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What changed in Marvell Technology, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Marvell Technology, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+434 added−410 removedSource: 10-K (2023-03-09) vs 10-K (2022-03-10)

Top changes in Marvell Technology, Inc.'s 2023 10-K

434 paragraphs added · 410 removed · 331 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+23 added−19 removed36 unchanged
Biggest changeThese markets and their corresponding customer products and applications are noted in the table below: End market Customer products and applications Data center • Cloud and on-premise Artificial intelligence (AI) systems • Cloud and on-premise ethernet switching • Cloud and on-premise network-attached storage (NAS) • Cloud and on-premise servers • Cloud and on-premise storage area networks • Cloud and on-premise storage systems • Data center interconnect (DCI) Carrier infrastructure • Digital Subscriber Line Access Multiplexers (DSLAMs) • Ethernet switches • Optical transport systems • Routers • Wireless radio access network (RAN) systems Enterprise networking • Campus and small medium enterprise routers • Campus and small medium enterprise ethernet switches • Campus and small medium enterprise wireless access points (WAPs) • Network appliances (firewalls, and load balancers) • Workstations Consumer • Broadband gateways and routers • Gaming consoles • Home data storage • Home wireless access points (WAPs) • Personal Computers (PCs) • Printers • Set-top boxes Automotive/industrial • Advanced driver-assistance systems (ADAS) • Autonomous vehicles (AV) • In-vehicle networking • Industrial ethernet switches • United States military and government solutions • Video surveillance 4 The following table summarizes net revenue disaggregated by end market (in thousands, except percentages): Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Data center $ 1,784,644 40 % $ 1,040,726 35 % $ 823,841 31 % Carrier infrastructure 820,377 18 % 599,527 20 % 369,901 14 % Enterprise networking 907,736 20 % 636,032 22 % 569,574 21 % Consumer 699,985 16 % 574,627 19 % 845,825 31 % Automotive/industrial 249,641 6 % 117,988 4 % 90,020 3 % Total $ 4,462,383 $ 2,968,900 $ 2,699,161 This market-focused view provides more information and transparency about the key growth drivers of our business.
Biggest changeThese markets and their corresponding customer products and applications are noted in the table below: End market Customer products and applications Data center • Cloud and on-premise Artificial intelligence (AI) systems • Cloud and on-premise ethernet switching • Cloud and on-premise network-attached storage (NAS) • Cloud and on-premise servers • Cloud and on-premise storage area networks • Cloud and on-premise storage systems • Data center interconnect (DCI) Enterprise networking • Campus and small medium enterprise routers • Campus and small medium enterprise ethernet switches • Campus and small medium enterprise wireless access points (WAPs) • Network appliances (firewalls, and load balancers) • Workstations Carrier infrastructure • Broadband access systems • Ethernet switches • Optical transport systems • Routers • Wireless radio access network (RAN) systems Consumer • Broadband gateways and routers • Gaming consoles • Home data storage • Home wireless access points (WAPs) • Personal Computers (PCs) • Printers • Set-top boxes Automotive/industrial • Advanced driver-assistance systems (ADAS) • Autonomous vehicles (AV) • In-vehicle networking • Industrial ethernet switches • United States military and government solutions • Video surveillance 4 The following table summarizes net revenue disaggregated by end market (in millions, except percentages): Year Ended January 28, 2023 January 29, 2022 January 30, 2021 Data center $ 2,408.8 41 % $ 1,784.7 40 % $ 1,040.8 35 % Enterprise networking 1,369.2 23 % 907.7 20 % 636.0 22 % Carrier infrastructure 1,084.0 18 % 820.4 18 % 599.4 20 % Consumer 701.1 12 % 700.0 16 % 574.7 19 % Automotive/industrial 356.5 6 % 249.6 6 % 118.0 4 % Total $ 5,919.6 $ 4,462.4 $ 2,968.9 We categorize revenue from our five end markets by using a number of data points, including the type of customer purchasing the product, the function of our product being sold, and our knowledge of the end customer product or application into which our product will be incorporated.
Item 1. Business Our Company Marvell Technology Inc., together with its consolidated subsidiaries (“Marvell,” “MTI,” the “Company,” “we,” or “us”) is a leading supplier of infrastructure semiconductor solutions, spanning the data center core to network edge.
Item 1. Business Our Company Marvell Technology, Inc., together with its consolidated subsidiaries (“Marvell,” “MTI,” the “Company,” “we,” or “us”) is a leading supplier of data infrastructure semiconductor solutions, spanning the data center core to network edge.
Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial end markets. We currently are incorporated in Delaware, United States. Our corporate headquarters is 1000 N.
Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial end markets. We currently are incorporated in Delaware, United States. Our corporate headquarters is 1000 N.
Our electro-optical products include PAM (pulse amplitude modulation) and coherent DSPs (digital signal processors), laser drivers, TIAs (trans-impedance amplifiers), silicon photonics and DCI (data center interconnect) solutions. Our low-power and low-latency DSPs implement equalization, estimation, clock recovery, carrier recovery, forward error correction, and coded modulation to enable ultra-fast data transmission speeds.
Our electro-optical products include PAM (pulse amplitude modulation) and coherent DSPs (digital signal processors), laser drivers, TIAs (trans-impedance amplifiers), silicon photonics and DCI (data center interconnect) solutions. Our low-power and low-latency PAM DSPs implement equalization, estimation, clock recovery, carrier recovery, forward error correction, and coded modulation to enable ultra-fast data transmission speeds.
Our leadership has continued to engage and support employees through the pandemic in a range of ways, including sending frequent communication and resources, providing a number of four day “recharge weekends,” and surveying employees on the experience of working from home. See the Health & Safety section below for more details.
Our leadership has continued to engage and support employees through the pandemic in a range of ways, including sending frequent communication and resources, providing a number of four day “recharge weekends,” and surveying employees on the experience of working from home. See the Health and Safety section below for more details.
We believe that our ability to compete successfully in the rapidly evolving markets for our products depends on multiple factors, including, but not limited to: • the performance, features, quality and price of our products; • the development execution, timing and success of enhanced and new product introductions by us, our customers and our competitors; • the emergence, rate of adoption and acceptance of new industry standards; • market demand trends; • competitive tactics; • our ability to obtain adequate foundry capacity with the appropriate technological capability; and • the number and nature of our competitors in a given market.
We believe that our ability to compete successfully in the rapidly evolving markets for our products depends on multiple factors, including, but not limited to: • the performance, features, quality and price of our products; • the development execution, timing and success of enhanced and new product introductions by us, our customers and our competitors; • the emergence, rate of adoption and acceptance of new industry standards; • market demand trends; 10 • competitive tactics; • our ability to obtain adequate foundry capacity with the appropriate technological capability; and • the number and nature of our competitors in a given market.
Our Ethernet switch product portfolio ranges from low-power, five-port switches to highly integrated, multi-terabit Ethernet devices that can be interconnected to form massive network solutions. We complement our Ethernet switches and infrastructure processors with a broad selection of Ethernet physical-layer transceivers for both optical and copper interconnects with advanced power management, link security, and time synchronization features.
