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

Doug Freedman - RBC Capital Markets, LLC, Research Division Sanjay Devgan - Morgan Stanley, Research Division Glen Yeung - Citigroup Inc, Research Division Ryan Carver - Crédit Suisse AG, Research Division Harlan Sur - JP Morgan Chase & Co, Research Division Bobby Gujavarty - Deutsche Bank AG, Research Division Craig Berger - FBR Capital Markets & Co., Research Division James Schneider - Goldman Sachs Group Inc., Research Division Blayne Curtis - Barclays Capital, Research Division Ryan Goodman - CLSA Asia-Pacific Markets, Research Division

Good day, ladies and gentlemen, and welcome to the Second Quarter 2013 Marvell Technology Group Limited Earnings Conference Call. My name is Jeff and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Sukhi Nagesh, Vice President of Investor Relations. And you have the floor, Mr. Nagesh.

Thank you, Jeff, and good afternoon, everyone. Welcome to Marvell Technology Group's Second 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's Chairman and CEO; and Clyde Hosein, Marvell's 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. We will also 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 will 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 hybrid HDD, SSD, TD, TD-LTE, FDD-LTE, Wi-Fi and PON products. Statements of our general trends in the end markets we serve and future growth opportunities statements about market share, statements regarding our financial prediction for the third quarter of fiscal 2013 and our expectations about long-term growth. To fully understand the risks and uncertainties that may cause the results of differ from our expectations and outlook, please refer to today's earnings release, our quarterly latest report on Form 10-Q and subsequent SEC filings for a detailed description of our business and associated risks. 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 discrete events that management does not consider to be directly related to our core operating performance. Pursuant to the Regulation G, we have provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures in our second 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'd like to turn the call over to Sehat.

