Sukhi Nagesh - Vice President of Investor Relations Sehat Sutardja - Co-Founder, Executive Chairman, Chief Executive Officer, President, Chief Executive Officer of Marvell Semiconductor Inc, President of Marvell Semiconductor Inc and Director of Marvell Semiconductor Inc Clyde R. Hosein - Chief Financial Officer, Principal Accounting Officer and Secretary

John W. Pitzer - Crédit Suisse AG, Research Division Harlan Sur - JP Morgan Chase & Co, Research Division Glen Yeung - Citigroup Inc, Research Division Ross Seymore - Deutsche Bank AG, Research Division Srini Pajjuri - Credit Agricole Securities (USA) Inc., Research Division James Schneider - Goldman Sachs Group Inc., Research Division Doug Freedman - RBC Capital Markets, LLC, Research Division Craig A. Ellis - Caris & Company, Inc., Research Division Mark Lipacis - Jefferies & Company, Inc., Research Division

Good day, ladies and gentlemen, and welcome to the First Quarter 2013 Marvell Technology Group Earnings Conference Call. My name is Larry, and I will be your operator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Sukhi Nagesh, Vice President of Investor Relations. Please proceed.

Thank you, Larry, and good afternoon, everyone. Welcome to Marvell Technology Group's First Quarter Fiscal 2013 Earnings Call. I'm Sukhi Nagesh, Vice President of Investor Relations and with me on the call today are Sehat Sutardja, Marvell CEO; and Clyde Hosein, Marvell CFO. We will all 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 marvell.com. I also want to highlight that starting this quarter, we will be posting a slide deck summarizing our quarterly results in the IR section of our website for investors. Additionally, this call is being recorded and will be available for replay from our website. Please be reminded that today's discussion will include forward-looking statements that involve risks and uncertainties that could cause our results to differ materially from management's current expectations. The risks and uncertainties include our expectations about sales of new and existing products, including statements about our TD, TD-LTE, FDD-LTE, PON, HDD and SSD products, statements about general trends in the end markets we serve and future growth opportunities, statements about the market share, impact of flooding in Thailand, statements regarding our financial predictions for the second quarter of fiscal 2013 and our expectations about long-term growth. To fully understand the risks and uncertainties that may cause results to differ from our expectations and outlook, please refer to today's earnings release, our latest annual report on Form 10-K and subsequent filings -- SEC filings for a detailed description of our business and associated risk. Please be reminded that all of our statements are made as of today, and 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 exclude the effect of stock-based compensation, amortization of acquired intangible assets, acquisition-related costs, restructuring costs and certain onetime expenses and benefits that are driven primarily by discreet events that management does not consider to be directly related to our core operating performance. Pursuant to Regulation G, we have provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures in our first fiscal quarter 2013 earnings press release, which has been furnished to the SEC on Form 8-K and is available on our website in the Investor Relations section. Now with that, I would like to turn the call over to Sehat.