Our Ethernet switch product portfolio ranges from low-power, five-port switches to highly integrated, multi-terabit Ethernet devices that can be interconnected to form massive network solutions. We complement our Ethernet switches and infrastructure processors with a broad selection of Alaska Ethernet physical-layer transceivers for both optical and copper interconnects with advanced power management, link security, and time synchronization features.
The OCTEON processors are targeted for use in a wide variety of carrier, data center, and enterprise equipment, including routers, switches, security UTM appliances, content-aware switches, application-aware gateways, wireless access points, 3G/4G/5G wireless base stations, storage arrays, smart network interface controllers, network functions virtualization (NFV) and software-defined networking (SDN) infrastructure.
The OCTEON DPUs and processors are targeted for use in a wide variety of carrier, data center, and enterprise equipment, including routers, switches, security UTM appliances, content-aware switches, application-aware gateways, wireless access points, 3G/4G/5G wireless base stations, storage arrays, smart network interface controllers, network functions virtualization (NFV) and software-defined networking (SDN) infrastructure.
The key features include highly optimized processor cores, a highly efficient caching subsystem, high memory bandwidth digital signal processing engines along with a host of hardware accelerators. Additionally, multiple OCTEON Fusion-M chips can be cascaded for even denser deployments or higher order multiple-input and multiple-output, or MIMO.
The key features include highly optimized processor cores, a highly efficient caching subsystem, high memory bandwidth digital signal processing engines along with a host of hardware accelerators. Additionally, multiple OCTEON Fusion chips can be cascaded for even denser deployments or higher order multiple-input and multiple-output, or MIMO.
Our automotive Ethernet products provide the in-vehicle connectivity for key applications such as advanced driver assistance systems (ADAS), central gateways, body domain controllers, vehicle cameras, and in-vehicle infotainment. Fibre Channel Products Our QLogic Fibre Channel product family comprises of host bus adapters (HBAs) and controllers for server and storage system connectivity.
Our Brightlane automotive Ethernet products provide the in-vehicle connectivity for key applications such as advanced driver assistance systems (ADAS), central gateways, body domain controllers, vehicle cameras, and in-vehicle infotainment. Fibre Channel Products Our QLogic Fibre Channel product family comprises of host bus adapters (HBAs) and controllers for server and storage system connectivity.
See “Risk Factors” under Item 1A of this Annual Report on Form 10-K for a discussion of the risks associated with our international operations. Customers, Sales and Marketing Our target customers are original equipment manufacturers and original design manufacturers, both of which design and manufacture end market devices.
See “Risk Factors” under Item 1A of this Annual Report on Form 10-K for a discussion of the risks associated with our international operations. Customers, Sales and Marketing Our target customers are original equipment manufacturers (“OEMs”) and original design manufacturers, both of which design and manufacture end market devices.
We cannot be sure that any necessary licenses will be available or will be available on commercially reasonable terms. 9 The integrated circuit industry is characterized by vigorous pursuit and protection of intellectual property rights, which has resulted in significant and often time consuming and expensive litigation.
We cannot be sure that any necessary licenses will be available or will be available on commercially reasonable terms. The integrated circuit industry is characterized by vigorous pursuit and protection of intellectual property rights, which has resulted in significant and often time consuming and expensive litigation.
Our HDD controllers support all the high-volume host system interfaces, including Serial Advanced Technology Attachment (“SATA”) and Serial Attached SCSI (“SAS”), which are critical for the data center and enterprise markets. Our SSD controller products leverage our strong HDD controller know-how and system-level expertise.
Our Bravera HDD controllers support all the high-volume host system interfaces, including Serial Advanced Technology Attachment (“SATA”) and Serial Attached SCSI (“SAS”), which are critical for the data center and enterprise markets. Our Bravera SSD controller products leverage our strong HDD controller know-how and system-level expertise.
Our OCTEON Fusion-M family of wireless baseband infrastructure processors is a highly scalable product family supporting enterprise small cells, high capacity outdoor picocells and microcells all the way up to multi-sector macrocells for multiple wireless protocols including 5G.
Our OCTEON Fusion family of wireless baseband infrastructure processors is a highly scalable product family supporting enterprise small cells, high capacity outdoor picocells and microcells all the way up to multi-sector macrocells for multiple wireless protocols including 5G.
We integrate several of our HDD controller IPs with our flash technologies to deliver optimal solutions for data center, enterprise and client computing markets. Our SSD controller products integrate hardware and firmware components to help accelerate our customers’ time to market and maximize the capabilities of our solutions.
We integrate several of our Bravera HDD controller IPs with our flash technologies to deliver optimal solutions for data center, enterprise and client computing markets. Our Bravera SSD controller products integrate hardware and firmware components to help accelerate our customers’ time to market and maximize the capabilities of our solutions.
Our Ethernet solutions address a wide variety of end-customer data infrastructure products from small, high-reliability automotive sub-systems to large, high-performance modular enterprise and data center solutions. Our Ethernet switches integrate market-optimized innovative features, such as advanced tunneling and routing, high throughput forwarding, and packet processing that make networks more effective at delivering content with low-latency and high-reliability.
Our Ethernet solutions address a wide variety of end-customer data infrastructure products from small, high-reliability automotive sub-systems to large, high-performance modular enterprise and data center solutions. Our Prestera and Teralynx Ethernet switches integrate market-optimized innovative features, such as advanced tunneling and routing, high throughput forwarding, and packet processing that make networks more effective at delivering content with low-latency and high-reliability.
All of our products are compatible with standards-based operating systems and general-purpose software to enable ease of programming, and are supported by our ecosystem partners. Our OCTEON multi-core infrastructure processor families provide integrated Layer 4 through 7 data and security processing with additional capabilities at Layers 2 and 3 at line speeds.
All of our products are compatible with standards-based operating systems and general-purpose software to enable ease of programming, and are supported by our ecosystem partners. Our OCTEON data processor units (DPUs) and multi-core infrastructure processor families provide integrated Layer 4 through 7 data and security processing with additional capabilities at Layers 2 and 3 at line speeds.
Our OCTEON Fusion-M processors have also been designed into 5G base station radio units to enable Massive MIMO (Multiple Input Multiple Output) antenna and advanced Beamforming implementations. 6 Our NITROX security processor family provides the functionality required for Layer 3 to Layer 5 secure communication in a single chip.
Our OCTEON Fusion processors have also been designed into 5G base station radio units to help enable Massive MIMO (Multiple Input Multiple Output) antenna and advanced Beamforming implementations. 6 Our NITROX security processor family provides the functionality required for Layer 3 to Layer 5 secure communication in a single chip.
Our marketing team works in conjunction with our field sales and application engineering force, and is organized around our product groups. 7 During fiscal 2022, 2021 and 2020, there was no net revenue attributable to a customer, other than one distributor, whose revenues as a percentage of net revenue was 10% or greater of total net revenues.
Our marketing team works in conjunction with our field sales and application engineering force, and is organized around our product groups. 7 During fiscal 2023, 2022 and 2021, there was no net revenue attributable to a customer, other than one distributor, whose revenues as a percentage of net revenue was 10% or greater of total net revenues.