Thanks, Sukhi, and good afternoon, everyone. Today we reported second quarter revenues of approximately $860 million, reflecting an increase of over 2% sequentially. While this was below our initial expectations, we continue to deliver good profitability with second quarter non-GAAP gross margin of 53.6%, operating margin of 17% and earnings per share of $0.24. We also continue to return value to our shareholders, as we repurchased about 20 million shares and paid the company's first quarterly dividend of $0.06 per share. Our business was impacted by the slowing macroeconomic environment, starting in the middle of the quarter. We also faced continued challenges with lower volumes at our leading North American cellular customer, while demand slowed down at our Chinese smartphone customers. In addition, our increasing presence in price-sensitive consumer markets is modestly impacting our gross margin. Now let me provide more color on our performance and expectations across our end markets. First in our storage end markets, Q2 revenues increased by 7% sequentially. Storage now represents about 47% of revenues. The recent macro slowdown resulted in lower PC sales in Q2, and our drive customers are now forecasting flat market demand in calendar Q3. If true, this will be the first time in history that HDD demand is flat in Q3. We believe this conservative view in today's environment is healthy for the industry as it reduces the risk of inventory buildup. However, the drive industry may have to deal with the potential for improved demand, for example, as a result of the upcoming Windows 8 launch. Beyond the near-term end demand issues, there are a number of positive things happening in our storage business that I want to highlight. First in Q2, we continue to see strong growth for our 500-gigabyte per platter mobile drives, which grew over 30% in Q2 and represented over 1/3 of our unit shipments. As you know, we are the only provider of this 500-gigabyte mobile technology. We increased our shipments of 500-gigabyte per platter products to a major customer for their mobile drives, where we are a new supplier. We are now at about 10% of their core mobile platforms and expect our share of their mobile drives to increase over the next few quarters. Second, we are extremely well-positioned in small compact HDDs, targeting the Ultrabook market. We saw an opportunity for such small form factor drives as early as 4 years ago and subsequently started promoting 7-millimeter form factor to our customers. Not surprisingly, all of the 7-millimeter drives in the market today use our SoCs. Furthermore, the industry is pushing for even thinner drives with 5-millimeter form factor that are suitable for devices such as tablets. Our long-standing investment in SSDs will be a key factor that will enable these 5-millimeter form factor HDD technology in hybrid formats. Third, our SSD business continues to do very well with Q2 revenue growth of about 25% sequentially, primarily from new customer ramps. Our SSD design wins momentum remains strong, and we expect multiple devices including Ultrabooks and hybrid devices to come to market this year with our SSD controller technology. In Q3, we expect our SSD business to grow over 25%. For fiscal Q3, we anticipate our overall storage end market to grow low single digits sequentially. Now moving to our mobile and wireless end market. Q2 revenues were down 5% sequentially, and this end market constituted about 27% of overall sales. This was lower than our earlier forecast and was negatively impacted as our leading North American smartphone customers shipped lower volumes, even though our share at the customer increased. In addition, the revenue from TD smartphone customers in China declined due to slower than expected demand and increased competition, which I will address shortly. However, our TD revenue from customers outside China continued to grow. Overall, we expect our TD revenue for the next 3 to 6 months period to be muted as the effects of the macro continues and as we refresh our product line. Now, I would like to address the competitive landscape in mobile. As you know, consumers are now transitioning to low-cost smartphones at a much faster rate than in the past. We saw this stratagem coming early and subsequently over the past year, invested in developing in our next-generation unified 3G platform to address both the TD-SCDMA as well as the W-CDMA markets. We announced this highly differentiated new platform earlier this week. This platform includes a TD or W-CDMA modem, a high performance 1.2 gigahertz dual core processor, powerful 3D graphics, Wi-Fi, Bluetooth, Near Field Communications, GPS, RF, power management and more. We will be sampling this new platform to customers this quarter. In comparison, today, each of our main competitors currently address the TD or the W-CDMA markets with obviously completely different platforms. With our platform to pin to pin capability, our smartphone customers can leverage the same printer circuit board, handset design, operating system and application software to build high performance yet low-cost TD and W-CDMA smartphones with a single design effort. We have already received excellent feedback from our customers on this unified platform strategy. To further strengthen our competitive position in this market, we also are now working on extending our platform to include TDD as well as FDD-LTE, 4G technology. You should expect us to sample pin compatible 4G platform solutions to our customers early next year. In summary, for mobile, we have a strong upcoming product offering and as we build our product portfolio, we expect our existing and new customers to introduce new smartphones with Marvell Solutions. Now moving to wireless connectivity. We continue to make solid progress with the introductions of our next-generation combo device. This device is the industry's first 2 by 2 combo that integrates mobile MIMO 802.11ac Wi-Fi with other cutting-edge wireless technologies such as Near Field Communications and Bluetooth 4.0. This latest addition to our connectivity product family includes advanced power management and is designed specifically for consumer electronic devices and mobile computing platforms such as tablets and Ultrabooks. We have already excellent customer engagement for these products and expect to see consumer electronic devices with this technology in the market early next year. In the near term, we expect our attach rates for connectivity into tablets and Ultrabooks to notably increase as customers bring new products to market with our leading mobile MIMO 802.11n combo solutions. Elsewhere, our embedded Wi-Fi solutions continue to do well with market share of over 75% of printers and game consoles. However, consistent with what we are experiencing in the PC industry, we expect demand to be weaker than seasonally typical in Q3. Moving next to some of our new initiatives. In Q2, Sony and VIZIO, two leading OEMs, have started to ship Google TV platform based digital media adapters powered by our high performance ARMADA 1500 SoC, incorporating a dual core custom CPU with PC-like computing power and advanced video processing technology. Our proprietary Qdeo video post processing technology can handle multiple video sources and formats that effectively reduces the noise and artifacts associated with the video signal while at the same time, enhancing the picture quality. As a result, this device enables superior quality web browsing and high definition streaming on large screen devices and is already designed into multiple new connective home platforms that include the digital TVs, set-top boxes and media players. We are really excited about our opportunity in this developing market. Overall for fiscal Q3, we expect our mobile and wireless end market to decline mid-single digits sequentially due to continued smartphone demand weaknesses in North America and near-term favorable demand and competitive trends in China, as well as a stop to a seasonal demand in gaming systems and printers that use our embedded Wi-Fi solutions. Finally, turning to our networking end market. Q2 revenue grew to 4% sequentially and was in line with our earlier expectations. Our revenue growth was better than the overall end market, which grew only 1% sequentially. The networking end market represented about 22% of our total revenue in Q2. Our networking business continues to outperform the market due to growth in our new products, including PON, a 10 gig switching, network processing, Power Lines Communication or PLC and low power server processors, which collectively grew over 25% sequentially. Let me expand on these new products. First, our leading PON products continue to do very well, going up 30% sequentially in Q2. As a result of this growth, we have increased our share in the PON market to roughly 30% currently from basically 0% last year. We continue to be the only supplier -- a commercial supplier of highly integrated Universal PON solution addressing both the GPON and the EPON markets, thereby directly translating into lower operating costs for telco carriers. In addition, we also now are also expanding our