Thanks, Sukhi, and good afternoon, everyone. Today, we reported first quarter revenues of approximately $796 million, reflecting a 7% sequential increase from the prior quarter and above the high end of our previously projected range. The reason for the better-than-expected revenue performance was 25% sequential growth in our TD-SCDMA revenues and increased deployment by all of the drive customers for our leading -- industry leading 500 gigabyte per platters mobile HDD products. This is in contrast to the overall revenues for our nearest competitor in the TD market, which declined double digits while our competitor in the storage space are not shipping similar 500-gigabyte technology. These areas are 2 small examples of the leadership that Marvell has and will continue to demonstrate. Building on the strength of our results, we are forecasting our second quarter revenue to increase in the range of 6% to 12% [indiscernible] sequentially. We expect our TD revenues to grow again by more than 20% and the 500-gigabyte revenues to grow about 50%. For the first quarter, we delivered the following non-GAAP results: Gross margin of 54.5%, which was in line with our expectations; operating margin of 17%; and earnings per share of $0.23, both of which were above our original guidance. As a result of the improvement we are seeing in our business recently and our strong product pipeline, we are more confident in our growth opportunities. This confidence is leading us to further increase shareholder returns and especially, given the recent performance of our stock, we are increasing our share repurchase program by $500 million to a cumulative total of $2.5 billion. In addition and largely in response to broad institutional shareholder requests, we are initiating a quarterly dividend of $0.06 per share. Now let me provide more color on our performance and expectations across our end markets. First, in our mobile and wireless end market, let me remind you that our initial guidance was for a sequential decline of high single digits. However, I'm glad to report that our Q1 revenues for our mobile and wireless end market was a step down just 1% sequentially and was up 14% from the same period a year ago. Typically, this is our weakest seasonal quarter in mobile and wireless, so the year-over-year performance, particularly in the current macro environment, illustrates our increased traction in this end market. Our mobile and wireless end market constituted 29% of our overall sales. In Q1 our mobile and -- while mobile or cellular revenues performed better than expected and grew about 50% from a year ago. At the beginning of the quarter, we expected our revenue from TD smartphones to be essentially flat. However, during the quarter, China Mobile announced their targets to grow TD smartphone units by over 2.5x year-over-year to 30 million units this year. Once this target was released, we saw a significant increase in demand for our solutions within the quarter resulting in some spot shortages. Our TD smartphone revenue increased 25% sequentially and significantly outpaced our nearest competitor whose revenue, as many of you know, declined double digits in the quarter, a clear indication that Marvell is taking share in the TD market. We expect our TD unit shipments in the first half of this year to account for about 40% of China Mobile's full year targeted volume, and we are well positioned to ship more as the year progresses. In fact, in the first quarter, the number of TD smartphone models in mass production with Marvell silicon increased over 30% and the number of new smartphones in development increased over 60% sequentially. We are now designing to over 70 different high-volume handsets, and this is not surprising as our industry-leading single-chip TD-SCDMA solutions have the most mature protocol stack and the highest throughput performance and continue to garner increased high-volume design wins from multiple OEMs. Our mobile business is now rapidly diversifying with no single customer, representing 10% of total sales. We are well ahead in the development and commercializations of the next-generation TD-SCDMA, TD-LTE and FDD-LTE solutions, which incorporate high levels of performance and integration that we believe will continue to drive the strong adoption of low-cost smartphones. As a result, we are on track to more than double our China TD smartphone business this year. In addition to the growth in our TD -- of our TD business, our Android base W-CDMA revenue was also better than previously anticipated. While this is relatively small today, we expect steady growth in our Android base W-CDMA revenue over the next few quarters. Also in Q1, our wireless connectivity business performed better than expected as new gaming product launches offset seasonal declines in other end markets such as wireless access points. Overall for fiscal Q2, we expect our mobile and wireless end market to increase sequentially in the mid to high single-digit range, we expect our TD smartphone shipments to grow over 20% sequentially on top of the 25% increase in Q1, and thereby further extending our competitive lead. This implies that in Q2, we expect to ship over 5x the units of our nearest competitor, assuming they achieve their stated expectations. We also expect positive seasonality in our connectivity business to contribute to our growth in Q2. Now turning to our networking end market. Q1 revenue declined about 1% sequentially versus our earlier expectations of flat sequentially. This compares to the market, which declined about 5% sequentially. Our networking business outperformed the market due to growth in our new products, including PON, 10-gig switching, network processing and PLC, which collectively grew over 20% sequentially. Within our new products targeting the networking end market, our leading PON products continued to do very well growing double digits in Q1 and are expected to grow again by at least 25% in Q2. Let me remind you, our PON products have first revenues just a year ago, yet we now have over 25% market share. In addition, our Xelerated network processors are already getting significant tractions with tier-1 customers. We are seeing strong design wins and demand from multiple customers for their advanced network processing and programmable Ethernet switching solutions. For example, we recently won major mobile backhaul designs for both Xelerated and our switching products at tier-1 European and Asian OEMs. We believe we have now won about 50% of the designs for the next-generation mobile microwave backhaul with our highly advanced solutions. Overall, our networking business continues to perform well, and we expect this to translate to above market growth for Marvell this year. The networking end market represented about 22% of our total revenue in Q1. For Q2, we expect our overall networking end market to grow in the mid-single digits sequentially, driven by broad-based demand increase especially in areas such as Ethernet files and continued growth in areas such as PON and advanced network processing. Now finally moving to our storage end markets. Q1 revenues increased by approximately 20% sequentially. This was at the high end of our earlier projected range. Storage represented about 45% of the total revenues in the quarter. In Q1, our HDD unit volumes increased consistent with the recovery from the effects of the flood. And we now believe that by the end of the quarter -- by the end of this quarter, the flood-related impact will be behind us. More importantly, there was a significant increase in demand for our 500 gigabyte per platter mobile drives, which grew 2.5x in Q1, and that represented over 25% of our unit shipments. By the way, we are now shipping these 500-gigabyte products to every HDD customer with little competition. As the market settles down from the supply discontinuities of the flood, we believe that typical industry behavior will prevail. This means the market will transition to higher capacity drives, such as those with our 500-gigabyte technology and away from older technology, which is, again, a competitive advantage for us and for our customers. We are already seeing this trend as we expect volumes from our 500 gigabyte per platter products to increase by over 50% this quarter and should represent over 35% of our units shipped. In addition and in response to increased adoption of thin or Ultrabooks, we expect to see demand for 7-millimeter form factor drives to increase later this year at lower cost alternative to solid-state drive base Ultrabooks. Such small [ph] form factor drives can only afford a single platter, and therefore need to have the highest possible capacity per platter. Marvell is the only solution provider today, combining both 7-millimeter form factor and the highest capacity point of 500 gigabytes. Let me now address the enterprise HDD space. Revenues increased by about 20% from existing customers, and I'm now proud to report that we began to ramp in 2 new next-generation enterprise designs. One of these designs is at the biggest enterprise HDD supplier. We expect the ramp in the enterprise HDD to continue for the remainder of the year. I recognize our HDD competitor has been vocal about their positions and their expectations of share gains in the drive market. However, let me remind you that they were saying this when our customer were being impacted by the floods, and obviously this is currently no longer true as the industry returns to normalcy. While they may choose to do their marketing on Wall Street, we choose to focus our marketing in the labs and factories of our customers, and we will let our results speak for themselves. Storage has always been our strength and we fully intend to extend our leaderships in all areas of our server [ph] storage silicon market. In fact, on the strength of our position in mobile drives and our increasing share in the enterprise, we expect our unit share of the HDD market to increase to well over 60% in Q2. Now moving to our SSD business, revenues from our SSD controllers was in line with our expectations and softer at the end of prior quarter. As most of you know, many of our leading customers indicated softer SSD sales recently and they attributed it to mainly to a return to normalcy from the temporary shortages in the HDD market. Nevertheless, our SSD design win momentum remains strong, and we expect multiple devices, including Ultrabooks and hybrid drives -- hybrid devices to come to market with our SSD controller technology, and we remain on track to deliver excellent growth this year. In this nascent SSD market, we believe we already have over 50% of the merchant silicon controller share today and our design traction leads us to believe that we will increase this as the market develops. For fiscal Q2, we anticipate our overall storage end market to grow in the range of 10% to 15% sequentially. In summary, Q1 was a solid quarter for us as we deliver better than anticipated revenue and profits; we repurchased approximately 15 million shares in the quarter and further highlighting our commitment to shareholders, we are ramping up our share repurchase program and initiating a quarterly dividend. Marvell is a financially strong and diversified company, and we continue to work hard to provide the best-in-class solutions to all of our customers across all our end markets. We remain confident that our business model will continue to benefit our customers, our employees and our shareholders. Now, I would like to turn the call back -- turn the call over to Clyde to review our financial results for the first quarter and provide our current outlook for the second quarter of fiscal 2013. Clyde? Clyde R. Hosein: Thank you, Sehat, and good afternoon, everyone. As Sehat mentioned, we reported revenues for the first quarter of fiscal 2013 of $796 million, which was approximately $31 million above the midpoint of our guidance and a 7% sequential increase and down about 1% in the same period for the year ago. Our non-GAAP gross margin for the quarter was 54.5%, in line with our earlier projected range. Our overall operating expenses for the first quarter on a non-GAAP basis were $296 million, with R&D expenses for the quarter of $238 million and SG&A expenses of $58 million. This resulted in non-GAAP operating margin of 17.3% for the quarter, which was slightly above the high end of our expectations. Net interest expense and other income was about $1 million and our tax expense for the quarter was approximately $400,000. As a result, our non-GAAP net income for the fiscal first quarter was $139 million or $0.23 per diluted share and above the high end of our guidance. The shares used to compute diluted non-GAAP EPS during the first quarter was $606 million. Cash flow from operations for the first quarter was $199 million as compared to $69 million reported in the previous quarter. Free cash flow for the first quarter was $178 million compared to $38 million reported in the prior quarter. The increase in free cash flow was a result of higher revenues and improved working capital. Let me now summarize our quarterly results on a GAAP basis. We generated GAAP net income of $95 million or $0.16 per diluted share in the first quarter of fiscal 2013, an increase from the $81 million or $0.13 per diluted share in the prior quarter and $147 million or $0.22 per share we reported in the same period a year ago. The difference between our GAAP and non-GAAP results during the first quarter of fiscal 2013 was mainly due to stock-based compensation expenses of $27 million or about $0.04 per share and about $17 million or $0.03 per share related to the amortization of intangible assets, acquisition-related and restructuring expenses. Now I would like to review our balance sheet as of the end of fiscal Q1. Cash, cash equivalents and short-term investments were $2.2 billion, a decrease of $44 million sequentially. During the first quarter, we repurchased about 15 million shares for approximately $223 million. Over the past 7 quarters, we have repurchased and retired 107 million shares or about 16% of our outstanding shares. Accounts receivables was $417 million, up $10 million sequentially and down $8 million as compared to the same period a year ago. DSO was 47 days, down from 53 days last quarter and from the 50 days a year ago and now is now back to the normal range for the company. Net inventories at the end of the first quarter were approximately $353 million, about flat from the prior quarter and up from about $54 million from the year-ago period. Days of inventory were 88 days, down from the 89 days reported in the previous quarter. We expect our days of inventory to decrease further during Q2. Accounts payable were $323 million, an increase of $19 million from the prior quarter and about flat from the year-ago period. Now I would like to turn to our outlook for the second quarter of fiscal 2013. We currently project second quarter revenues to be in the range of $840 million to $890 million or up 6% to 12% sequentially. By end market, we expect our mobile and wireless end market to increase in the mid to high single-digit range sequentially, with growth driven by over 20% sequential increase in our TD smartphone revenue and positive seasonality in connectivity. We expect our networking end market to increase in the mid-single digit range sequentially, which is better than the broader end market. And finally, we expect our storage end market to increase between 10% and 15% sequentially with our 500 gigabyte mobile platform revenue growing about 50% sequentially. We currently project non-GAAP gross margin to be relatively flat at 54.5% plus or minus 50 basis points and currently anticipate non-GAAP operating expenses to be approximately $305 million, plus or minus $5 million. We anticipate R&D expenses to be approximately $245 million and SG&A expenses of approximately $60 million. At the midpoint of our revenue range, this should translate to a non-GAAP operating margin of approximately 19%, plus or minus 1 point. The combination of interest expense and other income together should net out to approximately a $2 million benefit. Non-GAAP tax expense should be approximately $2 million. We currently believe the diluted share count will be approximately 602 million shares. This share count does not reflect any share repurchases we may undertake during the quarter. Taken together, we currently project non-GAAP EPS to be about $0.28 per diluted share, plus or minus a couple of pennies. On the balance sheet, we currently expect to generate about $150 million of free cash flow during the quarter. We anticipate our cash balance to be about $2.3 billion, excluding any special items, M&A activity or continued share buyback. We currently expect our GAAP EPS to be lower than our non-GAAP EPS by about $0.07 per share, plus or minus $0.01. About $0.05 of this is related to stock-based compensation expense. Before I close, I would like to summarize our call today. As with many companies, we are affected by the sluggishness in the broader global economy. In addition to this, in the last year, we have been affected by the impacts to the supply chain from natural disasters and from transitions in the cellular market both on the technology and customer levels. We believe we have managed through these issues in a swift and thoughtful manner. Some investors question our ability to grow our business, and we understand the skepticism. We have always had a bias to action and to delivering results rather than talking about it. In light of the issues we face, consider the following 6 points: One, over the last 4 quarters, we have generated approximately $690 million of free cash flow. Two, by the end of Q2, we would have recovered from prior earthquakes and floods. Three, our storage networking and TD-SCDMA business are demonstrating significant share gains as evidenced by the last quarter and our expectations for this quarter. Four, in addition to these, we have a pipeline of growth opportunities queued up that we believe will continue to strip. These include: opportunities in solid-state drive controllers, video processing, ARM-based microcontrollers, LED lighting and yes, expansion of our share in our franchise hard disk drive market. We are investing in even more opportunities, which we believe will power our growth in the future. Five, we have returned about $1.7 billion to shareholders through share repurchases. And with the recent approval, we are able to increase that by another 50%. Six and finally, at the request of our institutional shareholders, we have initiated a dividend to deliver additional shareholder value. It has been a long and tough road in the last year, but we are strong as ever. We appreciate the support of the employees, customers and shareholders who have supported us over this period of time. With that, I would like to turn the call over to the operator to begin the Q&A portion of the call. Larry?