Manufacturing Integrated Circuit Fabrication The vast majority of our integrated circuits are fabricated using widely available CMOS processes, which provide greater flexibility to engage independent foundries to manufacture integrated circuits at lower costs. By outsourcing manufacturing, we are able to avoid the cost associated with owning and operating our own manufacturing facilities.
Manufacturing Integrated Circuit Fabrication The vast majority of our integrated circuits are fabricated using widely available CMOS processes, which is intended to provide greater flexibility to engage independent foundries to manufacture integrated circuits at lower costs. By outsourcing manufacturing, we are able to avoid the cost associated with owning and operating our own manufacturing facilities.
We complement and support our direct sales force with manufacturers’ representatives for our products in North America and Europe. In addition, we have distributors who support our sales and marketing activities in the United States, Europe and Asia. We also use third-party logistics providers who maintain warehouses in close proximity to our customers’ facilities.
We seek to complement and support our direct sales force with manufacturers’ representatives for our products in North America and Europe. In addition, we have contracted with distributors who support our sales and marketing activities in the United States, Europe and Asia. We also use third-party logistics providers who maintain warehouses in close proximity to our customers’ facilities.
See “Risk Factors” under Item 1A of this Annual Report on Form 10-K and “Note 11 -Commitments and Contingencies” in our Notes to the Consolidated Financial Statements set forth in Part II, Item 8, of this Annual Report on Form 10-K for further discussion of the risks associated with patent litigation matters.
See “Risk Factors” under Item 1A of this Annual Report on Form 10-K and “Note 6 – Commitments and Contingencies” in our Notes to the Consolidated Financial Statements set forth in Part II, Item 8, of this Annual Report on Form 10-K for further discussion of the risks associated with patent litigation matters.
For information regarding our revenue by geographic area, and property and equipment by geographic area, please see “Note 16 - Segment and Geographic Information” in our Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of this Annual Report on Form 10-K.
For information regarding our revenue by geographic area, and property and equipment by geographic area, please see “Note 15 – Segment and Geographic Information” in our Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of this Annual Report on Form 10-K.
These single chip, custom-designed processors provide complete security protocol processing, encryption, authentication and compression algorithms to reduce the load on the system processor and increase total system throughput. The LiquidSecurity product family is a high-performance hardware-based transaction security solution for cloud data center and enterprise applications. It addresses the high-performance security requirements for private key management and administration.
These single chip, custom-designed processors provide security protocol processing, encryption, authentication and compression algorithms to reduce the load on the system processor and increase total system throughput. The LiquidSecurity product family is a high-performance hardware-based transaction security solution for cloud data center and enterprise applications. It address the high-performance security requirements for private key management and administration.
See “Risk Factors” under Item 1A of this Annual Report on Form 10-K for a discussion of the risks associated with our intellectual property. We have expended and will continue to expend considerable resources in establishing a patent position designed to protect our intellectual property.
See “Risk Factors” under Item 1A of this Annual Report on Form 10-K for a discussion of the risks associated with our intellectual property. 9 We have expended and expect to continue to expend considerable resources in establishing a patent position designed to protect our intellectual property.
Environmental Management We are also subject to environmental rules and regulations in multiple jurisdictions, such as the EU Directive on Restriction of Hazardous Substances (RoHS), the EU Waste Electrical and Electronic Equipment Directive (WEEE Directive), China’s regulation on Management Methods for Controlling Pollution Caused by Electronic Information Products, and California Safe Drinking Water and Toxic Enforcement Act of 1986.
Environmental Management We are also subject to environmental rules and regulations in multiple jurisdictions, such as the EU Directive on Restriction of Hazardous Substances (RoHS), the EU Regulation, Evaluation and Authorization of Chemicals SVHC Substances Directive, the EU Waste Electrical and Electronic Equipment Directive (WEEE Directive), China’s regulation on Management Methods for Controlling Pollution Caused by Electronic Information Products, and California Safe Drinking Water and Toxic Enforcement Act of 1986.
Our sales force is strategically aligned along key customer lines in order to offer fully integrated platforms to our customers. In this way, we believe we can more effectively offer a broader set of content into our key customers’ end products, without having multiple product groups separately engage the same customer.
We seek to strategically align our sales force along key customer lines in order to offer fully integrated platforms to our customers. In this way, we believe we can more effectively offer a broader set of content into our key customers’ end products, without having multiple product groups separately engage the same customer.
Our current product offerings include custom ASICs, electro-optics, ethernet solutions, fibre channel adapters, processors and storage controllers. Custom ASICs We develop custom SoC (System-on-a-Chip) solutions tailored to individual customer specifications that deliver system-level differentiation for next-generation carrier, networking, data center, machine learning, automotive, aerospace and defense applications.
Our current product offerings include custom Application Specific Integrated Circuits (“ASICs”), electro-optics, ethernet solutions, fibre channel adapters, processors and storage controllers. Custom ASICs We develop custom SoC (System-on-a-Chip) solutions tailored to individual customer specifications that deliver system-level differentiation for next-generation carrier, networking, data center, machine learning, automotive, aerospace and defense applications.
Cyber Security and Information Security Risk Oversight The Company has a Cyber Security Governance Committee composed of executives and subject matter experts who meet no less than quarterly to review the Company’s information security, programs, policies, and projects. The Company’s Internal Audit Group reviews the cyber security governance and controls every other year.
Cyber Security and Information Security Risk Oversight The Company has a Cyber Security Governance Committee composed of executives and subject matter experts who meet no less than quarterly to review the Company’s information security, programs, policies, and projects. The Company’s Internal Audit Group reviews the cyber security governance and controls annually.
For the automotive market, we offer a complete automotive-grade portfolio of Ethernet physical-layer transceivers, bridges and switches supporting speeds from 100Mbps to 10Gbps with enhanced safety and security features required for today’s and tomorrow’s in-vehicle networks.
For the automotive market, we offer an automotive-grade portfolio of Brightlane Ethernet physical-layer transceivers, bridges and switches supporting speeds from 100Mbps to 10Gbps with enhanced safety and security features required for today’s and tomorrow’s in-vehicle networks.
Companies that compete directly with our businesses include, but are not limited to, Advanced Micro Devices, Inc., Broadcom Inc., Cisco Systems, Inc., Credo Technology Group Holding Ltd, Intel Corporation, MACOM Technology Solutions Holdings, Inc., MediaTek Inc., Microchip Technology Inc., Nvidia Corporation, NXP Semiconductors N.V., Phison Electronics Corporation, Qualcomm Incorporated, Realtek Semiconductor Corporation, Semtech Corporation, Silicon Motion Technology Corporation, and Socionext Inc.
Companies that compete directly with our businesses include, but are not limited to, Advanced Micro Devices, Inc.(“AMD”), Astera Labs, Inc., Broadcom Inc.(“Broadcom”), Cisco Systems, Inc.(“Cisco”), Credo Technology Group Holding Ltd, Intel Corporation, MACOM Technology Solutions Holdings, Inc., MediaTek Inc., Microchip Technology Inc., Montage Technology, Nvidia Corporation, NXP Semiconductors N.V., Phison Electronics Corporation, Qualcomm Incorporated (“Qualcomm”), Rambus, Inc., Realtek Semiconductor Corporation, Semtech Corporation, Silicon Motion Technology Corporation, and Socionext Inc.
