Jeff Palmer – Vice President of Investor Relations Dr. Sehat Sutardja – Chairman, President, Chief Executive Officer Clyde Hosein – Chief Financial Officer, Interim COO

James Schneider – Goldman Sachs Allan Mishon – Brigantine Advisors Sukhi Nagesh – Deutsche Bank Craig Berger – FBR Capital Markets [Glenn Young – Citi] [Sumit Danda – Bank of America/Merrill Lynch] Uche Orji - UBS Adam Benjamin – Jefferies & Co. Nick Aberle – Caris & Co. Quinn Bolton – Needham & Company

Welcome to the Q3 2010 Marvell Technology Group Limited earnings conference call. (Operator Instructions) I would now like to turn the call over to our host for today, Mr. Jeff Palmer, Vice President of Investor Relations.

Good afternoon everyone. Welcome to the Marvell Technology Group’s physical third quarter 2010 earnings call. I’m Jeff Palmer; Marvell’s Vice President of Investor Relations and with me on the call today is Dr. Sehat Sutardja, Marvell’s Chairman, President and CEO and Mr. Clyde Hosein, Marvell’s CFO and Interim COO. All of us will be available during the Q&A portion of the call today. If you have not obtained a copy of our current press release, it can be found at our company website under the Investor Relations section at www.marvell.com. Additionally, this call is being recorded and will be available for replay from our corporate website. Please be reminded that this call will include forward-looking statements that involve risks and uncertainties that could cause Marvell’s results to differ materially from management’s current expectations including our expectations about product sales and general market trends, expectations regarding new products, statements regarding our financial projections for the fourth fiscal quarter of 2010, our expectations regarding the current economic environment and impacts to industry demand. To fully understand the risks and uncertainties that may cause results to differ from our outlook, please refer to Marvell’s latest annual report on Form 10-K and subsequent SEC filings for a detailed description of our business and associated risks. Please be reminded that Marvell undertakes no obligation to revise or update publicly any forward-looking statements. During our call today, we will make reference to certain non-GAAP financial measures which excludes stock based compensation expense as well as charges related to acquisitions, restructuring, gains and other charges that are driven primarily by discrete events that management does not consider to be directly related to Marvell’s core operating performance. Pursuant to Regulation G, Marvell has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures in our third fiscal quarter 2010 earnings press release which has been furnished to the SEC on Form 8-K and is available on Marvell’s web site in the Investor Relations section at marvell.com. I would now like to turn the call over to Dr. Sutardja. Dr. Sehat Sutardja: Good afternoon everyone. Today we reported fiscal third quarter 2010 revenues of approximately $803 million reflecting a 25% sequential increase and a slight increase over the same period a year ago. The last year has been a tough one for everyone. However, Marvell has emerged out of this in very good shape. Our gross margin during the last quarter was more than 57%, over five points of improvement from a year ago and amongst the highest in our history. We also generated almost $200 million in free cash flow for the quarter. This result reflects the fiscal discipline we have implemented in the company navigating through one of the toughest economic downturns of our time. I’m proud of our employees for these accomplishments. We are very pleased with the revenue growth we experienced in the third quarter as order momentum improved across all of our addressable end markets throughout the quarter. The revenue growth reflects both an improvement in the overall end markets as well as the ramp of our new products. During the third quarter the sale of new products was approximately $80 million or about 10% of our total revenue for the quarter. This was better than 100% improvement on a sequential basis, a testament to the customer acceptance of our new product introductions. To remind investors, we are defining new products as complete utilization launched during the last six months. Looking out into our fourth quarter, we anticipate this trend will continue as new product continues to represent just over 10% of our total revenue. I would now like to revue the performance achieved in our various addressable end markets. The sale of products into the mobile and wireless end market was up over 40% sequentially and contributed approximately 20% of our total revenue. About two-thirds of the sequential growth in our mobile and wireless business was due to the strength in the market with the remaining due to continuing strength in the embedded Wi-Fi market. The third quarter was clearly a very good period for our mobile and wireless business as we continue to experience positive returns on our long term investments in this area. Additionally, beyond our strong results, we are have made several key announcements during the quarter. As an example, during the third fiscal quarter, we announced our ARMADA family of high performance, low power, embedded application processors. We have designed the ARMADA processor family to offer the best combination of price, performance and features across all end device markets. The ARMADA product line addresses a wide range of customer requirements from cost center consumer products, smart books requiring PC level performance, high end smart phones and connected full HD consumer video devices. All the products are based on Marvell’s custom CPU course which leverages the broad software ecosystem. Early customer acceptance and interest in the ARMADA platform is based on across multiple end markets with more than 50 product design awards so far. While we are in the early stages of customer engagements with ARMADA, we believe the early success will translate into meaningful revenue