PON silicon into new areas such as fiber to Ethernet, media converters and high end com gateways. With a full family of PON product offerings, our competitive positioning continues to be enhanced. Second, our network processors are already getting significant traction with Tier 1 customers, and revenue grew over 15% sequentially in Q2. Traditionally, network processors have seen their largest demand in the core of the infrastructure. The explosive growth of the Internet bandwidth has now driven the demand for intelligent network processors to the edge of the network. Consequently, we are seeing new applications for our highly programmable processors in segments such as mobile back black hole access in data centers. We are seeing significant penetration of our network processor solutions at customers such as Ericsson, ZTE and Huawei. Lastly, I would like to highlight 1 of our new product families serving the server market. In Q2, Dell and Mitek introduced the industry's first ARM-based servers, which are powered by our quad core ARMADA XP processor, running at 1.6 gigahertz and comes with a 40-bit large physical address extension or LPAE that can adequately handle server class data sets, meaning large data sets. Marvell is the first chip supplier to bring to market an ARM-based server with a solution that has the same file I/O transaction performance benchmarks as the current x86 based solution in the market while achieving double the storage density in half the space. The solution effectively addresses system segments of the server market like the web servers, which are moving away from compute function and for silo to a system that integrates networking functions like load balancing and storage into a converged element. We already have multiple design wins for this product at North American customers and also starting to see good tractions at key customers in China. For Q3, we expect our overall networking end markets to grow low single digits sequentially, driven by the new product areas. In summary, while we faced unexpected demand headwinds in Q2, we continue to deliver growth in our storage and networking end markets to share gains and new product ramps. We're gaining share in HDDs and ramping up our SSD products at tier 1 customers. We are increasing our footprint in networking in new areas and performing better than the end market as a whole. We acknowledge the near-term challenges we face in our mobile end market and are investing in new and exciting products to grow in the near future. In the meantime, we continue to deliver shareholder value through our share repurchase and dividend programs. And now I'd like to turn the call over to Clyde to review our financial results for the second quarter and to provide our current outlook for the third quarter. Clyde R. Hosein: Thank you, Sehat, and good afternoon, everyone. As Sehat mentioned, we reported revenues for the second quarter of fiscal 2013 of $816 million, representing a 2% sequential increase and down about 9% from the same period a year ago. The shortfall in Q2 was distributed roughly equally between storage and cellular revenues. In storage, as Sehat mentioned earlier, lower PC sales resulted in our drive customers reducing production during the June quarter, which impacted our revenue in our July quarter. In cellular, we experienced demand weakness at our North American and China-based smartphone customers, as well as increasing competitions of TD smartphones. Our non-GAAP gross margin for the second quarter was 53.6%. Our overall operating expense in the second quarter on a non-GAAP basis were $298 million. R&D expenses for the quarter were $241 million and SG&A expenses were $57 million. This resulted in non-GAAP operating margin of 17% for the quarter. Net interest expense and other income was about $6 million and our tax expense for the quarter was approximately $3 million. This resulted in non-GAAP net income for the second quarter of $142 million or $0.24 per diluted share. The shares usually computed diluted non-GAAP EPS during the second quarter were $587 million. Cash flow from operations for the second quarter was $189 million as compared to $199 million recorded in the previous quarter. Free cash flow for the second quarter was $174 million compared to $178 million reported in the prior quarter. Let me now summarize our quarter results on a GAAP basis. We generated GAAP net income of $93 million or $0.16 per diluted share in the second quarter compared to $95 million or $0.16 per diluted share in the prior quarter and $192 million or $0.31 per share in the same period a year ago. The difference between our GAAP and non-GAAP results during the second quarter was mainly due to stock-based compensation expense of $33 million or about $0.05 per share and about $16 million or $0.03 per share related to amortization of intangible assets, acquisition-related and restructuring expenses. Now I'd like to review our balance sheet as of the end of fiscal Q2. Cash, cash equivalents and short-term investments were $2.1 billion, a decrease of $68 million sequentially. During the second quarter, we repurchased about 20 million shares for approximately $250 million. Over the past 8 quarters, we have repurchased and retired 127 million shares or about 19% of our outstanding shares. Also in the quarter, we initiated a payment of our first quarterly dividend of $0.06 per share for a total of $34 million. We expect to pay out next quarterly dividend of $0.06 per share on October 4 to all shareholders of record as of September 13. Accounts receivable was $391 million, down $27 million sequentially. DSO was 45 days compared to 47 days in the prior quarter. Net inventories at the end of the second quarter were approximately $346 million, down $8 million from the previous quarter. Days of inventory were 83 days, down from the 88 days reported in the previous quarter. Accounts payable was $335 million, an increase of $12 million from the prior quarter. Now I'd like to turn to our outlook for the third quarter of fiscal 2013. We currently project third quarter revenues to be in the range of $800 million to $850 million. At a midpoint of this range, this represents a modest 1% growth rate. This growth rate is well below what is our typical historical seasonality and has been due to the combination of a poor macro environment and cellular customer declines. Our forecast largely reflects our customer's view of near-term flattish demand environment. By end market, we expect our mobile and wireless end market to decrease mid-single digits due to continued demand weakness of smartphone customers. We expect our networking end market to grow low single digits in Q3 due to continued new product growth and share gains. Finally, we expect our storage end market to increase low single digits sequentially with double-digit growth for our 500 gigabytes for HDD mobile platforms and SSD controllers. For HDD in particular, we are projecting a couple of points of share gains in an otherwise conservative flat chance [ph]. We currently project non-GAAP gross margins to be relatively flat at 33.5%, plus or minus 50 basis points and currently anticipate non-GAAP operating expenses to be approximately $300 million, plus or minus $5 million. We anticipate R&D expenses to be approximately $245 million, and SG&A expenses of approximately $55 million. At the midpoint of our revenue range, this should translate to a non-GAAP operating margin of approximately 17% plus or minus 1 point. The combination of interest expense and income together should net out to approximately a $2 million benefit. Non-GAAP tax expense should be approximately $2 million. We currently believe diluted share count to be approximately 580 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 $0.24 per diluted share, plus or minus a couple of pennies. On the balance sheet, we currently expect to generate about $125 million of free cash flow during the quarter. We expect our cash balance to be about $2.2 billion, excluding any special items, M&A activity, a continued share buyback. We currently expect our GAAP EPS to be lower than our non-GAAP EPS by about $0.08 per share plus or minus a couple of pennies. About $0.06 of this is related to stock-based compensation expense. Before I close, I'd like to summarize our call today. As with many companies, we are affected by the sluggishness in the broader global economy and slower demand particularly in the network [ph]. Despite this, we continue to generate good profitability and continue to deliver shareholder value. We are managing and focusing our investments in areas of growth, which we expect to bear results over time. In storage, we expect to grow share in our core HDD business and expand our opportunities in the growing SSD market. We expect our networking business to continue to do well, driven by new products and share gains. Finally, while we experienced near-term headwinds in our mobile and market, we continue to be focused on bringing new products to market to take advantage of growth opportunities in the future. With that, I'd like to turn the call over to the operator to begin the Q&A portion of the call. Jeff?