[Operator Instructions] And our first question comes from the line of John Pitzer of Credit Suisse. John W. Pitzer - Crédit Suisse AG, Research Division: I guess my first question is just relative to the 500 gig platter opportunity, can you give us a sense of what percent of your overall storage business that’s going to represent exiting the July quarter and where that might go over the next kind of 2 to 4 quarters? And is this really just being driven by the fact that any capacity that was destroyed during the flood just coming back on at 500 gig? Or can you help kind of explain the drivers behind that? Clyde R. Hosein: In Sehat's script he mentioned about 35%, so roughly 1/3 in Q2 will be at this capacity point, 1/3 of our units, and so we're fairly clear about that. As to the part of the question where this is going to grow, as we indicated earlier, the industry has been disrupted in the last year by earthquakes a year ago and more recently and more tragically in the floods. And that has disrupted the supply, so people would produce whatever capacity drives they could. In this case, if you have shortage of heads, you would produce the lowest -- the one that maximizes those units. We believe by the end of this quarter, the industry will recover to normal behavior patterns, which means that if you can deliver the highest capacity drive at essentially the same cost or moderate increase in cost, that will drive consumer behavior. And that's been proven in the industry over the last 20 years. So over the subsequent quarters, we expect that to increase. As we indicated, we have a very significant position in this space right now with -- supplying 500 gig to every customer on the planet [ph] , and we expect that strength to grow. John W. Pitzer - Crédit Suisse AG, Research Division: And then, guys, as my follow-up question just on the TD market, I think the concern in the marketplace is either this is going to end up to be somewhat of a niche market size and/or your competitive advantage that you have today is not going to be sustainable. So, Sehat, I was hoping you can maybe address where you think the ultimate unit size of the TD market is. And maybe Clyde, can you talk a little bit about your competitive position? And specifically pricing starts to become a weapon that other players come back at, what's your cost curve looks like versus the industry?

