Arnab Chanda: Okay, and then just one last question for sure. You talked in the past of how Avago will help you increase the ASP of the content in HP printers with some of your other silicon technologies. When we think about the growth rate of Avago, how should we think about that? Is there a multiple off the unit growth rate? Or if you could give us a little bit of a sense of that, that would be great. Thank you. A - George Hervey: Yeah, I think, again, as we do with all of our acquisitions, we give you the starting point, which we have again done here. And realize that that is not a full quarter, so there's obviously a little bit higher full-year run rate than the $30 million for full quarter. I think the way we will have to address that, Arnab, is again with our sort of qualitative commentary about what we're doing with the business and the penetration that we think we're making at the customer. And then we will probably leave it at that and comment about its growth as it actually happens. But we absolutely believe this is a significant growth opportunity for us with HP. A - Sehat Sutardja: Within a -- two years -- a year to two years' timeframe. Q - Arnab Chanda: Thank you very much. A - George Hervey: Okay.

And sir, our next question is from the line of Ross Seymore with Deutsche Bank. Q - Ross Seymore: Hi guys, just a question on the storage side of the business. You mentioned about some caution on the market share shifting and then talked about focusing on Seagate. Can you just remind us where you are today with Seagate, I believe just on the enterprise side, and where you might see some opportunities as time progresses? A - George Hervey: Let me get the first part and maybe you can -- so if you look at Seagate's enterprise business, for the read channel solution, we are 100%. And we have been that way for many, many years now. So we are very tightly tied to Seagate. So going forward, I think Sehat will probably make the comments there. A - Sehat Sutardja: Sure. We've been working with Seagate -- just from a historical basis, Seagate is our first customer. So we have more than 11 years, at least more than 10 years, 10½ years to 11 years of relationship with Seagate. So along this time, obviously, we started from the enterprise, we're single source, 100% single source. And we just don't get single source because they are nice to us; it's because we have the best product in the world. Over the last few years, obviously, we have been working with Seagate closely in many different areas to do higher integrations. And some of those things – and are just starting to pan out. So as we have also proven, and again part of it is, of course, when we started the Company 10 years ago when we were working with Seagate, we were only a company with only seven or eight people when we started the Company. So it took us a little bit longer to get Seagate to be comfortable dealing with us, until about a few years ago, they noticed that we're really a big company that they can trust. So we are running a lot of engagement with them. So we are very excited about the opportunity in the next few years. Q - Ross Seymore: Just a follow-up on that -- do you think the eventual move of the enterprise-level products to SoC is the inflection point that allows you to get in with some of the technology from QLogic? Or are there other opportunities in some of the other form factors or price points for you guys? A - Sehat Sutardja: So it’s -- you probably heard from Seagate that Seagate is working on unified architecture across the platform. So whether it is enterprise or desktops or mobile, they are all going to be based on single-platform architecture, meaning that the same software platforms, same microprocessor platforms, indicators which will be ARM processor platforms. So obviously, a supplier that can provide the complete architecture across the board will have a good opportunity to gain more market share. But these things take time. It's not going to be easy to -- the transition is going to take some time. But it is going to be a huge, huge opportunity for us. Q - Ross Seymore: And I guess the final question on this point is, do you have any clue from Seagate whether the dual-source strategy that has worked for them so far is going to be something that would continue in that unified architecture strategy that you discussed? And I guess a follow-up to that that you can answer at the same time would be, would you and Marvell be willing to do a dual-source strategy? A - Sehat Sutardja: Whether it is a single source or dual source is not -- the way I look at it, in my opinion, it has nothing to do with whether the customer needs a dual source or a single source. We have done a lot of business with a lot of customers with single source and they are very, very successful. And they are very cost-competitive. So we as a company, when we do business with our customers on a single source basis, we are treating our customer as if they have multiple choices. In the case of Seagate, where they're moving to the single architecture platform based on ARM, obviously they have the capability to do dual source or triple source if they wanted to. So our job is to make sure that to show to Seagate that even though they have a capability to do multiple sources, if we can give them comfort feeling that a single source from us is a better source compared to a multiple source, then, okay, they will pick that. Or maybe they will not pick 100% of that. But that is okay. In any case, our job is to make sure that they feel comfortable to go to a single source. Q - Ross Seymore: Okay. And then one follow-up on a little bit of a different topic -- on the gross margin side of things, in your guidance for the second quarter, with that drop sequentially, would you care to give us any idea of how much of that drop comes from the organic side of the business, if any, and how much is because of the inclusion of the Avago business? A - George Hervey: Sure. So again, what I had said leading into giving the actual guidance, I said if you remember back to the Q4 call, where we gave the annual guidance, we did expect gross margins, which did not include Avago, to average 54%, plus or minus 50 basis points, for fiscal '07. So we were saying that you should expect a modest decline as we go through the year. And then on top of that, there is the impact of Avago, which is an ASIC business, and it therefore has a different margin structure than what our traditional business is. I think the key point is Q2 most likely is the low point of the gross margin. As I indicated, we thought with yields improvement and so forth, we might -- we would expect to see some improvement through the balance of the year. Q - Ross Seymore: Great thank you.