[Operator Instructions] The first question comes from the line of Doug Freedman with RBC Capital Markets. Doug Freedman - RBC Capital Markets, LLC, Research Division: Sehat, can you go into the storage market for us and you give us a sense of what your outlook is from a total available TAM? I mean, it sounds like you guys are planning on growing the business through share gains. What do you think the overall market does because at some point, share gains are going to bottom out or reach a maximum peak for you and how should we think of your storage business going forward?

The key takeaway from our storage business is -- the key drivers for storage growth of our storage business at this point and moving forward is to address the ultra -- the small form factor, thin form factor drives, mobile drives is what I meant. So as we said earlier that we are the only supplier of the 500 gigabyte per platter in mobile drives and today it's only 30% or so of the shipments in the industry of the drives are in this storage capacity, and we expect that to grow to close to 100% maybe in a year or so, as the industry as usual, moves through the next generation capacity. So this is the growth factor based on what we talked about, share gain from our competitions even in the mobile space, where our competitor had a large market share in 1 of the customers in the older capacity point, 320 gigabytes. So that's 1 area. The other area is, clearly as mentioned earlier, the investment -- our investment in hybrid -- well, our investment in solid-state technologies. As you know, we've been investing in developing solid-state technology for like 6, 7 years already. And one of our plans from very early on is to utilize this technology to enhance, to supplement the hard drives to incorporate SSD as a hybrid in a hybrid form factor. So this is a very important technology that we are working on together, driving this technology especially in the -- even thinner form factor like the 5-millimeter form factor to address a very extremely high capacity, like I have to start with 500 gigabytes and even higher capacity later in the next couple of years, while at the same time, having the performance of solid-state, meaning like instant on or instant response times so a high-bandwidth in hybrid format. So this is the business. You mentioned about share gain. Share gain is one but more importantly, we do believe that as the industry is able to build -- the industry is able to introduce these hybrid ultra-thin form factors, these devices will be used not just for the traditional PCs but also for form factors that you think will not be the territory of hard drives. What I mean by that is like tablets. I don't know, is there anything else that you want to add? Clyde R. Hosein: No. So I think to summarize, I think for the near term, the share gains for the overall TAM, I think that the industry is moving to higher capacity, especially as people put video, our 500 gig per platter addresses that very effectively and thinner form factors and we have, like -- as Sehat mentioned, 100% chain 7-millimeter and positioned very well for 5-millimeter so I think we'll grow beyond share gains very well with new technologies in the industry.

Doug, do you have a follow up? Doug Freedman - RBC Capital Markets, LLC, Research Division: I guess, do those new technologies come at a higher content? Are you capturing more content per unit shipped with these newer technologies?

Yes. If we're talking about hybrids, the solutions are quite a bit more complicated. But in integrating these hybrids into SSDs, into HDDs well, regardless what you increase the cost, will still significantly reduce the costs compared to putting the solution on 2 separate PCBs or 2 separate form factors.