West Street, Suite 1200 Wilmington, Delaware 19801, and our telephone number is (302) 295-4840. We also have operations in many countries, including China, India, Israel, Japan, Singapore, South Korea, Taiwan and Vietnam. Our fiscal year ends on the Saturday nearest January 31.
West Street, Suite 1200 Wilmington, Delaware 19801, and our telephone number is (302) 295-4840. We also have operations in many countries, including Argentina, China, India, Israel, Japan, Singapore, South Korea, Taiwan and Vietnam. Our fiscal year ends on the Saturday nearest January 31. Available Information Our website address is www.marvell.com.
Climate Change Marvell recognizes that climate change may pose potential risks and may create potential opportunities to our organization and is taking steps to further identify and assess the nature and magnitude of these risks and opportunities.
Climate Change Climate change is an important topic for Marvell. We recognize that climate change may pose potential risks and may create potential opportunities to our organization and are taking steps to further identify and assess the nature and magnitude of these risks and opportunities.
Assembly and Test We outsource all product packaging and testing requirements for our products in production to several assembly and test subcontractors primarily located in Taiwan, Canada, Korea, Singapore and China. 8 Governmental Regulations Import/Export, National Security and Other Regulations Related to International Operations and Ownership We are subject to laws and regulations worldwide, which may differ among jurisdictions, affecting our operations in areas including, but not limited to: intellectual property ownership and infringement; tax; import and export requirements; anti-corruption; foreign exchange controls and cash repatriation restrictions; conflict minerals; data privacy requirements; competition; advertising; employment; product regulations; environment, health and safety requirements; and consumer laws.
Governmental Regulations Import/Export, National Security and Other Regulations Related to International Operations and Ownership We are subject to laws and regulations worldwide, which may differ among jurisdictions, affecting our operations in areas including, but not limited to: intellectual property ownership and infringement; tax; import and export requirements; anti-corruption; foreign exchange controls and cash repatriation restrictions; conflict minerals; data privacy requirements; competition; advertising; employment; product regulations; environment, health and safety requirements; and consumer laws.
See our discussion of research and development expenses in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Annual Report on Form 10-K for further information.
We have invested and expect to continue to invest a significant amount in research and development. See our discussion of research and development expenses in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Annual Report on Form 10-K for further information.
This allows us to focus our efforts on the design and marketing of our products. We work closely with our foundry partners to forecast on a monthly basis our manufacturing capacity requirements. We closely monitor foundry production to ensure consistent overall quality, reliability and yield levels. Our integrated circuits are currently fabricated in several advanced manufacturing processes.
This is intended to allow us to focus our efforts on the design and marketing of our products. We seek to work closely with our foundry partners to forecast on a monthly basis our manufacturing capacity requirements. We also seek to closely monitor foundry production to help ensure consistent overall quality, reliability and yield levels.
Inclusion & Diversity At Marvell, we value the uniqueness that an inclusive and diverse global team brings to our company, and we are focused on creating an environment that leverages the perspectives and contributions of each employee.
We value the uniqueness that a diverse global team brings to our company, and we are focused on creating an environment that fully leverages the perspectives and contributions of every individual.
We offer a variety of employee training programs, including management training programs aligned with the level of managers, technical training, mandatory compliance trainings and voluntary professional development opportunities. In addition, we organize a wide range of employee events designed to foster a sense of community at Marvell. The COVID-19 pandemic has presented challenges for all individuals and businesses.
In addition, we organize a wide range of employee events designed to foster a sense of community at Marvell. The COVID-19 pandemic has presented challenges for all individuals and businesses.
We rely on a combination of patents, copyrights, trademarks, trade secrets, contractual provisions, confidentiality agreements and licenses to protect our intellectual property. As of January 29, 2022, we have approximately 10,200 active U.S. and foreign patents issued and approximately 1,300 U.S. and foreign patent applications pending on various aspects of our technology.
We rely on a combination of patents, copyrights, trademarks, trade secrets, contractual provisions, confidentiality agreements and licenses to protect our intellectual property. As of January 28, 2023, we have over 10,000 issued patents and pending patent applications in the United States and other countries, covering various aspects of our technology.
We devote a significant portion of our resources to expanding our product portfolio based on a broad intellectual property portfolio with designs that enable high-performance, reliable communications over a variety of physical transmission media. We are also focused on incorporating functions currently provided by stand-alone integrated circuits into our integrated platform solutions to reduce our customers’ overall system costs.
We devote a significant portion of our resources to expanding our product portfolio based on a broad intellectual property portfolio with designs that are intended to enable high-performance, reliable communications over a variety of physical transmission media.
In order to offset expected declines in the selling prices of our products, we will need to continue to introduce innovative new products and attempt to reduce the cost to design and manufacture our products. To accomplish this, we intend to continue to implement design changes that lower the cost of manufacturing, assembly and testing of our products.
We expect that the average unit selling prices of our products will continue to be subject to significant pricing pressures. In order to offset expected declines in the selling prices of our products, we will need to continue to introduce innovative new products and attempt to reduce the cost to design and manufacture our products.
Intern and entry level professional new hires are an important part of our overall talent pipeline and strategy, as students and entry level professionals often have knowledge in the latest research and innovations, and we want Marvell to benefit from that knowledge.
Intern and entry level professional new hires are an important part of our overall talent pipeline and strategy, as students and entry level professionals often have knowledge in the latest research and innovations, and we want Marvell to benefit from that knowledge. 11 Competitive Compensation and Benefits We believe we provide comprehensive, market-competitive compensation and benefits, including affordable health and wellness coverage, globally and consider them a key priority for attracting and keeping top talent.
See “Note 4 - Business Combinations” and “Note 5 - Goodwill and Acquired Intangible Assets, Net” for more information. Available Information Our website address is www.marvell.com. The information contained on any website referred to in this Form 10-K does not form any part of this Annual Report on Form 10-K and is not incorporated by reference herein unless expressly noted.
The information contained on any website referred to in this Form 10-K does not form any part of this Annual Report on Form 10-K and is not incorporated by reference herein unless expressly noted.
We expect increased competition in the future from both emerging and established companies, as well as from alliances among competitors, customers or other third parties, any of which could acquire significant market share.
We expect increased competition in the future from both emerging and established companies, as well as from alliances among competitors, customers or other third parties, any of which could acquire significant market share. See “Risk Factors” under Item 1A of this Annual Report on Form 10-K for a discussion of competitive risks associated with our business.
Our technology density and power differentiators are critical for addressing the fast-growing high-capacity, nearline HDD data center and enterprise markets. To further enhance our HDD controller differentiation and value propositions, we offer customers preamplifier products as part of a chipset with our HDD controllers to increase our customers’ product efficiencies.