Yes. About a year ago, we have a lot of these questions that the market doesn't even exist, and now the question changed into this market is going to be a niche market. I would view that this is far from the truth. The market for TD is actually the market of the customer base, the number units of -- the number of customers of the China Mobile. So in this case, there are 650 or so million subscribers in China alone. So this is -- effectively, this is the size of the market of TD because after all, TD is the upgrade for the 2G customers that they have to date. So now this thing is -- this started last year, it's happening more this year, and we do expect this -- the number of units will continue to grow over the next several years, and then at some point you’ll see some of the high-end customers will move to the TD-LTE. So clearly the market is huge. Now, okay, I think we just have to wait and see, okay, whether our projection is true. But clearly, okay, while last year, they were very few competitors that even invested in this area, and this year, okay, the situation changed, clearly, it's okay, the fact that we are having competitors going to this market indicates that even the competitor believes that this market is going to be big, otherwise I don't think they want invest their resources to go after this market. Now competition is a good thing, Okay? It's going to drive the price down, okay? It's going to increase the volume. It's also -- it is going to drive the technology adoptions, push the technology to more advanced technology. So this is no different than any other business that you -- I mean any high-volume business that we are in. So, okay, the older products will continue to have price erosions. Okay, we'll have to invest in newer technology, okay, newer products to, I mean, to compensate, to somewhat compensate the price erosions. And we are not concerned about this because this is the standard things that we have to do. So also we do believe, okay, this is just normal behavior, and then we'll continue to to invest in more advanced technology. I already mentioned in my call -- in my prepared statement that next one will be a more advanced CD, okay. Well in fact, okay, over the last few quarters, we already introduced -- released 8 TD-SCDMA modem, and so -- the TD-LTE. So as we continue over time, we're going to integrate more and more of this function into a single chip or fewer devices. Clyde R. Hosein: Yes. If I may complement what Sehat said. Remember the China Mobile is the principal carrier today, and they have over 650 million subscribers, which in time will convert over to TD and we believe at the right price point, will convert over to TD smartphone. So this is not a niche market by any measure. A big market like this will certainly attract a number of competitors, and we're seeing that already. But as Sehat just indicated, we will deal with competition. We know they'll use price. But they can't beat us on function and they're not beating us on function to date. So what else would you do if you didn't have the performance and functionality? So we expect that. We reduce costs this year, and we'll reduce it again next year and we'll integrate that reduction next year with increased function and reduced costs. So we think we'll deal with that adequately.