sometime over the next year and beyond. Within our communication process portfolio, several notable events occurred during the quarter with both new and existing customers. During the quarter, China Mobile, the world’s largest mobile phone carrier, launched its O-Phone/smart phone platform running the android base OMS operating system. Marvell is pleased to have been selected as first among a small group of strategic suppliers for the launch of multiple O-Phone/smart phones from a variety of leading hand set OEM’s. The scope of this announcement is very broad. We have approximately hand set manufacturers currently building O-Phone products based on Marvell technology. Over the next several months, we anticipate additional tier one hand set OEM’s will announce O-Phone offerings as well, many based on Marvell solutions. We have been working with China Mobile for more than two years and are very proud of the outcome of this project. Additionally, as part of the O-Phone effort, we recently announced the PXA920, the industry’s first single chip communication processor which supports both the China 3G PVSDMA and cellular protocol standards. We believe the PXA920 has set a new standard for performance and integration, enabling future O-Phones and smart phones to be developed at close to feature phone price points. We envision the PXA920 as enabling a whole spectrum of new products. Furthermore, we have been intimately involved in modem qualification process on the China Mobile network throughout China as the O-Phone platform will leverage our intimately developed protocol spec, a clear milestone and validation of the maturity of our cellular software. We look forward to a long and successful relationship with China Mobile and all the O-Phone partners around the world. Also during the third quarter, our long time customer, Research In Motion announced its next generation Bolt 9700 3G Smart Phone. This platform is based on our latest 3G URPS communication processor. The reviews and early market acceptance of the product have been very positive and was one of the contributing factors to the solid sequential growth we experienced in the mobile and wireless segment during the third quarter. During the quarter, we again experienced over 100% growth in the demand of our 11N Wi-Fi devices in the printer and enterprise end markets. Additionally, we experienced over 50% sequential growth for our new Wi-Fi Blue Tooth combo devices. Early feedback from our customers on our expanded portfolio of multi media combo devices is very position and we would expect to see positive revenue production starting sometime next year. Looking to the fourth quarter, we expect continued strength from the sale of applications and communication processors offset by normal seasonal sales associated with the sale of our consumer grade Wi-Fi products. Taken together, we anticipate revenue from the mobile and wireless market to decline in a range of mid to high single digits due to typical seasonal ordering patterns while we anticipate new design wins will continue to accelerate. Moving on to our efforts within the networking end market, sales increased by greater than 25% sequentially and represented approximately 20% of total sales. This is a reflection of both a rebound in the networking equipment market as well as continued momentum associated with Marvell’s specific share gains across multiple customers. We experienced the strongest growth within the enterprise portion of our business as sales of enterprise gigabit and 10 gigabit switches contributed the majority of the growth on a sequential basis. As we progress into the fourth quarter, we believe Marvell’s specific share gains in the networking area will continue. We see our continued success in the enterprise area as being the primary driver of revenue growth in the networking area in the fourth quarter. Furthermore, we do anticipate modest improvement in our client mix and five businesses. Taken together, we believe revenue from our networking business will accelerate in the fourth quarter in a range of mid to high single digits on a percentage basis. Lastly, the sale of products into the storage end market grew by nearly 20% on a sequential basis and contributed to just over half of our total revenues. We believe our share of the SOC market expanded to approximately 60% on a unit basis during the third calendar quarter. We experienced very strong demand across all drive types, but especially within the 2.5 inch drive market. Within the 2.5 inch drive market, we estimate that nearly 60% of all mobile drives shipped during the third calendar quarter leveraged Marvell’s SOC technology. Within the enterprise drive market, we experienced solid improvement, sequentially both on a unit and a revenue basis as previous ramps of enterprise SOC began to have a positive impact on our growth. And lastly, within the 3.5 inch drive market, we believe our unit share was nearly 50% as our customers continue to gain incremental share. These are clear examples of how Marvell Technology helps our customers to be successful. Looking forward, we anticipate the sale of products to our storage customers should improve sequentially by mid single digits on a percentage basis during our fourth fiscal quarter. This is in line with the projected growth rate of the overall hard disk drive industry. In summary, we are encouraged by the return of growth rates more in keeping with our historical levels. As has been the case throughout our history, we have always been a company focused on raising the technology bar in our target markets. By doing so, we aim to lower the barriers and cost to entry to the next billion consumers eagerly waiting to join and connect the modern knowledge based global economy. We will continue our laser focus on delivering innovative products which will enable our customers to succeed and gain share in these growing global markets. Now I would like to turn the call over to Clyde to review our financial results for the next quarter and to provide our current outlook.