To further enhance our Bravera HDD controller differentiation and value propositions, we offer customers preamplifier products as part of a chipset with our HDD controllers, seeking to increase our customers’ product efficiencies.
The COVID-19 pandemic placed new emphasis on health and safety at Marvell, and we took various steps to promote the health, safety and wellness of our employees during the ongoing crisis.
To help create this environment, we seek to continue to evolve our programs and resources to support employees’ mental and physical wellbeing. The COVID-19 pandemic has placed a continued emphasis on health and safety at Marvell, and we took various steps to promote the health, safety and wellness of our employees during the crisis.
We have assembled a core team of engineers who have experience in the areas of complementary metal oxide semiconductor (“CMOS”) technology, digital signal processing, electro-optics, embedded microprocessors, mixed-signal circuit design, silicon photonics, and system-level architectures. We have invested and will continue to invest a significant amount in research and development.
We are also focused on incorporating functions currently provided by stand-alone integrated circuits into our integrated platform solutions to reduce our customers’ overall system costs. We have assembled a core team of engineers who have experience in the areas of complementary metal oxide semiconductor (“CMOS”) technology, digital signal processing, electro-optics, embedded microprocessors, mixed-signal circuit design, silicon photonics, and system-level architectures.
Our controllers integrate several key Marvell technologies spanning compute, networking, security and storage. These key technologies enable our controllers to be optimized performance-power solutions and help our customers high-efficient storage products. Our HDD controllers integrate Marvell’s industry-leading read channel technologies to enable higher volumetric densities at low power profiles and are being used by all the current HDD makers.
Our Bravera controllers integrate several key Marvell technologies spanning compute, networking, security and storage. These key technologies enable our controllers to be optimized performance-power solutions and to help our customers high-efficient storage products.
Securities and Exchange Commission (“SEC”). In addition, the SEC’s website, www.sec.gov, contains reports, proxy statements, and other information that we file electronically with the SEC. 3 Our Markets and Products Historically, we reported revenue from three product groups: networking, storage, and other.
Securities and Exchange Commission (“SEC”). In addition, the SEC’s website, www.sec.gov, contains reports, proxy statements, and other information that we file electronically with the SEC. 3 Our Markets and Products Our product solutions serve five large end markets: (i) data center, (ii) enterprise networking, (iii) carrier infrastructure, (iv) consumer, and (v) automotive/industrial.
We install and regularly update anti-malware and endpoint detection and response (EDR software) on all IT-managed systems and workstations to detect and prevent malicious code from impacting our systems. The Company has not experienced a material security breach in the last three years, and as a result, we have not incurred any net expenses from such a breach.
We conduct information security training as part of our ongoing compliance program, and every employee of the Company is required to participate in such training. We install and regularly update anti-malware and endpoint detection and response (EDR software) on all IT-managed systems and workstations to detect and prevent malicious code from impacting our systems.
We have already committed to setting a Science Based Target aligned with the latest climate science to remain within the 1.5°C warming limit established under the Paris Agreement, developing a low-carbon transition plan, and improving our climate change disclosures by reporting in alignment with the Task Force for Climate-related Financial Disclosures framework, including conducting a scenario analysis.
We have already committed to and are in the process of setting a Science Based Target aligned with the latest climate science to remain within the 1.5°C warming limit established under the Paris Agreement.
Because finer manufacturing processes lead to enhanced performance, smaller silicon chip size and lower power requirements, we continually evaluate the benefits and feasibility of migrating to smaller geometry process technology in order to reduce cost and improve performance.
Because more precise manufacturing processes are expected to lead to enhanced performance, smaller silicon chip size and lower power requirements, we continually seek to evaluate the benefits and feasibility of migrating to smaller geometry process technology in order to reduce cost and improve performance. 8 Assembly and Test We typically outsource all product packaging and testing requirements for our products in production to several assembly and test subcontractors primarily located in Taiwan, Canada, Korea, Singapore and China.
For example, government export regulations apply to the encryption or other features contained in some of our products.
For example, government export regulations apply to the encryption or other features contained in some of our products. A portion of the business we acquired in our Avera acquisition in fiscal 2021 requires facility security clearances under the National Industrial Security Program.
We have not been penalized or paid any amount under an information security breach settlement over the last three years. Further, the Company annually assesses its insurance policy and has determined not to purchase cyber related insurance.
The Company has not experienced a material security breach in the last three years, and as a result, we have not incurred any net expenses from such a breach. We have not been penalized or paid any amount under an information security breach settlement over the last three years.
See “Risk Factors” under Item 1A of this Annual Report on Form 10-K for a discussion of competitive risks associated with our business. 10 We expect that the average unit selling prices of our products will continue to be subject to significant pricing pressures.
To accomplish this, we intend to continue to implement design changes that lower the cost of manufacturing, assembly and testing of our products. See “Risk Factors” under Item 1A of this Annual Report on Form 10-K for a discussion of pricing risks.
We believe the combination of competitive compensation and career growth and development opportunities help to increase employee tenure and reduce voluntary turnover.
We regularly monitor employee turnover, as given the nature of our business, our success depends upon highly trained personnel with the technical skills necessary to execute on our business objectives. We believe the combination of competitive compensation and career growth and development opportunities help to increase employee tenure and reduce voluntary turnover.
We expect competition to further intensify as current competitors strengthen the depth and breadth of their product offerings, either through in-house development or by acquiring existing technology. In addition, some of our customers have chosen to develop certain semiconductor products internally and this trend may continue to proliferate.
Competition has intensified as a result of the increasing demand for higher levels of performance, integration and smaller process geometries. We expect competition to further intensify as current competitors strengthen the depth and breadth of their product offerings, either through in-house development or by acquiring existing technology.
Competition The markets for our products are intensely competitive, and are characterized by rapid technological change, evolving industry standards, frequent new product introductions and pricing pressures. Competition has intensified as a result of the increasing demand for higher levels of performance, integration and smaller process geometries.
Further, the Company periodically assesses its insurance coverage and has determined not to purchase cyber related insurance. Competition The markets for our products are intensely competitive, and are characterized by rapid technological change, evolving industry standards, frequent new product introductions and pricing pressures.
As such, Marvell is working to develop plans to mitigate and manage any potential material climate change risks and to benefit from any potential climate change opportunities. Marvell has a robust enterprise risk management process in place that may be leveraged to identify potential climate-related risks and to assess the magnitude of such risks.
Our Board of Directors receives periodic updates on our ESG performance. Marvell has an enterprise risk management process in place that may be leveraged to help identify potential climate-related risks and to assess the magnitude of such risks.
Our Board of Directors and Board committees provide oversight on certain human capital matters. The Audit Committee provides oversight of business risks and the Company’s Code of Business Conduct and Ethics, both of which have relevance for human capital.
Our executive management team also reviews our human capital initiatives and our progress on such initiatives. The Audit Committee provides oversight of business risks and ethics and compliance programs, both of which have relevance for human capital- and workplace-related issues.
Net revenue attributable to significant distributors whose revenues as a percentage of net revenue was 10% or greater of total net revenues is presented in the following table: Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Distributor: Distributor A 15 % 13 % 12 % Inventory and Working Capital We place firm orders with our suppliers up to 52 weeks prior to the anticipated delivery date and typically prior to an order for the product.