And sir we have a question from the line of Sandy Harrison with Pacific Growth Equities. Q - Sandy Harrison: Thanks. Just kind of a technical question, since a lot of the other ones have been answered. Looking at your gigabit ethernet products and some of the success you have had there, what are some of the technical advantages you guys have if you look at some of the physical layer products obviously 525, but when you look at the switch fabric and the success you had with that, what are some of the technological things that you guys have that the others don't that allows you to do what you have been able to do? A - Weili Dai: Well, first of all, obviously the performance is very key, and also, the complete solution offering -- we have a complete solution, meaning silicon software, right? We have reference design, and we address all the way from very sophisticated high-end chassis to stackable pizza boxes all the way to the SOHO market. So that really makes a big difference because time to market is everything. And the quality is another piece because we have very sophisticated engineers that are very experienced, understand their market and understand the system side or requirement very well. So our products are absolutely robust. So it is very, very key. That is why you see in the retailer space, companies today can deliver a very robust cost-effective gigabit solution. A - Sehat Sutardja: And I want to add a little bit is that we started from the very, very high end. Historically, we when we entered this business, we entered from the very, very high end. Markets, they're very, very demanding in terms of technology requirements. And so over the last three, four years, three years or so, we’ve migrated that technology into the mainstream higher volume markets, and combining with our capabilities to do high integrations, building lower power circuits, some of the technology there we borrowed from other groups, including from storage groups. So we were able to build products that have super-high integrations, for example, our connector 24-port chips -- 24 port gigabit chips. We had three ports or four ports of 10 gigabit on a single device with no external components except the device, which there are too many of them to be integrated on a chip. But other than that, it's pretty much a single-chip solution. So that is for the high volume market. For the ultra-high end, we're building chips that have, like, I don't know, like a thousand pins of complexity. So it's a very, very complex product. But the software is pretty much similar, whether it is the high end to the low end. We have unified software infrastructure. So that makes it easy for customers to scale their business. Q - Sandy Harrison: Got you. And then when you look at -- you guys were talking about doing some wireless LAN in the handset market. Has that started to take off? If it is, what can we sort of look for as your participation in the handset market, which seems to be an explosive one for this year, and then something that you guys might be shooting for next year? A - Sehat Sutardja: Sure, that’s what we said in the previous few calls, pretty much a majority -- a significant majority of the handsets are using our embedded WiFi technology. So we work with practically everybody in the market. So some of them are already in production, some of them are still in the pre-productions and the qualifications with carrier -- carriers continuing building, improving their software platforms, their service packages. So there's a lot of activities between us with the cellphone providers, the cellphone manufacturers -- between us and the cellphone manufacturers and the carriers. So there's a lot of work going on between the three parties. Q - Sandy Harrison: Do you think that the cellphone market or cellphones could be 10% of your business at some point in the next two years? A - George Hervey: Well. We don't want to get pinned down to that, Sandy. It is a big, big market out -- it's 1 billion cellphones being built annually now. So it is a very, very big market. Q - Sandy Harrison: So I'll ask you another way -- whether you think your dollar content per handset would participate in if you guys are successful? A - George Hervey: It varies by the technology that is being input. Today, we commented around $5. But that is today. Who knows what it will be two years from now. A - Weili Dai: When it is the right time, we will update you. Q - Sandy Harrison: All right thanks guys.