Good afternoon everyone. As Sehat mentioned, fiscal Q3 revenues came in at approximately $803 million representing a 25% sequential increase over Q2 2010 and an increase of about 2% from the same period a year ago. As Sehat mentioned, our overall revenue performance was better than we had anticipated in our initial guidance as well as we had updated on our guidance on October 26. Our non-GAAP gross margin for the third quarter was 57.8%, an increase of 244 basis points from the second quarter and up 46 basis points from the same period a year ago. This was higher than the mid point of our earlier projected range of 54% to 55.5%. The sequential improvement in our gross margin is a reflection of improved product mix, additional cost reductions we implemented during the quarter, combined with ongoing improvements in operational execution. Our overall operating expenses for the third quarter on a non-GAAP basis were $231 million which was in line with our earlier projected range of $225 million to $235 million. R&D expenses for the third quarter were $187 million, an increase of about 9% on a sequential basis and a reduction of 8% from the same period a year ago. On a sequential basis, R&D increased due to lower customer funded R&D projects which are typically lumpy and lower vacation usage during the quarter. As compared to a year ago period, the 8% decline was due to lower head count, and related expenses. SG&A expenses for the third quarter were approximately $34 million down nearly 22% sequentially and a decrease of about 31% year on year. SG&A expense during Q3 were lower than anticipated primarily due to unforecasted insurance reimbursements and lower than forecasted legal expenses. On a year over year basis, SG&A was down due to the combination of lower head count, reduced legal expenses, low consultant expenses and lower sales commissions. This resulted in non-GAAP operating margin of approximately 29%, up over nine points from approximately 20% operating margin reported in the prior quarter and an improvement of better than 10 points from the same period a year ago. Net interest expenses and other income was an expense of approximately $4 million, slightly higher than our expectations primarily due to currency impacts and foreign denominated tax reserves. On a non-GAAP basis we realized a tax benefit of approximately $350,000 during the third quarter. During the quarter we had approximately $33 million in tax benefits which are not included in our non-GAAP presentation. These related to Statue of Limitations on a tax contingency reserve and an adjustment of a prior year deferred tax asset. We did not reflect the benefit of these tax items in our non-GAAP results as we view these items as non recurring primarily related to items we typically exclude from our non-GAAP results. Our non-GAAP net income for this fiscal third quarter was approximately $232 million or $0.35 per diluted share, an improvement of almost 100% versus our net income of $119 million or $0.18 per share we delivered in the prior quarter. During the same period a year ago, we earned $145 million or $0.23 per share. The shares used to compute non-GAAP net income per share during the third quarter were approximately 664 million, up from 652 million shares in the prior quarter and higher than the 633 million shares reported in the year ago period. Changes in diluted share count are primarily due to shares issued in the periods along with variations in average and ended share trading prices in the reported periods which impact the Treasury method of computing diluted share count. Let me summarize our quarter results on a GAAP basis. We generated a GAAP net profit of approximately $202 million or $0.31 per share in the third quarter as compared to the $0.09 per share we experienced we reported in our second quarter of fiscal 2010 and higher than the $0.11 per share we reported in the same period a year ago. The sequential improvement in our GAAP earnings was a result of higher revenues, improved gross margins, continued operating expense control and non recurring tax benefits. The difference between GAAP and non-GAAP results during the third quarter of fiscal 2010 was due to stock based compensation expenses of approximately $34 