Our next question comes from the line of Harlan Sur of JPMorgan. Harlan Sur - JP Morgan Chase & Co, Research Division: Looks like you guys are ramping enterprise HDD share back into Seagate about 6 to 9 months ahead of plan. Can you just help us understand what were some of the performance differentiators that enabled you to get back into Seagate on an accelerated schedule? And then I have a follow-up question.

You want to go... Clyde R. Hosein: So we didn't say any particular customer. But we have said before that we've won the next-generation design and that we indicated that's beginning to ramp. This ramp with enterprise because of the customer qualification and data centers and the like tend to take longer than the client side of it. But that's actually not the only design we discussed today. We mentioned multiple new designs at other customers in that space. So we think enterprise will do well for us and the robustness of our design, the better signal-to-noise ratio, those are the factors that contribute to us winning that back. Harlan Sur - JP Morgan Chase & Co, Research Division: And then obviously the TD business was solid here in the quarter, looks solid again in the second quarter. There's been so much noise on the competitive environment on TD basebands. Is the team still confident about maintaining 60% share of the TD handset space looking into the second half of this year? And we're hearing that China Mobile is now targeting 35 million to 40 million smartphone shipments this year versus prior target view of 30 million. I'm just wondering if the team at Marvell is getting indications that, that is the case. Clyde R. Hosein: First of all the noise is coming from the competition mostly, and that seems to be a lot of words there, David taking on Goliath here. As far as the share, we have much higher than 60% currently, and we indicated that earlier. But to be fair, we've indicated this that competition in the second half will be much more intense as some of these products from our competitors come out, they come about the middle of this year. We know at least in one instance it is not close to our level of performance. The other one hasn't come out yet. So a lot of it is speculation, and I know people tend to play games and speculations. So when the products come for real into the market, competition in smartphones, I think that will be the best judgment on that. Harlan Sur - JP Morgan Chase & Co, Research Division: And then your view on China Mobile now looking at more like 35 million to 40 million smartphone shipments this year versus their prior view of 30 million? Clyde R. Hosein: So the indication we have is they have a set of target of 30 million, we know people are talking about numbers bigger than that. I think outside of the carrier subsidies, there might be opportunities to do that. That's probably in the lower cost areas, which is where you hear some of this noise coming from. But either way, it's a big opportunity. It's certainly not a niche opportunity. It's a big opportunity, whether it's 30 million or 35 million, I don't think it changes the needle. It's over 2.5x from where it is today, and we're very competitive.

Our next question comes from the line of Glen Yeung of Citi. Glen Yeung - Citigroup Inc, Research Division: Cisco just reported a quarter and kind of had some squishy outlook for kind of their market and kind of this broader enterprise market. I just wondered if you can talk about what you're seeing? It sounds slightly more optimistic; my sense is you're gaining share in other products, but just any comments you have around that. Clyde R. Hosein: Our end market, I would say resemble what you see in -- from certain customers, and I would say broadly, so I don't think there's anything different in that. But as you indicated where we have been outperforming at least for about a year now, 9 months to a year is in some of the new products share gains in some of those areas. Like we said, this quarter, we took the opportunity to identify these new products, which include PON, PLC and the like, we indicated on our call earlier, grew about 20% last quarter. So the new products that we bring into market, the high-end switch and the configurable Ethernet devices is what's driving us better than market performance. And I expect that actually to increase as the year goes on. You look at our Q2 mid-single digit guidance is above where most people are talking about. So your assertion is correct, it's new products and share gains.