Net revenue attributable to significant distributors whose revenues as a percentage of net revenue was 10% or greater of total net revenues is presented in the following table: Year Ended January 28, 2023 January 29, 2022 January 30, 2021 Distributor: Distributor A 20 % 15 % 13 % Net revenue attributable to Distributor A increased due to the change of four large module makers from direct to distribution accounts to align with our support business model in Asia.
We have defined four core behaviors to help guide our actions and interactions with people both inside and outside the company: • Act with integrity and treat everyone with respect, • Innovate to solve customer needs, • Execute with thoroughness and rigor, and • Help others achieve their objectives. 11 Our focus is on creating an environment where people feel respected, valued and engaged.
Culture, Engagement and Development Marvell’s Core Behaviors lay the foundation of our culture and are centered around four key aspects: • Act with integrity and treat everyone with respect, • Innovate to solve customer needs, • Execute with thoroughness and rigor, and • Help others achieve their objectives.
Risks identified in this process are analyzed to determine the impact on the Company and the likelihood of occurrence. Such risks are continuously monitored. We conduct information security training as part of our ongoing compliance program, and every employee of the Company is required to participate in such training.
In addition to quarterly penetration testing, at least once a year, we bring in an independent third party security firm to perform additional tests and audits. Risks identified in this process are analyzed to determine the impact on the Company and the likelihood of occurrence. Such risks are continuously monitored.
The Board also conducts talent reviews and succession planning at least annually. The Company employed 6,729 people as of January 29, 2022. As of January 29, 2022, our global workforce was comprised of approximately: 99.5% full time employees and 0.5% part time employees.
The Executive Compensation Committee provides oversight of our overall compensation philosophy, policies and programs, and their respective alignment with our human capital strategy. The Company employed 7,448 people as of January 28, 2023. As of January 28, 2023, our global workforce was comprised of approximately: 99.6% full time employees and 0.4% part time employees.
Our employees sit across three geographical regions: 52% of employees are based in the Americas, 37% are in APAC (which includes India) and 11% are in EMEA. We continually monitor employee turnover, as given the nature of our business, our success depends upon highly trained personnel with the technical skills necessary to execute on our business objectives.
Our employees sit across three geographical regions: 48.6% of employees are based in the Americas, 40.4% are in APAC (which includes India) and 11.0% are in EMEA. At Marvell, we focus on employee retention by seeking to foster an environment where people can learn, develop, and advance their careers with us over the long term.
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Recent Developments On April 20, 2021, we completed our acquisition of Inphi Corporation (“Inphi”) in a cash and stock transaction. Inphi is a global leader in high-speed data movement enabled by optical interconnects. The consolidated financial statements include the operating results of Inphi for the period from the date of acquisition through our fiscal year ended January 29, 2022.
Added
Our Bravera HDD controllers integrate Marvell’s industry-leading read channel technologies to enable higher volumetric densities at low power profiles and are being used by all the current HDD makers. Our technology density and power differentiators are critical for addressing the fast-growing high-capacity, nearline HDD data center and enterprise markets.
Removed
In conjunction with the acquisition, Marvell Technology Group Ltd. and Inphi became wholly owned subsidiaries of the new parent company, Marvell Technology, Inc. on April 20, 2021. The parent company is domiciled in and subject to taxation in the United States. On October 5, 2021, we completed our acquisition of Innovium, Inc.
Added
Inventory and Working Capital We typically place firm orders with our suppliers up to 52 weeks prior to the anticipated delivery date and typically prior to an order for the product.
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(“Innovium”), a leading provider of networking solutions for cloud and edge data centers, in an all-stock transaction. The consolidated financial statements include the operating results of Innovium for the period from the date of acquisition through our fiscal year ended January 29, 2022.
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Starting in fiscal 2022 and through the first half of fiscal 2023, in response to a large increase in demand from our customers for our products in a majority of our end markets as they continued to invest in data infrastructure, our operations team continued to increase production with our global supply chain partners to alleviate supply constraints.
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Beginning with the second quarter of fiscal 2022, we changed our reporting to present revenue from five end markets. Our product solutions serve five large end markets: (i) data center, (ii) carrier infrastructure, (iii) enterprise networking, (iv) consumer, and (v) automotive/industrial.
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However, with the start of a broad inventory correction in the semiconductor industry, supply constraints have now mostly resolved. To secure capacity over the long term, we have entered into and expect to continue to enter into capacity reservation arrangements with certain foundries and partners for substrates.
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We believe this presentation provides a better understanding of our business. Accordingly, starting with the third quarter of fiscal 2022, we stopped reporting revenue by product group.
Added
Our integrated circuits are currently fabricated in several advanced manufacturing processes.
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We categorize revenue from our five end markets by using a number of data points, including the type of customer purchasing the product, the function of our product being sold, and our knowledge of the end customer product or application into which our product will be incorporated.
Added
The expiration of our patents range from 2023 to 2042, and none of the patents expiring in the near future are expected to be material to our IP portfolio as we are not substantially dependent on any single patent or group of related patents.
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These lead times were extended compared to prior years based on the manufacturing process and current capacity at the foundries and substrate suppliers. To secure additional capacity, we entered into capacity reservation arrangements with certain foundries and assembly and test partners.
Added
In addition, some of our customers have chosen to develop certain semiconductor products internally and this trend may continue to proliferate.
Removed
In connection with some of our acquisitions, we have been subject to regulatory conditions imposed by the Committee on Foreign Investment in the United States ("CFIUS") where we have agreed to implement certain cyber security, physical security and training measures and supply agreements to protect national security.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

187 edited+49 added−32 removed160 unchanged
Biggest changeYou should consider all of the risk factors described in our public filings when evaluating our business . • risks related to the impact of the COVID-19 pandemic or other future pandemics, on the global economy and on our manufacturing partners, customers, suppliers, employees and business; • risks related to our ability to scale our business; • risks related to the extension of lead time due to supply chain disruptions, component shortages that impact the production of our products, and constrained availability from other electronic suppliers impacting our customers' ability to ship their products, which in turn may adversely impact our sales to those customers; • risks related to changes in general economic conditions or political conditions, such as the tariffs and trade restrictions with China and other foreign nations, and specific conditions in the end markets we address, including the continuing volatility in the technology sector and semiconductor industry; • risks related to the ability of our customers, particularly in jurisdictions such as China that may be subject to trade restrictions (including the need to obtain export licenses) to develop their own solutions or acquire fully developed solutions from third-parties; • risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; • risks related to our ability to successfully integrate and to realize anticipated synergies, on a timely basis or at all, in connection with the Inphi transaction, Innovium acquisition and future acquisitions, divestitures, significant investments or strategic transactions; • risks related to our debt obligations; • risks related to the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries; • risks related to our dependence on a few customers for a significant portion of our revenue; • risks related to our ability to execute on changes in strategy and realize the expected benefits from restructuring activities; • risks related to our ability to maintain a competitive cost structure for our manufacturing and assembly and test processes and our reliance on third parties to produce our products; • risks related to our ability to attract, retain and motivate a highly skilled workforce, especially engineering, managerial, sales and marketing personnel; 13 • risks related to any current and future litigation and regulatory investigations that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business; • risks related to gain or loss of a design win or key customer; • risks related to seasonality or volatility related to sales into the infrastructure market; • risks related to failures to qualify our products or our suppliers’ manufacturing lines; • risks related to our ability to develop and introduce new and enhanced products, in particular in the 5G and Cloud markets, in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology; • risks related to failures to protect our intellectual property, particularly outside the United States; • risks related to the potential impact of a significant natural disasters or the effects of climate change (such as drought, flooding, wildfires, increased storm severity and sea level rise), particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third party suppliers operate, such as Taiwan and elsewhere in the Pacific Rim; • risks related to our Environmental, Social and Governance (ESG) programs; • risks related to severe financial hardship or bankruptcy of one or more of our major customers; and • risks related to failures of our customers to agree to pay for NRE (non-recurring engineering) costs or failure to pay enough to cover the costs we incur in connection with NREs.