million or $0.05 per share. Amortization of intangibles represented $26 million or $0.04 per share and one time tax benefits of approximately $33 million or $0.05 per share. Now I’d like to review our balance sheet as of the end of the fiscal third quarter. Cash, cash equivalents and short term investments were $1.46 billion, up approximately $185 million sequentially and up $420 million from the same period a year ago. Cash from operations for the third quarter was approximately $204 million as compared to $182 million reported in the second quarter and down from the $258 million reported in the same period a year ago. Free cash flow from our fiscal third quarter defined as cash from operations less CapEx and purchases of IT licenses, was approximately $196 million, representing a 24% free cash flow margin, a 12% sequential improvement from the $175 million in the second quarter of fiscal 2010 and a 20% decline from the $244 million in free cash flow reported in the year ago period. Accounts receivable was $394 million, up about $66 million sequentially, reflecting the higher revenue levels and essentially flat as compared to the same period a year ago. DSO was 41 days, down about three days sequentially and down nine days from the same period a year ago. Net inventories at the end of the third quarter were $239 million, up from the $211 million reported in the second quarter, 13% sequential increase as we managed to improve areas where we experienced tight supply. Net inventories declined $100 million or 30% on a year on year basis. Days of inventory was 60 days, down six days sequentially from the 66 days reported in the previous quarter and down 20 days from the year ago period. Accounts payable was $317 million, up $49 million sequentially due to increased unit volumes in the quarter and up $93 million on a year over year basis. Now I’d like to provide an update on our current projections for the fourth fiscal quarter of 2010. We currently project fourth quarter revenues in the range of $820 million to $850 million for a sequential increase of 2% to 6%. We currently anticipate revenue from our network and storage addressable end markets to grow sequentially while we anticipate a modest but normal slow down in our mobile and wireless end markets primarily due to seasonally lower sales of our embedded Wi-Fi products into the gaming market. We currently project non-GAAP gross margin in the range of 58.5% plus or minus 50 basis points, approximately 70 basis points of improvement versus the previous quarter. We currently anticipate non-GAAP operating expenses to be approximately $235 million plus or minus $5 million. We anticipate R&D expenses to be approximately $185 million and SG&A expenses of approximately $50 million. At the mid point of our range, this should translate to an operating profit of approximately $254 million or about 30% of our operating margin. This is a 9% increase in operating profit on a sequential basis, greater than twice our revenue growth rate and a clear testament on the operating leverage Marvell is structured to deliver. The combination of interest expense and other income together, should net out to about $1.5 million. Non-GAAP tax expense should be approximately $12 million or a tax rate of about 5%. We currently believe that diluted share count will be approximately 670 million. Taken together, we currently project non-GAAP EPS to be in the range of $0.33 to $0.39 in count share at the mid point of our guidance. This represents about $0.36 per share representing a sequential increase of about $0.03 operationally offset by about $0.02 of increased taxes. This EPS level is the highest quarterly earnings per share in Marvell’s history. On the balance sheet, we currently expect to generate about $150 million in free cash flow during the quarter. We anticipate our cash balance to be about $1.6 billion excluding any special items or M&A activity. We currently expect our GAAP EPS to be lower than our non-GAAP EPS by about $0.09 per share plus or minus a penny. About $0.04 of this difference is related to amortization of intangibles and $0.05 in stock based compensation expense. Now I’d like to turn the call over to the operator to begin the Q&A portion of the call.