I would just want to add a little bit, in the prepared earning, I made a statement, we also talked about mobile backhaul, wireless backhauls, those that came from -- typically those that came from different supplier base... Glen Yeung - Citigroup Inc, Research Division: Maybe as a follow-up, again, obviously TD doing very well, but you're coming off of quarters were there was some buildup of inventory that had to work down. What's your sense now of the inventory management that you see coming from China Mobile? Are you more comfortable now that they're better able to manage those inventories? Clyde R. Hosein: The inventory decline was in our Q4, and it turns out that it burnt out mostly in Q4, early Q1. To be clear, the inventory lumpiness, if you may, is really not so much China Mobile than the handset guys who build into that system. Part of it -- so I don't think that's changed. I think you'll see still some of that. But it's hard for us to get visibility because a fair amount of these don't have the systems that typical, bigger handset manufacturers have. So part of it is forecasting, part of it is some of these smaller handset guys who indicated we have over 70 handsets, I believe. So it's hard to get the systems in there and we need to be patient as we go through. But I wouldn't say the inventory is huge. The ability to forecast it I would say improved, but not near where we wanted to be.

Our next question comes from the line of Ross Seymore of Deutsche Bank. Ross Seymore - Deutsche Bank AG, Research Division: In prior quarters, you talked about last year, I believe, about 4 percentage points of growth was the impact in your storage business because of the floods. I know you've said that we're now back to shipping at demand just by the end of this quarter, at least production being back to normalized levels. Have we already picked up that 4 points? Or is that something that's yet to come as you continue to refill the channel? Clyde R. Hosein: The 4 points, Ross, was the annual basis and you just looked in this quarter. So you have to look on the full year basis. But by the time the year is over, I think most of that 4 points would go away. But beyond that, I think we will pick up share in the storage space, and we are picking up share in Q2 in the storage space. So I would expect us this year to wipe out that 4, and then make up for it. Ross Seymore - Deutsche Bank AG, Research Division: And then just switching gears for the follow-up over to the gross margin side of things. I know you've talked longer term as you get into the high-volume markets that your former margin level might not be a logical conclusion. But as we think sequentially through the back half of the year, can you talk us through some of the trade-offs on gross margin as the different segments of your business grow? Clyde R. Hosein: Yes. I won’t describe it by segments for a variety of reasons. But the dynamics we've experienced with pricing compression between what our customers typically expect and what the industry has typically developed, we are developing plans on wafers. We have one foundry starting to ship production quantity this quarter. We are qualifying another foundry this quarter and a third -- and a fourth one in the subsequent quarter. These are early qualifications. But the message is we are beginning to diversify from that, which we expect to give us some relief on the wafer pricing side. Other headwinds we've had has been the price of gold. As we all know it's improved, it's increased substantially, still sustained in the $1,600, $1,700 range, and that's been a headwind. However, we've been moving over to copper carefully with the cooperation of our customers. And this quarter, we actually -- in Q1, we actually made a meaningful increase in copper, and that number substantially improved. So still sort of small numbers compared to gold, but we begin to see the fruits of our efforts in that area. And so those are the 2 big areas for us. Mix will affect us as we go through, but we think we'll manage through that. Certainly let's say if you look ahead a year from now when some of these cost reduction efforts, we should expect to see some tailwinds on it; and then between now and then, some moderate improvement.

Our next question comes from the line of Srini Pajjuri of CLSA. Srini Pajjuri - Credit Agricole Securities (USA) Inc., Research Division: On the W-CDMA front, Sehat, you mentioned that it tracked a little better than expected. First of all, on the RIM side, given that I know it's not 10% but I think it's still north of 5%, given all the problems that a customer is having, how should we think about that business going forward? And then if you can talk about the W-CDMA portion as well.