Biggest changeNational Science and Technology Council’s designation of semiconductors as a critical and emerging technology; • risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; • risks related to the impact of the COVID-19 pandemic or other future pandemics, on the global economy and on our customers, suppliers, employees and business; • risks related to our ability to scale our business; • risks related to the extension of lead time due to supply chain disruptions, component shortages that impact the costs and production of our products and kitting process, and constrained availability from other electronic suppliers impacting our customers’ ability to ship their products, which in turn may adversely impact our sales to those customers; • risks related to the ability of our customers, particularly in jurisdictions such as China that may be subject to trade restrictions (including the need to obtain export licenses) to develop their own solutions or acquire fully developed solutions from third-parties; • risks related to our ability to design, develop and introduce new and enhanced products, in particular in the 5G and Cloud markets, in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology; • risks related to our ability to successfully integrate and to realize anticipated benefits or synergies, on a timely basis or at all, in connection with our past, current, or any future acquisitions, divestitures, significant investments or strategic transactions; • risks related to our debt obligations; • risks related to the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries; • risks related to our dependence on a few customers for a significant portion of our revenue including risks related to severe financial hardship or bankruptcy or other attrition of one or more of our major customers, particularly as our major customers comprise an increasing percentage of our revenue; • risks related to our ability to execute on changes in strategy and realize the expected benefits from restructuring activities; 14 • risks related to our ability to maintain a competitive cost structure for our manufacturing, assembly, testing and packaging processes and our reliance on third parties to produce our products; • risks related to our ability to attract, retain and motivate a highly skilled workforce, especially engineering, managerial, sales and marketing personnel; • risks related to any current and future litigation, regulatory investigations, or contractual disputes with customers that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business; • risks related to gain or loss of a design win or key customer; • risks related to seasonality or volatility related to sales into the infrastructure, semiconductor and related industries and end markets; • risks related to failures to qualify our products or our suppliers’ manufacturing lines; • risks related to failures to protect our intellectual property, particularly outside the United States; • risks related to the potential impact of significant events or natural disasters or the effects of climate change (such as drought, flooding, wildfires, increased storm severity, sea level rise, and power outages), particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third party manufacturing partners or suppliers operate, such as Taiwan and elsewhere in the Pacific Rim; • risks related to our Environmental, Social and Governance (ESG) programs; and • risks related to failures of our customers to agree to pay for NRE (non-recurring engineering) costs, failure to pay enough to cover the costs we incur in connection with NREs or non-payment of previously agreed NRE costs due to us.
Under Delaware law, our certificate of incorporation and bylaws and certain indemnification agreements to which we are a party, we have an obligation to indemnify, or we have otherwise agreed to indemnify, certain of our current and former directors and officers with respect to past, current and future investigations and litigation.
Under Delaware law, our certificate of incorporation, our bylaws and certain indemnification agreements to which we are a party, we have an obligation to indemnify, or we have otherwise agreed to indemnify, certain of our current and former directors and officers with respect to past, current and future investigations and litigation.
We cannot provide any assurances that future indemnification claims, including the cost of fees, penalties or other expenses, will not exceed the limits of our insurance policies, that such claims are covered by the terms of our insurance policies or that our insurance carrier will be able to cover our claims.
We cannot provide any assurances that any future indemnification claims, including the cost of fees, penalties or other expenses, will not exceed the limits of our insurance policies, that such claims are covered by the terms of our insurance policies or that our insurance carrier will be able to cover our claims.
See also, “ We rely on our manufacturing partners for the manufacture, assembly and testing of our products, and the failure of any of these third-party vendors to deliver products or otherwise perform as requested or to be able to fulfill our orders could damage our relationships with our customers, decrease our sales and limit our ability to grow our business. ” Moreover, the international nature of our business subjects us to risk associated with the fluctuation of the U.S. dollar versus foreign currencies.
See also, “ We rely on our manufacturing partners for the manufacture, assembly, testing and packaging of our products, and the failure of any of these third-party vendors to deliver products or otherwise perform as requested or to be able to fulfill our orders could damage our relationships with our customers, decrease our sales and limit our ability to grow our business. ” Moreover, the international nature of our business subjects us to risk associated with the fluctuation of the U.S. dollar versus foreign currencies.
As a result of the assessment, we determined the carrying amount of certain impacted assets are not recoverable, which have resulted in recognition of $119.0 million of restructuring related charges associated with the server processor product line during the second quarter of fiscal 2021. See “Note 10 - Restructuring” in the Notes to the Consolidated Financial Statements for further information.
As a result of the assessment, we determined the carrying amount of certain impacted assets are not recoverable, which resulted in recognition of $119.0 million of restructuring related charges associated with the server processor product line during the second quarter of fiscal 2021. See “Note 10 – Restructuring” in the Notes to the Consolidated Financial Statements for further information.
We can offer no assurance that such a request will be granted in a timely manner or at all. We are a party to certain contracts with the U.S. government or its subcontractors. Our contracts with government entities are subject to various procurement regulations and other requirements relating to their formation, administration and performance.
We can offer no assurance that such a request will be granted in a timely manner or at all. We are a party to certain contracts with the U.S. government or its subcontractors. Our contracts with the U.S. government or its subcontractors are subject to various procurement regulations and other requirements relating to their formation, administration and performance.
Increasingly regulators (including the U.S. Securities and Exchange Commission), customers, investors, employees and other stakeholders are focusing on Environmental, Social and Governance ("ESG") matters. While we have certain ESG initiatives at the Company there can be no assurance that regulators, customers, investors, employees, or other stakeholders will determine that these programs are sufficiently robust.
Increasingly regulators (including the U.S. Securities and Exchange Commission), customers, investors, employees and other stakeholders are focusing on Environmental, Social and Governance (ESG) matters. While we have certain ESG initiatives at the Company there can be no assurance that regulators, customers, investors, and employees will determine that these programs are sufficiently robust.