(Operator Instructions) Your first question comes from James Schneider – Goldman Sachs. James Schneider – Goldman Sachs: Congratulations on the strong results. Maybe we can start on the hard drive market for a moment. I think there’s been a lot of speculation about what the true dynamics of that market are, but there’s also been a lot of talk about potentially better seasonality heading into the first quarter of 2010. Can you tell us from what you hear from your customers what you expect in terms of seasonality going into the first quarter? Dr. Sehat Sutardja: I think the continued lower cost of PC’s, laptops and net books over the last several quarters really has been very good for the drive industries especially the 2.5 inch end markets. I think this is really driven by the elasticity of the end market and of course the new applications that emerged such as gaming and PDR’s for the drives. So overall I think the industries are very optimistic. That’s the way we look at it.

Your next question comes from Allan Mishon – Brigantine Advisors. Allan Mishon – Brigantine Advisors: As I look at the gross margin improvement that you experienced during Q3 and then I look at what happened to your mix, I actually would have thought that would have penalized your gross margin. Can you just walk us through exactly what kind of mix improvements you saw? Dr. Sehat Sutardja: Unfortunately we don’t provide gross margin by end market segment but I think there might be some misperceptions about our mobile and wireless end markets and the margins related to that. That experienced very good growth and that’s probably where the models might be off. But this is continued execution by the Marvell management team. They’ve done an excellent job at managing. We design for cost and design for gross margin so it’s very broad and I think very good execution for us.

Your next question comes from Sukhi Nagesh – Deutsche Bank. Sukhi Nagesh – Deutsche Bank: A couple of questions I had on the comp processor side. You talked about China Mobile in particular. China was talking about $30 million unit count over three years. Is that the market that your comp processor will be focused on and can you talk about what your share will be over the next few years in that market? Dr. Sehat Sutardja: I assume you are referring to the PXA920 device which was introduced last quarter. This device is a very specific high volume, high performance communication processor that serves the PDS CDMA specific China standards plus the back up capability with their existing networks. So from the performance point of view, this is truly a state of the art smart phone solutions. From the cost point of view, it will address the high volume market. So the way we look at it, while initially this is going to be addressed for the higher end smart phones, but very quickly over the next year or so this device will also be used in mainstream high volume feature phone replacement. So our aspiration is significantly higher than any number that anybody will throw in, but this is our expectation. So we expect basically the next several years to continue to ramp on this product as well as our future derivative of this product.

Your next question comes from Craig Berger – FBR Capital Markets. Craig Berger – FBR Capital Markets: I guess I want to understand what you view as the sustainability of these gross margins. We’ve seen obviously a huge ramp in two quarters and I know investors wonder about the sustainability. Dr. Sehat Sutardja: In my opinion the gross margins in the semi conductor business should be on the high end as the price of the semi conductor devices gets lower to offset the increased cost of R&D spending, the offset of increased litigations, the offset of increased cost of sales and marketing expenses. So this is a fundamental shift that you will see over the next several years for any company to be perceived to be doing well in this business. So the kind of numbers that we have I think is a fair number and our plan is to maintain around that number for as long as we could and I think this is what any best in class semi conductor companies will have to achieve as well.

I’d just add one piece to it. The cost of bringing out new products is increasing and what Sehat described as the entry gets raised and our ability to design in those geometries gets us best in class and the margins reflect that. Craig Berger – FBR Capital Markets: The follow up is on storage where guidance basically gets you above prior peak shipment levels. I know I’m going to get asked this from investors. Do you think your customers are building inventory down stream? Do you think you’re shipping over PC drive consumption rates and do you have any thoughts about paying a dividend? You’re generating a lot of cash.

Particularly in this business you have a storage business. We are on a consignment basis, so customers pull when they need. That implies a couple of things. One is they don’t need to build inventory, certainly not of our chips, so that’s part one. Part two is as Sehat mentioned, I think it’s a transformation where I think that we mentioned to investors that the price of PC’s for future PC’s, laptops are now sub $500 levels and that’s creating demand particularly in the countries that people might not anticipate. So short answer to the inventory question is whilst we are not experts in the channel, it doesn’t appear to us that there are inventory buildups. As to the second point, I think that’s a consideration, dividends for a future period of time. I think right now, I think all of us would agree we are not out of the economic downturn. Yes, Marvell’s financials are very good and excellent, but that reflects our engineering and our operational excellence and our team success. So I think it’s too soon right now to be talking about distribution of cash. A fair question, but I don’t think we are out of the woods economically to be discussing those things yet. Dr. Sehat Sutardja: I just want to add a little bit on that second part. My opinion is whenever we needed money; the banks will not be on our side. So the banks will never be our friend when we need money. When we have plenty of money, we have lots of friends. So my bias is we need to build the cash to weather any possible activity in the future. I’m talking about the company. I’m talking about the economy.