I don’t know if I want to talk about any particular customer. Do you want to address that, Clyde? Clyde R. Hosein: Well, we're always cautious about discussing for the customer's business of any customer. I think that customer has had challenges. We've acknowledged it. Our business with them, our shared business has improved from a year ago. But the way it goes from here, I think is anybody's guess. We obviously wish them well. To W-CDMA, it made an improvement from last quarter. We did indicate it's moderate. The point is that we are making inroads in W-CDMA areas, and we expect that to continue to grow. It's a tough road. The competition, we participate in low-cost W-CDMA phones. I think Sehat has been clear for years now, that's a target market of his. Since then and particularly in the last 9 months, there have been increased competition from some very reasonable names going after that same market that he had identified before. So the competitive environment has improved substantially, but we think we'll improve. As our stack gets more and more mature on the networks, we'll continue to get traction. So the thing that's changed in the last 9 months has been much more competitive presence with them having more mature stacks, has been a little bit of a headwind for us. But we think, we indicated today, we are making good headwind -- good improvements on that. Srini Pajjuri - Credit Agricole Securities (USA) Inc., Research Division: Okay, great. And, Clyde, on the balance sheet, you still have north of $2 billion and you're generating a lot of cash. If you could remind us what your plans for the cash is and how much you need to run the business and any potential M&A possibilities in the future. Clyde R. Hosein: We have, I just indicated over $2 billion. We've -- if you look at the -- we also announced today an increase in our buyback, which brings about $800 million of share buybacks, so that gives you one indication of what we intend to do with that. We initiated the dividend, and that's a pivotal point for Marvell. So that's also something we intend to continue, although we announce it on a quarterly basis. As to M&A, we do acquire IT from time to time, and we'll continue to acquire IT. Obviously there is no big deals that would make a big chunk of it because we think that there are much more cost-effective ways for us to accomplish our strategic objectives without having to do blockbuster deal that are extremely expensive compared to some of our competitors. So we think that we'll continue to acquire IP. We look at IP continuously, and we'll continue to buy IP. The most recent one we did that you know about is Xelerated deal, for example, that was moderate in cost but it's already have a meaningful impact on revenue, and that will continue to be our strategy.

Our next question comes from the line of James Schneider of Goldman Sachs. James Schneider - Goldman Sachs Group Inc., Research Division: Just a follow-up on previous questions, can you talk about how you're thinking about balancing the dividends and the buyback at this point? Is there either a payout ratio you have in mind in terms of increasing the dividend to meet some pretty good payout ratio or stock price in mind of which you would do more dividends and less buybacks? Clyde R. Hosein: If I had a stock price in mind I certainly won't say it on this call, but I think we've indicated...

Although we did say especially. Clyde R. Hosein: Yes, we said especially that these prices -- We certainly believe that these prices, our stock is grossly undervalued. We have indicated -- in the last year, Jim, we've bought back a fair amount of stock and increased it. So that -- is a clear intention of what we intend to do -- continue to do on the share buyback. As to payout -- when we went to the process of dividend, one of the things we looked at is the precedence of companies that initiated a dividend and the data, we had indicated that people who initiate a dividend in our space had a range of 1% to 1.7% dividend yield. We chose the higher end of that as an initiation. I will not make any comments about whether we're going to increase that in the future. What I will say is that the board, every quarter, will look at this and will make the decision whether we increase it or not, given the other issues we have, macro issues in particular and obviously our business conditions. James Schneider - Goldman Sachs Group Inc., Research Division: That's helpful. And then maybe a follow-up. In terms of the business, obviously a lot of moving parts with hard drives, supply side, et cetera. But can you help us think about your seasonality going into Q3. What segments should be doing better or worse than normal, please? Clyde R. Hosein: Well, we only provide guidance for one quarter, so we stick to that. But Q3 typically is back-to-school and then Christmas builds, so I would expect to see improvement in that. But how big that is, is always the debate. And these folks on Wall Street, they always debate that every day. So that's the question is, how big will the back-to-school be? So I expect to see some improvement next quarter in broad market base, better seasonality for back-to-school and for Christmas builds, but how big that is...

Probably, it's too early. Clyde R. Hosein: Way too early to tell, but that's going to be the debate.

Yes. Considering nobody knows what's going to happen in Europe. Clyde R. Hosein: The one thing I want to leave you with and we tried to indicate that earlier is beyond macro, which we're all subject to, there's a lot of very good things uniquely happening with Marvell, whether it's on cell phones with TD or smaller extend W-CDMA, whether it's storage, whether we're gaining space, whether it's networking, every one of our end markets we indicated clear measures and clear areas where we are gaining share. So whatever happens next quarter is anybody's guess. But I think one thing we feel confident about is about the new products we bring to market and how successful they are in the market space, and I think that's one thing you can look forward to.

Our next question comes from the line of Doug Freedman of RBC. Doug Freedman - RBC Capital Markets, LLC, Research Division: If I could though, go and dig into the storage segment of your business, you've made the comment that you are back to sort of normal operating conditions. Yet, if I look at year-over-year comps, we're still forecasting sort of the midpoint of your guidance for storage to be down approximately 9% to 10% year-on-year. Can you help you me reconcile that? And then going forward, can you talk a little bit about how maybe you might -- how might we think about the mix of business overall changing as a percent of your overall sales? Clyde R. Hosein: So, Doug, we said first of all, by the end of the quarter it would be recovered. I think I said in the previous question, we expect improvement next quarter. So I don't think there's any intent for us to say in the full quarter it's fully restored. I think you need a full quarter next quarter to reflect that. Second point is if you go back to a year ago in the storage space, as you may recall, the earthquake happened I believe in March-April timeframe and recovered in the July timeframe. So I'll always caution you guys on the street when you look at year-to-year to understand both periods last year and this year. So last year, you had, our July quarter with back-end improvement from some of the disruptions earlier. And this year, we had the tail end of it. So keep that in mind, as you do. In terms of end market mix, it's really the same question, expect storage to continue to improve for 2 reasons. I think back-to-school and Christmas is usually an improvement, but there's also share gains we expect to start picking up in that space. SSD is still -- to see where that will go, we see an improvement but we still think HDDs are going to be a dominant storage technology, and we still think -- we believe we will gain good share, especially in the mobile and service space. In mobile and wireless, same seasonality effects, particularly in our connectivity business where you have a lot of gaming presence, gaming and printers. We expect seasonality in Q3 to improve, questionable as how big that's going to be. And we already talked at length today about TD. In networking, it's less of a seasonal factor with networking. Near term, I think there's been more inventory management, if you will, throughout the channel, as you can see across. So it's hard to say where that's going to go that's been very difficult for the street and for us to predict. But once again the thing that we're excited about is some of the new products that we introduced.