And sir our next question is from the line of Jeff Palmer with Friedman, Billings, Ramsey. Q - Jeff Palmer: Hi, a question for you, George. Can we take a few minutes to look at what is going on with the accounts receivable? It was up pretty significantly sequentially. How was linearity during the quarter, could you give us some color on that? A - George Hervey: If you remember back to the last call, we made a comment that actually our day sales outstanding dropped down to 45 days, which is way below any historical number that we've run. And that was because of the Chinese New Year. We got some advance payments from some of our larger Asian customers for when they went on Chinese New Year. So the actual AR in Q4 was artificially low compared to what was usually there. Our linearity could not be better. I think right now, something like 98% of our receivables are current, which is an unbelievable percentage, and the linearity is very good. Q - Jeff Palmer: Okay. And then can you give us some color, if you wouldn't mind, on your backlog -- I don't know if you provide that in terms of how does your 0 to 90 day backlog look versus let's say your 90 to 180 day backlog? How are you feeling about maybe the potential of any double ordering or anything like that in your backlog at this point in the outer times? A - George Hervey: Your question was exactly -- the answer is no, we don't give specific backlog numbers except to say, as I said earlier, the ordering patterns from our customers has remained pretty consistent. And remember that a lot of the chips that we do for our customers are custom chips. And so they will give us reasonable visibility into those demands because they can't get caught short of having product. So our most -- which is a very large percentage of our business, that coverage is very good. And then of course, the rest of the market, which is based more likely on price and so forth, we are like everybody else. Q - Jeff Palmer: Okay. And then just one more question, one clarification. George, can you maybe give us a little color on your inventory? I know -- just in terms of how much of it is WIP versus FGI? How are you feeling about that at this point? A - George Hervey: Our objective when we build buffer is to build it into die banks. Q - Jeff Palmer: Okay. A - George Hervey: And does that give us the most flexibility from an assembling and shipping to the customer. Our concern in the latter part of last year was that the back end was so tight that we were concerned about the ability to respond quickly to customer demand. So we moved part of the inventory further along in our manufacturing process. And of course, in a simplistic semiconductor cost accounting here, 50% of the cost is in the die and 50% is in the back-end processing. So as you move that along, you gain inventory value; you don't gain any more units, but you gain more inventory value. So we are trying to move that back to a more traditional mix. Q - Jeff Palmer: Okay. So is that traditional much more 50:50, 25:75, I mean, just kind of a level metric, maybe? A - George Hervey: We don't provide that. Q - Jeff Palmer: Okay. And then last, it's more kind of a clarification -- and I echo everyone else's comments on the clarity on the Maxtor situation, but Sehat, you earlier made a comment that given the conservative nature of how you do forecasting and guidance, is it safe to assume that when you gave us the full-year guidance last quarter, George, did that include the Maxtor business in it? Was there an assumption of a certain level of business from Maxtor? Was that in the guidance? A - George Hervey: Sure. There was a program that we knew we were going to begin shipping in Q1, which by the way we did. So that product has launched in the market. But then as Sehat said, we will take a very conservative view, and so I know there was a bunch of numbers back around by people thinking how much our original guidance had in it for Maxtor. In my commentary, it was nowhere near that level. We are very comfortable with what we had in there. Unfortunately, it is not going to realize -- well, I will be careful here -- it is not going to realize that level from Maxtor. We may still see a level equal to that because the 160 market is going to be very good. And we are the provider to everybody else in the market. Q - Jeff Palmer: Will you have to take any inventory write-offs, given that maybe you built some inventory for that program that maybe not now will turn into revenue? I'm sorry, George, is that no? A - George Hervey: That is a no. Q - Jeff Palmer: One last technical question, what is Marvell's current position on perpendicular recording? Haven't heard a lot out of you folks on solutions -- I know you guys are the leaders with a lot of different technology. Can you give us an update on that? A - Sehat Sutardja: Sure. We are probably one of the -- we were probably the first to introduce the perpendicular recording read channel about maybe like three, four years ago. In fact, if you look at some of the publications in the last three, four years, they're pretty much based on our perpendicular recording channel in terms of when people publish their recording entities. So this is not, I mean every single read channel that we built are all perpendicular today, whether they are using it for perpendicular or not, it's not important. They are all perpendicular read channels. Q - Jeff Palmer: Okay. So that's maybe more the drive manufacturer deciding that’s the direction they want to go, but from your technical perspective, it is a non-issue, you can support it? A - Sehat Sutardja: Yeah, it is a software switch, you flip a bit and it is a perpendicular. Q - Jeff Palmer: Great. Thank you very much, gentlemen. I appreciate the clarity on Maxtor. Thanks. A - Sehat Sutardja: Thanks.

And with that, ladies and gentlemen, we are out of time for the question-and-answer session. I'd like to turn it back over to the group for any closing remarks. Sehat Sutardja, Chairman, President, Chief Executive Officer: Thank you. This completes our Q1 fiscal year 2007 conference call. I would like to thank you all for joining us, and look forward to updating you next quarter. George Hervey, Chief Financial Officer: Thank you very much. Weili Dai, Chief Operating Officer: Thank you.

Ladies and gentlemen, we do thank you for your participation in today's conference. This concludes your presentation, and you may now disconnect.