Our next question comes from the line of Sanjay Devgan with Morgan Stanley. Sanjay Devgan - Morgan Stanley, Research Division: First question, I just wanted to focus on the mobile and wireless business. I think you specifically talked about weakness at your large North American customer as well as macro concerns around the TD opportunity in Asia. If we just kind of focus specifically on the TD opportunity, I was wondering, given the outlook for that business in the back half of the year, how much of it would you kind of ascribe to kind of the general macro weakness that you guys had alluded to versus kind of the share dynamics coming in with new entrants coming into the market. And if you could just kind of give us your latest thoughts in terms of your positioning and share outlook as we exit the year and the TD market, that will be really appreciated. Clyde R. Hosein: It's hard to differentiate how much of it is going to be macro affected or not. To recap where we were before the effects of this macro is, China mobile had indicated TAM for TD smartphones growing from $12 million to $13 million. That pace so far hasn't lived up to that but -- so now we are speculating how much of that will happen in the second half and I think given the uncertainty we see, it's hard to see that. It's hard to predict that with any level of accuracy. To answer your question on share, we still ended up in the June quarter albeit, kind of subdued overall end market, at over 60% share. There is one particular competitor that's very price sensitive and as we indicated earlier, we will address it. But obviously, there's a limit to it. So how effective that strategy is going to be our products, still we believe our performance in our existing products, more better performance than the new one but so it's a smaller price gap but now you're looking at price versus performance. So I think that needs to play out probably in the next 3 plus months to get a better handle on that. Sanjay Devgan - Morgan Stanley, Research Division: And then I guess, just as a follow-up, I just wanted to touch on margins at 53% and change, we've talked about kind of getting back to 55%, 57% range. I was wondering if you could kind of talk about the foundry diversification efforts, remind us where we are and how do you think that kind of impacts margins going forward that versus mix, any thoughts there will be greatly appreciated. Clyde R. Hosein: So, we already at one of the 3 addition foundries bringing up, we are already shipping in volume quantities from that foundry already in Q2. That will continue to ramp as the year goes on. We expect to -- we qualified the second of 3 new foundries, qualification has happened, new products should come out of that next year, at least the one that work in tied products. And then we begin to qualify the third one in the next quarter so I'd say, our foundry diversification is on track. It's a long process. As you know, once you qualify the foundries, which is in itself long, you got to catch that on new products because customers generally don't want to re-requalify going backwards.

Our next question comes from the line of Glen Yeung with Citi. Glen Yeung - Citigroup Inc, Research Division: Can you guys describe your position in the white phone market in your China Mobile opportunity, sort of where you are in white phone relative to branded phones in that market? And what's your concern that the white phones are going to gain share over branded at the price points at which you're participating?

It's hard to say. It's a very fragmented market, as you very well know, Glen. I will tell you, our devices today is in north of 80 devices. So different phone devices out there. So I think we've got good presence in that space. How successful white, black smartphones is going to be, I think, is still undetermined at this point. But I think our presence in white phones is in pretty good shape. Glen Yeung - Citigroup Inc, Research Division: And then secondly, obviously it's a tough environment now in this handset market and essentially gets tougher as time goes by. What are the factors that Marvell considers to decide whether or not you want to stay in this business?

Let me answer this. We're definitely serious in this business. As we said earlier, we just introduced our second generation platform solutions for this market. This platform is the first time in our history that we combined, let me say, we integrate either TD-SCDMA technology -- modem technology or W-CDMA technology. So not just -- we've actually -- which quite -- it's pretty advanced to address very high volume yet price sensitive market. So I guess, you can say that maybe in hindsight, that we should have done this earlier where previously, we have 2 different platforms, 1 platform for the TD and the other platform for 3G. So we found out it's hard to split our resources, one resource addressing like I'll say, 80 different handsets being manufactured in the TD and then just -- it's hard for those customers to move to the 3G solutions while busy working on the TD solutions. But it's all behind us. All from now on, all our platforms based on single platform. Our TD -- our modem, our 3G modem technology is superior it's because they are used by a leading edge North American's smartphone customer. So now with these platforms, our customers are able to put the efforts, onetime efforts. In fact, most of the efforts come from us as well. We provide all the OS porting, the video porting, the graphics porting, the camera, the touchscreen porting. We provide all those things in a turnkey solutions, and we only do this because we are serious in this business because those are huge investments from us. It's actually -- to invest in this platform takes more resources than building the chip alone. Building chip actually is a small part of the cost of getting to this business. So we are already successful on our first-generation platform and we are confident that our second-generation platform will be even more successful, especially now we address not just the TD, we are also addressing the 3G market. And then as we move to the third-generation platform early next year with LTE, it will be even stronger because by that time, our platforms will be even -- our third generation will be way more mature, and combining with our advanced signal processing modem technology to address the LTE. Well, we are very, very serious in this business. This is after all, is the biggest market of semiconductors in the world. We cannot blink. We will not step back for any reason.

Our next question comes from the line of John Pitzer with Credit Suisse. Ryan Carver - Crédit Suisse AG, Research Division: This is Ryan Carver in for John Pitzer. Can you talk a bit more about your hard drive business, specifically around your largest customer? I mean, it seems like based on the recent quarter unit shipments that they're back to normalized levels. Yet if we look at hard drive revenues from you guys, obviously they were down year-on-year on April, but it looks like down double digits year-on-year for July and guidance is for sort of near double-digit year-on-year declines again. Can you talk about some of the dynamics there? If these guys are back to sort of normalized hard drive shipment unit levels? Is it share loss? Is it price erosion? Can you talk a little bit about that, please? Clyde R. Hosein: Not share loss by Marvell. I think both the 2 biggest players and customers in this space have indicated slowdown. I think a lot of the PC food chain guys are talking about the same thing. So they indicated flat TAM, both of them, from August to September. That's highly unusual. I think if you look back into the history of this industry that it's grown north of 10%. So it is unusual and obviously, surprising to us. But I saw the disconnects to them goes between their volume pricing, you'd have to ask them that question. I don't think it's appropriate for us to answer that. But with respect to Marvell, it's actually share increases as we discussed earlier. There's no -- any share. At any particular customer, I don't think there's any meaningful share erosion anywhere.