We're talking about the HDD. So as -- which I said we need also to, I think, to add more color, so that the business -- this ultrathin and -- I mean these Ultrabooks and ultrathin notebooks will still be the dominant storage technology, so will still be the HDD, as you mentioned. But over time, over the long run, a lot of these things, okay, will still be HDD, but will combine with some kind of hybrid capability, just like cars will still be dominant with gasoline engines with the supplemental hybrid capability, so this will be the same. Doug Freedman - RBC Capital Markets, LLC, Research Division: Great. If I could move onto another topic, you've done a great job on controlling your operating expenses recently. At what percent of revenue will you start increasing that investment on R&D and sales and marketing? Clyde R. Hosein: Not sure on percent of revenue, I think we'll increase it next quarter. If you look at the midpoint of our guidance, it's about $10 million increase this quarter. So there are areas we are invested in and products we already have -- in areas where we already have the products, we need to invest in the field, FAEs and the like. It's the same amount of new product tape-outs that drive our cost. So I think you'll see us increasing it cautiously, probably is the best way to look at it and based on product -- new product schedules, introduction as opposed to a percent of revenue.

But suffice to say that with -- we don't have anything that we -- that in our mind yet, that when you say, hey if we were to increase this, if our revenue goes up beyond sort of one [ph] . That's not in our mind because a lot of stuff is already in the pipeline. If there's anything, it's just minor tweaks here and there.

Our next question comes from the line of Craig Ellis of Caris & Company. Craig A. Ellis - Caris & Company, Inc., Research Division: Sehat, I think in your prepared remarks you mentioned that you'd have around 60% or greater HDD market share in the second quarter. Can you give us some context for where you thought it was in the first quarter? And is that greater than 60%, the number that you can improve upon in the back half of the year? And if so, how much? Clyde R. Hosein: Craig, I'll take that. At the low point in the flood and because of the flood -- only because of the flood, it probably was just about 56-ish percent, is best guess we have, 56%, 57%, something like that. And we expect to -- this quarter to be -- that number to start with a 6. And to your second part, where do I think that's going to go?

Craig, just to remind you that like half of our customer capacity was gone, completely gone because one whole factory was underwater, so that's half, half of one particular customer, so. Clyde R. Hosein: In terms of where that's going to go, we think it is going to increase. But it's better for me to tell you why we think it is going to increase. The obvious area we described before is where we are making good traction in the server enterprise space. That's one area. But in the mobile space, there's a couple of phenomenon going on. We indicated earlier that people didn't move to higher capacity drives, and we do a better job than any competitor in the space on that. And then thin ultra-notebooks where the maximum capacity for single platters is where it's going to go. So then mobile...

Because single platter is the only one that fits in the 7-millimeter drive. Clyde R. Hosein: Exactly, to compete with the Ultrabooks. So those reasons, if you look at your own buying behaviors where people want higher capacity drives and they want thinner form factor, we -- the logic was to tell you that we expect to increase it. So yes, we intend to increase it, but hopefully you understand the reasons why that will happen.

And our next question comes from the line of Mark Lipacis of Jefferies. Mark Lipacis - Jefferies & Company, Inc., Research Division: On 500 gigabyte platters -- 500 gigabyte per platter products, how big of a lead do you have? When do you expect to see a competitive product in the market?

To give you an idea, we started shipping our -- the early generation of 500 gigabyte per platter probably a year or so ago, maybe slightly more a year ago. And the response was already on the third or second or third generations of 500 gigabytes per platter, so it is very mature. It's extremely mature 500 gigabyte technology from our side. So I could say like -- depending how you say it, if you're on of the first to ship, more than a year ago lead, okay, to the third generation, maybe 6 months lead at least, so it depends how you measure it. So it doesn't matter actually to us because our customers once they qualify 500 gigabytes using our technology, okay, the next project will be to move onto the next one, to the next capacity point, either 640 or 750 gigabytes technology, which is about the same -- which will be significantly much harder to do, but that's where they have to put the R&D resources, as well as on our side, we're going to put our R&D resources to tackle the next problems, not last year problem.

With no further questions, I would now like to turn the conference back over to Mr. Sukhi Nagesh for closing remarks.

Thank you, Larry, and I would like to thank everyone for their time today and the continued interest in Marvell. We look forward to speaking with you in the coming months. Thank you, and goodbye.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may disconnect at this time. Have a great day.