Your next question comes from [Glenn Young – Citi] [Glenn Young – Citi]: My first question is with respect to the business in China, the TDS business in China. If you look out over the course of the next four quarters, is there a point in time where you expect there to be an upwards inflection in that business. My second question really pertains to a big picture sense. When you think about your reported quarter, when you think about your guidance for the out quarter and kind of assess your level of visibility today versus where it was a quarter ago and versus where it is normally, can you give us a sense as to what kind of visibility you have? Dr. Sehat Sutardja: On the first part, on the TDS we are really, really optimistic. We are really glad that we’ve been working with China Mobile for two years, more than two years. It has been an extensive engagement with China Mobile in qualifying our product prospects in the network. TD-SCDMA is the crown jewel of China 3G, so this is the pride of China technology. We have a strong belief that TD-SCDMA will be a dominant solution in China moving forward. So right now all of our partners are working day and night to various importance utilizing this technology. So we hope to see second half next year will be a very good ramp for this product, the single chip, highly integrated TD-SCDMA smart phone technology that we just introduced last quarter.

As to the second part of the question, the visibility, I think compared to six month ago, better; compared to nine months ago obviously much better. So I think part of it is inventory and I think it’s probably leaner than probably back then. We talked about PC demand. I think most people don’t see the demand coming from lower priced PC’s. And then from time to time, we’ve had shortages so people tend to now given longer lead times, foundries as I’m sure you know and have written about, the foundries have tightened up supply. So we tend to get longer lead times and a lot of visibility today than we did six or nine months ago.

Your next question comes from [Sumit Danda – Bank of America/Merrill Lynch] [Sumit Danda – Bank of America/Merrill Lynch]: You and Sehat mentioned that the 58.5% gross margin level is sort of sustainable. That seems to be a little bit at odds with what you said on the last call where you said you thought the mid 50’s was the more sustainable model. Could you just clarify what the expectation is on a sustained basis going forward?

I was trying to avoid giving a new update on our model. We’ve been thoughtful giving updated models at the end of our fiscal year which is our next earnings call and I’d like to defer to that. We’ve seen improvement. That’s part of it as I described before, continued improvements. A fair point that we did not forecast to you those improvements but sometimes those improvements may not be at the beginning of the quarter. The second thing is our revenues improved by about $100 million since our last forecast, allowing us to flush out old inventory at higher cost and that should be lower inventory cost. So all those things combined would show the sequential improvement. A fair point on giving better visibility, but I’ll defer the model and we’ll give you a formal update on our model at our next call. [Sumit Danda – Bank of America/Merrill Lynch]: On the O-Phone the test that you talked about, can you clarify whether you have any exclusive and what kind of share you anticipate given that you’re getting a little bit better visibility to talk about half a dozen OEM’s starting to design in your silicon. And along those same lines, I’m assuming that even if that grows to be a big business sometime in the future, you’ll be able to target the margins in line with your corporate model there? Dr. Sehat Sutardja: The PXA920 is our first highly integrated PDS CME plus high performance application processor, traffic engines and so on. So this is a very high end device that we combined with China Mobile. But China Mobile does not build for it so they work with their partners and our partners to build phones that they will sell. So this not specific to any customer. This is a device that will be used by dozens of cell phone manufacturers to build their own version of phones. And a lot of these phones will be O-Phones but some of these phones will not be O-Phones, but they will have PDS CME. They will have the same chip. In fact we forgot to mention actually that it’s not just the chip. It also comes with its companion. It comes with our own RS technology. It comes with our Wi-Fi, Blue Tooth, FM radio technology. It will come with our PMIC, our management technology, battery charger technology. So a lot of these things actually comes starting from this point. It comes with our chip set solutions. So this is actually very exciting for us because we’ve been looking at a lot of areas. We’re working on PMIC for many years to address this market. So it just happened that every thing lines up. Now we can start shipping these products and then moving forward, more and more of our products will have this chip set solutions available.

