Marvell Technology Inc (MRVL)

[DJinNJ]

bbq, I agree the OCT 17.50s will probably stay pinned.

I also agree that this qtr should be pretty good based on all of MRVL's customer's press and earnings. I think the GM will move up, closer to 49%, but its hard to gauge how much of the Intel inventory was left over vs shipments from TSMC.

My big outstanding question is the tax rate (19%). I believe that I understand what is happening to create that high level, but the "why" has not been answered yet. As I understand the situation, MRVL is selling in a new country that has a very high initial tax rate. With a currently low volume of sales at this time, the tax rate is quite high, but as sales ramp up the tax rate reduces bringing the overall tax level back in-line.

So the question remains, where/what are they selling and to whom? I haven't seen any PR that answers this. I googled "high initial taxes" and found an entry that Finland and Sweden both have high initial tax rates. That led me to thinking of customers from those counties and then Nokia popped into my mind. It looks like Nokia is a small customer for MRVL only handling the E series of smartphones at this time. Could this be it? Nokia using more MRVL products?

I'm just trying figure out how they are going to get that tax rate back in-line.

Any thoughts? TIA
DJ