Maybe I want to add -- the thing our customers have mentioned in the earning call like a few weeks ago so that at the end of their quarter, they slowed down their productions. And that happens to be right at the middle of our quarter because our quarter is about 1 month off of their quarter. Clyde R. Hosein: So we've got some of the timing issues and of course, we've got 1 month on the other hand in October and no one is -- there's not a lot you can count on or predict right now in that quarter.

Ryan, you have a follow up? Ryan Carver - Crédit Suisse AG, Research Division: Yes. Just going over to the wireless side of things. I mean, I think Glen asked a question about white phones. Can you give us your thoughts on how you think the market in terms of units is going to split between sort of branded high end phones and sort of the white phone low end market? And so how much of that market you would expect to be able to address with a more high end solution and then the size of the market you plan on addressing with this more lower cost device and maybe how that will impact your expectations for gross margins going forward, if we assume that sort of lower end higher volume is going to be at a lower margin profile?

Maybe I'd just address this a little. In my view, knowing what this thing looks like, what the solutions especially our second-generation solutions coming out, when -- this unified platform device, the 2 devices that we just introduced, these are low-cost devices yet at the same time these are very high performance. These are dual core, 1.2 gigahertz processor, very powerful graphics. So these devices are used not just for -- when we say low cost, it means that it's not just low cost but it's very, very high performance. So the way we look at it is that the -- knowing what these things are capable of, these are devices that could be used -- they are very attractive for the tier 1 OEM -- for the OEMs and also very attractive for the white goods guys. So the differentiation between the white goods and the tier 1 OEM guys will be the industrial design. It will not be in the software because the software is going to be unified also. It will be standard operating systems, standard video, standard graphics. The differentiation will be who can procure a better LCD screen or better touch screen or better plastics or better industrial sexiness of the design. So because of that, you could argue that some of the OEMs will probably still have advantage in this area in getting maybe better pricings on this high-resolution LCD screen. The silicon is capable to run either low-resolution screen all the way to beyond 1080p screen. Even the video is capable of 1080p. So it's just a matter of customer whether they want to pay for the expensive screen or not. And the mobile -- I mean, the white goods guys will probably will focus their solution more on lower price lower-resolution screen markets, and the big boys will target for the higher resolutions, sexier markets, where they can charge somewhat higher price. So the white goods maybe will have more market share in replacing their feature phone markets, feature phone customers. For feature phone customers, they want to move to smartphones and the OEM guys will target the mobile TD customers.

Our next question comes from the line of Harlan Sur with JPMorgan. Harlan Sur - JP Morgan Chase & Co, Research Division: On TD in the near term, I mean obviously, it seems like the competition has sort of closed the gap very near term. I guess, what the market is trying to figure out is how is Marvell planning to maintain a sustainable competitive advantage in the TD market so you can sort of mitigate this leapfrogging of market share from one quarter to the next? And I think that what the theme is trying to tell us is that it's going to be based on performance differentiators, things like your dual core platform, TD-LTE. I guess, when should we expect these differentiators to sort of translate into a sustainable growth for Marvell. It seems like from what you're telling us today, we have to wait until next year but can you give us some color around that?

As I said earlier, in hindsight, we should have migrated to our platforms to a unified [ph] platform. We've been in this business only for 6 years. And to maintain 2 different platforms at the same time was very taxing for us. Part of reason there you see this issue of this leapfrogging because we've been busy spending our time unifying our solutions so that from now on, we do not have to deal with 2 platforms. As we -- from technology point of view, we have -- everybody knows we have superior technology. The customer knows about it, the carrier knows about it. It's just that when we have to battle 2 battle fronts, one is 3G and the other one's TD, we have to split our resources in the past. Now moving forward, we can unify these resources to 1 battlefront and if you're talking about -- with respect to revenue growth, in the past, we're only just addressing the TD for this platform solution. Now of course, everybody knows that the bigger market is actually the 3G. But now our 3G solutions will -- can ride on the platforms that we have developed for the TD and so that we can address the bigger market opportunity for smartphones. And then even at the next step, on the third generation of this platform, we can address -- we are also accelerating the deployment of LTE. So the LTE will address not just -- it will actually address mainly initially for the developed markets versus the developing markets. So this is yet another area that we've been absent in the past, especially talking about platform solution. So all these things we believe will give us the -- well, I guess, no pun intended, the platform sort of grow the revenue to -- in the developed world as well.