We don’t disclose. We should be fine. We’re comfortable.

Your next question comes from Uche Orji – UBS. Uche Orji – UBS: When you were talking about R&D and some customer funded R&D and the lumpy nature of that, can you please just explain what that means?

From time to time in our non recurring expenses that are sometimes funded by customers, particularly in some areas of our business. That tends to fluctuate quarter over quarter somewhat lumpy. We had more credits in the Q2 period than the Q3 period. And the other part of it is we had a shut down scheduled in July, for fourth of July and some other countries this quarter. This quarter obviously we didn’t have that scheduled. I think we were fairly busy enough this quarter. So the net results is we used up less of the vacation accrual resulting in that. There’s no structural change in R&D. We still intend to manage tight expenses as you can see from our forecast for the Q4. You can also assume that most of our R&D’s are using advanced technologies. A significant cost of our R&D is also because of that cost. Uche Orji – UBS: In terms of the new revenues, new product revenues now 10% of your revenues which are new products, what is the implied incremental gross margins on the new products and how much of those new product is China Mobile offering?

As Sehat mentioned earlier, 10% of our stuff in Q3, none of that is phones yet. We start to ramp in the second half of next year and we don’t disclose by product segment for competitive reasons our gross margins in any given period. Uche Orji – UBS: The way the gross margins from the comments you made, it looks like it’s coming in at a higher, or average gross margin. Is that how we should think about it?

We’re very comfortable with the gross margin of our product line and we’ll provide further business model updates to you next quarter.

Your next question comes from Adam Benjamin – Jefferies & Co. Adam Benjamin – Jefferies & Co.: Just a follow up on the commentary on the Blue Tooth/Wi-Fi combo part that was up 50% in the quarter, you have one tier one gaming win there. I’m just curious outside of that gaming win were there any other tier one’s either in the handset space or gaming market that are contributing to that growth? Dr. Sehat Sutardja: It’s a little early to talk about all the specific market segments that we’re targeting but we are very happy. Actually we are really happy with our actions in the combo device. It’s finally taking off. Remember, we invested in Blue Tooth about a couple of years ago so now we have our first generation device, the one that’s ramping now. We have a second generation device that’s in the pipeline and we’ll have the generation device next year. So the beauty is, we have all the software, we have all the qualification done. So the rest is just putting the different combinations for different market segments. So which target markets? We’ll say anything embedded that required Blue Tooth and Wi-Fi is a fair target market. Adam Benjamin – Jefferies & Co.: Just to follow up on the gross margin, I know it’s been asked a couple of different ways. But if you think about the gross margin going forward from these levels, clearly you got a benefit of some older higher prices inventory rolling off and then you have potentially mix and then some cost efficiencies that you may have locked down during the downturn. If you think about those three dynamics going forward, if you can maybe break it out in percentages how you should be thinking about it that can contribute to either this level sustained or even higher that would be helpful. Clearly maybe quantifying where you are in terms of rolling off the higher priced inventory first, that would be great. Dr. Sehat Sutardja: Let me give you a hint of why these things are happening. In our business, in the semi conductor business there are several things that happen; high integration, a high integration using more advanced technology will allow our customers to reduce costs. Our customers will have fewer chips on the board. They have lower power. They have fewer layered PC boards, less time to assemble the products, shorter time to test the products, more reliability, reduced overall poor performance and lower costs. So while we continue to increase the integrations, we actually give our customers lower overall costs as a result. So what happens is, the customer is seeing benefits from this high integration level. At the same time we’re also getting incremental benefits in the gross margin. So this is what’s happening. It’s my opinion. This is what we are seeing and I think for as long as we continue to do high integration or higher integration and using more advanced technology, this trend will continue or at least sustainable.

You’re absolutely right. There’s obviously some improvement we forecasted and some other points in the January quarter, so there’s obviously some improvement to be had. I think you know us by know. We always drive to improve better. I just want to go back to what Sehat said so you understand this. This model has been a great engineering. This has been a benefit of giving customers better products and billing them very efficiently. There are a number of great initiatives doing that. That’s the effect of it. Hopefully that keeps going, but right now we forecast one quarter out and give you another 70 basis points. We’ll update that in three months.

Your next question comes from Nick Aberle – Caris & Co. Nick Aberle – Caris & Co.: Just another question on the wireless business. Since you purchased the Intel wireless assets back in 2006 we’ve been waiting for you to layer on another top tier wireless customer in addition to the legacy account. It looks like the China Mobile relationship is going to help you break into the top tier. Do you expect that foot in the door at China Mobile to allow you to extend the relationships to top tier guys to non China GSM opportunities? Dr. Sehat Sutardja: Yes. The key is technology. We need to prove the technology is superior. We have to make the chips to be small die size, low cost, low power, long battery life, so people can use cheaper batteries, cleaner phones, cleaner phones meaning cheaper and sexier. Software, specs, inter operability in any given network anywhere in the world whether it’s China, U.S. or Europe. So we have gone through this exercise. So once we have all those things I think the rest is just business transactions, timing when any first tier are willing to ramp up to introduce new products. That’s nothing new in this business versus any other business. So people they may delay introductions. They may be on the next generation version. So as long as we continue to build better products over the next year or two, we will continue to gain. So it’s as simple as that. Nick Aberle – Caris & Co: On ARMADA, it sounds like its been getting some pretty good reviews on the trade rags. You talked about 50 wins. What end markets do you think you’re going to see acceptance with initially and then in your opinion what’s the biggest end market possibility over the next two to three years for that product line? Dr. Sehat Sutardja: It’s across the board. We look at the ARMADA family of devices, if you look at our announcement, we have a number of devices from the low end, lower cost to the super high end with dual channel HD H264 CD1 high profile HD TV decoder. And all of these devices come with powerful custom processor that we built internally that’s unique to Marvell. But they run on standard sets so they run all the software in the market. So some devices have single processors. Some devices have dual processors, dual core processor that we built. So the market is any consumer devices from connective HD TV decoders, Blue Ray player, to high performance digital picture frames where you can show pictures as well as the gateway portal to the internet. So smart books, net books, 10 clients. In fact we have several big clients with devices already on the market. So it’s pretty much across the board. You can put it in the automotive consoles. You can put a digital cockpits. Anything for a display is a fair target of this device. The question is what type of display and what price points, and then you pick the right device for that market. And the beauty is we now have complete segments, targeted complete segments for all those markets.

Your next question comes from Quinn Bolton – Needham & Company. Quinn Bolton – Needham & Company: I wanted to come back to the drive side of things. The number of drive manufacturers over the past quarter talked about component shortages includes silicon. I’m just wondering if you could talk to your ability to supply. Have you seen any tightness in the foundries or have you seen your lead times stretching out on the drive side? Dr. Sehat Sutardja: Obviously people did not forecast the early stage, the size of the upturn. But the beauty is, our customers, we did not shortchange our customers, even during the test time. This is a testament to Marvell’s solutions, capability as well as our operational capability. So we can overnight improve the production lines to capture those unforecasted demands. So as a result, we actually have happy customers and this is again the reason why over the last, technology superiority, we’ve been talking about our storage. We have the lowest power chip in the world in storage. We have the highest performance. We have the highest yield. We allow our customers to build drives with the highest yield, meaning lower cost to themselves. This is one of the reasons that we continue to gain market share in this business. Quinn Bolton – Needham & Company: I know you have already talked about some pretty impressive market share numbers both in mobile and desktop, I’m just wondering if there’s been any update on the timing on the HGST and the Seagate ramps for mobile and desktop. Dr. Sehat Sutardja: No update at this time, but we are very happy. So moving along very well.

Thank you everyone. I think at this point we’re going to conclude. We appreciate your interest in Marvell. We look forward to seeing you at future investor conferences. We will be at the Needham Growth Conference in New York City on January 14. We look forward to seeing you then and at other investor events, and we thank you for your interest in Marvel. Thank you. Have a very good day everyone.