Any other follow up? Harlan Sur - JP Morgan Chase & Co, Research Division: Yes. I've got a follow up. So as we've seen the first wave of Ultrabook platforms being rolled out, it's kind of interesting to see that dual drive form factors are showing up before hybrid drive architectures. However, I do think that your customers will start rolling out hybrid drives in the second half of this year and certainly it will be more of the 2.5-inch mobile drive next year. Can you just talk about your controller share in hybrid drives? Is it as high as their overall HDD market share?

I think our -- in the emerging market, SSD controller, I do believe our market share is either equal or higher than the -- probably higher. If I have to guess, probably higher, but I would say, at least equal to our market share in the HDD business.

Our next question comes from the line of Ross Seymore with Deutsche Bank. Bobby Gujavarty - Deutsche Bank AG, Research Division: This is Bob Gujavarty for Ross. Just to touch on the SSD space a little bit, can you talk about today, where your exposure is mostly? Is it declining SSDs, the caching solutions, do you have any enterprise exposure? And maybe just also, I know you can't mention customers, but the merchant market, could you break down kind of -- I think Samsung still uses internal solutions but the other ones use merchants. So can you break down the merchants for this captive market for us just quickly? Clyde R. Hosein: Sure. I think of the 5 flash guys, one, the one I think you mentioned, uses captive, everybody else uses merchant. Most of our revenues, to the first part of your question, most of our revenues are on the client-side. We think that's where most of the revenue growth is. We do have content on the enterprise side and that's how we started off with SSD several years ago. But the growth opportunity is in the client side. And so, most of the growth we are describing is on the client side. Bobby Gujavarty - Deutsche Bank AG, Research Division: And just a quick follow-up on the wireless side. So does this W-CDMA solution, does that -- is that intention to open up the 3G market for you or is that something that was necessary just to kind of protect your TD position? I was just trying to think if this is an offensive move or just a defensive move on your part?

We always wanted to do this for a while. And this is the first time in our history that we are finally able to pull all the resources necessary to put both the 3G and a TD into a single platform. And we have to do this anyway because when we moved to LTE, we have no choice but to have a single platform. The stake is just too high to have multiple platforms. So you can call it offensive strategy, but this is the plan that we have for quite a while already and this the first result is what we introduced just a few days ago.

Our next question comes from the line of Craig Berger with FBR Capital Markets. Craig Berger - FBR Capital Markets & Co., Research Division: Within the wireless piece of the business, can you help us understand how much is discrete or combo connectivity versus the TD business, maybe versus the all-others cellular bucket. Clyde R. Hosein: Craig, we don't break that down. When we referred -- what we move into as I described is more platform solutions. So all of our TD products I'm going to refer to TD is the platform solution that includes the modem and apps processor on a single chip, along with the RF PMIC and then the connectivity devices. So it's all included in there. The industry is moving. There's a few customers, and they're notable customers but the industry is moving more and more to complete solutions. And so I believe over time, other than some isolated customers, people will move to solutions where your attach rate is with a complete solution. Other than one of our customer, well, a North America customer, our attach rate in all of our CPs is close to 100%. So we don't break that out discretely. Craig Berger - FBR Capital Markets & Co., Research Division: You mentioned that North American customer, you guys used to tell us about 7% or 8% of revenues. How would you characterize that going forward. Clyde R. Hosein: Lower. Craig Berger - FBR Capital Markets & Co., Research Division: Anything else there? Clyde R. Hosein: I'm not trying to be smart. It's difficult to predict where some...

Nobody asked you -- look we should not look down at people when they are in trouble. We do have high hopes there that they will recover and to be part of their future so our solutions -- now our solutions are unified, we can address not just the Asian markets or the European markets but also the existing North American customers. So this will be good for us. They're written to back to help. We can only benefit from there.

Our next question comes from the line of James Schneider with Goldman Sachs. James Schneider - Goldman Sachs Group Inc., Research Division: Maybe a follow-up on the gross margins. I know you talked about the fab diversification. But in terms of mix of business, how much should we think about your ability for gross margins to go up, say over the next 4 to 6 quarters? Can we expect 200 basis points more? I mean, how should we think about the overall mix of your business and your ability to improve costs within that, leading to gross margin expansion going up in the foreseeable future? Clyde R. Hosein: Jim, in spite of the erosions we have in the last year or 2, our gross margins today is still in the top 1, 2 or 3 of our peer group so it's still amongst the best. In terms of predicting the future, it's difficult to say where our growth revenue is especially, particularly in this environment. So I can only speculate. I know intrinsically, we are doing a number of things, including a foundry we described earlier, including moving from gold to copper. Those things will improve intrinsically, our gross margins. But how much one of our end markets grows versus another is difficult to predict. Heck, it was difficult to predict last quarter, it's difficult to predict going forward. James Schneider - Goldman Sachs Group Inc., Research Division: And maybe as a follow-up, maybe can you talk a little bit about your capital allocation thoughts at this point? Clearly, you've done very well in that front, you bought back a lot of stock but you still have the capacity to buy back a lot more or potentially increase the dividend. So can you maybe give us an update on your thoughts around that strategy and how you balance buyback versus dividend right now? Clyde R. Hosein: Our chalk [ph] work I think demonstrates what it is. We have returned value mostly through buybacks. But we initiated dividend and obviously intend to continue doing that. So I think we look at it from time to time, and we know what the tools are and we intend to use the tools from time to time as we see fit.

Our next question comes from the line of Blayne Curtis with Barclays Capital. Blayne Curtis - Barclays Capital, Research Division: I know you got a lot of questions on the wireless business. I did want to follow up there a little bit more. I mean, the W-CDMA market arguably is more competitive than TD. So just trying to understand, I mean, you didn't talk much about -- the focus has been on China and Asia. Can you talk about -- I appreciate the optimism with the North American customer but all indications are probably, they shrink more obviously, output Asia's could be less competitive, your progress there, and just how you look at the investments in this business. Is it profitable being based there?

W-CDMA markets is more competitive. Actually it's good because it means that the market's bigger. so we're not going to be shy from going to a market where the market has more players playing out there. After all, we have very, very advanced W-CDMA technology and if you look at the difference between W-CDMA and TD-SCDMA clearly, there's hardly a difference in die size, for example. In fact, in our platform, it is exactly the same die size because we want to make it exactly the same footprint compatible is maybe part of it. We want to have the same features, we want to have the same graphics, we want to have the same video, we have to run the same camera, processing technology, we want to have the same dual core. The key is this. The key is not to be competitive or more competitive or less competitive. The key is we already spent the OS porting, the video porting, the graphics porting. These are, as I said earlier, this takes -- the vast majority of our expense is going to those business. So if we already built -- if we already spent those resources, anything that we go after -- if we go after the 3G market, the W-CDMA market, it increased our TAM significantly without adding extra resources except for doing the final touchup I/O qualification when the handsets are built. But that's it. If the market's so much bigger, the net effect is that we have to get more revenue and more profits out of the same investment.

Blayne, do you have a follow up? Blayne Curtis - Barclays Capital, Research Division: Maybe just for Clyde on the gross margins, just from the guidance, flat. It seems like you should get a benefit with mobile and wireless being down and storage and networking being up. Am I misreading that? Clyde R. Hosein: Our range is plus or minus 0.5 points so let's see how it plays out.

Our final question comes from the line of Srini Pajjuri with CLSA. Ryan Goodman - CLSA Asia-Pacific Markets, Research Division: This is Ryan Goodman for Srini. Question is -- this was asked a little bit earlier but I'm still not entirely clear. On the W-CDMA, I know you guys have made some decent progress in some of the lower cost smartphones out there earlier in the year. And I understand the longer-term strategy is with this unified architecture with the TD and the W-CDMA going forward. I guess, where I'm unclear is like as I look out over the next 2 to 3 quarters, maybe can you talk a bit about how we should be expecting the business to track and any opportunities there, and then also just help confirm when we should expect a more unified technology products to start ramping and coming to market.

The statement that you're alluding to about early customer on the W-CDMA, those are on our previous -- from existing platform that we inherited from the Intel days. But as moving forward, every customers that we have moving forward will be on a single platform that we just announced earlier this week. So with regards to -- we already have that -- we already have running -- no, all the OS running already, making phone calls. So we will be sampling that platform this quarter to a number of customers. And by next quarter, we will ramp up to a lot more customers that we have. So in terms of -- we have high hopes that with this new platform strategy, we'll have a lot more 3G customers as a result. Ryan Goodman - CLSA Asia-Pacific Markets, Research Division: And then kind of a similar question more on the storage side. I understand long-term strategy with the SSD and the hard disk drives going to more of a hybrid solution leveraging both technologies, integrating them. As I look at -- to the next couple of quarters maybe 2 or 3 quarters, the Ultrabooks of this generation ramping, it sounds like you have decent exposure on the hard disk drive side. In terms of solid-state drives, I know you guys have a decent share there in the merchant solution both channel Ultrabooks. Can you talk about the strategy over that near-term base before the hybrids really gain that much traction? Clyde R. Hosein: I think the results and the forecast speaks for themsleves, Ryan. Recall earlier we said our SSD grew 25% quarter-over-quarter in Q2. We expect that the grow again 25% in Q3 and as some of these new Ultrabooks come to market. This growth is driven by Ultrabooks. So I think we have good pricings in that space. We as you see more of them come to market. I think you will see our revenues reflect. So 25 and 25 is pretty good traction and it reflects what you are asking.

I want to add. There is no reason why people that build their own flash, flash manufacturers they want to go to this business after they evaluate all of the available SSD technology in the market. We are clearly -- have the best SSD solution in the market. So this is the reason why 25% last quarter and we'll do again 25% next quarter.

With that, I'd like to close -- I'd like to thank everyone for the 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, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.