In addition, many of our competitors operate and maintain their own fabrication facilities and have longer operating histories, greater name recognition, larger customer bases, and greater sales, marketing and distribution resources than we do. In addition, the semiconductor industry has experienced increased consolidation over the past several years.
In addition, many of our competitors operate and maintain their own fabrication facilities and have longer operating histories, greater name recognition, larger customer bases, and greater sales, marketing and distribution resources than we do. Moreover, the semiconductor industry has experienced increased consolidation over the past several years.
See also, “ We may be unable to protect our intellectual property, which would negatively affect our ability to compete. ” From time to time, we receive and our customers receive, and we and our customers may continue to receive in the future, standards-based or other types of infringement claims, as well as claims against us and our proprietary technologies.
See also, “ We may be unable to protect our intellectual property, which would negatively affect our ability to compete. ” 33 From time to time, we receive and our customers receive, and we and our customers may continue to receive in the future, standards-based or other types of infringement claims, as well as claims against us and our proprietary technologies.
Collecting, measuring, and reporting ESG information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal and other risks, any of which could have a material impact, including on our reputation and stock price.
Collecting, measuring, and reporting ESG information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal and other risks, any of which could have a material impact on us, including on our reputation and stock price.
We also enter into confidentiality or license agreements with our employees, consultants and business partners, and control access to and distribution of our documentation and other proprietary information. Notwithstanding these agreements, we have experienced disputes with employees regarding ownership of intellectual property in the past.
We also enter into confidentiality or license agreements with our employees, consultants, manufacturing or other business partners, and control access to and distribution of our documentation and other proprietary information. Notwithstanding these agreements, we have experienced disputes with employees regarding ownership of intellectual property in the past.
Any disruption to our manufacturing or foundry partners could result in a material decline in our revenue, net income and cash flow. In addition, our testing and assembly partners may be single sourced and it may be difficult for us to transition to other partners for these services.
Any disruption to our or foundry partners could result in a material decline in our revenue, net income and cash flow. In addition, our assembly testing and packaging partners may be single sourced and it may be difficult for us to transition to other manufacturing partners for these services.
If we lose or experience a significant reduction in sales to any of these key customers, if any of these key customers experience a significant decline in market share, or if any of these customers experience significant financial difficulties, our revenue may decrease substantially and our results of operations and financial condition may be harmed. ” See also, “ Adverse changes in the political and economic policies of the U.S. government in connection with trade with China have reduced the demand for our products and damaged our business” for additional risks related to export restrictions that may impact certain customers in the 5G and Cloud markets.
If we lose or experience a significant reduction in sales to any of these key customers, if any of these key customers experience a significant decline in market share, or if any of these customers experience significant financial difficulties, our revenue may decrease substantially and our results of operations and financial condition may be harmed.” See also, “Adverse changes in the political and economic policies of the U.S. government in connection with trade with China have reduced the demand for our products and damaged our business” for additional risks related to export restrictions that may impact certain customers in the 5G and Cloud markets.
We do not have our own manufacturing or assembly facilities and have very limited in-house testing facilities. Therefore, we currently rely on several third-party manufacturing partners to produce our products. We also currently rely on several third-party assembly and test subcontractors to assemble, package and test our products.
We do not have our own manufacturing, assembly or packaging facilities and have very limited in-house testing facilities. Therefore, we currently rely on several third-party manufacturing partners to produce our products. We also currently rely on several third-party assembly, testing and packaging subcontractors to assemble, package and test our products.
Department of Defense with respect to FOCI mitigation arrangements that relate to our operation of the portion of the Avera business involving facility clearances. These measures and arrangements may materially and adversely affect our operating results due to the increased cost of compliance with these measures.
Department of Defense with respect to FOCI mitigation arrangements that relate to our operation of the portion of the business involving facility clearances. These measures and arrangements may materially and adversely affect our operating results due to the increased cost of compliance with these measures.
We typically do not enter into employment agreements with any of our key technical personnel and the loss of such personnel could harm our business, as their knowledge of our business and industry would be extremely difficult to replace.
We typically do not enter into employment agreements with any of our key personnel and the loss of such personnel could harm our business, as their knowledge of our business and industry would be extremely difficult to replace.
Commodity Prices We are also subject to risk from fluctuating market prices of certain commodity raw materials, including gold and copper, which are incorporated into our end products or used by our suppliers to manufacture our end products.
Commodity Prices We are also subject to risk from increasing or fluctuating market prices of certain commodity raw materials, including gold and copper, which are incorporated into our end products or used by our suppliers to manufacture our end products.
We make highly complex semiconductor solutions and, accordingly, there is a risk of defects in any of our products. Such defects can give rise to the significant costs noted below.
We make highly complex semiconductor solutions and, accordingly, there is a risk of defects in our products. Such defects can give rise to the significant costs noted below.
We anticipate that our manufacturing, assembly, testing and sales outside of the United States will continue to account for a substantial portion of our operations and revenue in future periods.
We anticipate that our manufacturing, assembly, testing, packaging and sales outside of the United States will continue to account for a substantial portion of our operations and revenue in future periods.
In the future, these customers may decide not to purchase our products at all, purchase fewer products than they did in the past, or alter their purchasing patterns in some other way, particularly because: • a significant portion of our sales are made on a purchase order basis, which allows our customers to cancel, change or delay product purchase commitments with relatively short notice to us; • customers may purchase similar products from our competitors; • customers may discontinue sales or lose market share in the markets for which they purchase our products; • customers, particularly in jurisdictions such as China that may be subject to trade restrictions or tariffs, may develop their own solutions or acquire fully developed solutions from third-parties; or • customers may be subject to severe business disruptions, including, but not limited to, those driven by financial instability, actual or threatened public health emergencies such as the COVID-19 pandemic, or other global or regional macroeconomic developments.
In the future, these customers may decide not to purchase our products at all, purchase fewer products than they did in the past, or alter their purchasing patterns in some other way, particularly because: • a significant portion of our sales are made on a purchase order basis, which allows our customers to cancel, change or delay product purchase commitments with relatively short notice to us; • customers may purchase similar products from our competitors; • customers may discontinue sales or lose market share in the markets for which they purchase our products; • customers, particularly in jurisdictions such as China that may be subject to trade restrictions or tariffs, may develop their own solutions or acquire fully developed solutions from third-parties; or 16 • customers may be subject to severe business disruptions, including, but not limited to, those driven by recessions, financial instability, actual or threatened public health emergencies, such as the COVID-19 pandemic, other global or regional macroeconomic developments, or natural disasters.
We are subject to laws and regulations worldwide, which may differ among jurisdictions, affecting our operations in areas including, but not limited to: intellectual property ownership and infringement; tax; import and export requirements; anti-corruption; foreign exchange controls and cash repatriation restrictions; conflict minerals; data privacy requirements; competition; advertising; employment; product regulations; environment, health and safety requirements; and consumer laws.
We are subject to laws and regulations worldwide, which may differ among jurisdictions, affecting our operations in areas including, but not limited to: intellectual property ownership and infringement; tax; import and export requirements; anti-corruption; foreign exchange controls and cash repatriation restrictions; conflict minerals; data privacy requirements; competition; advertising; employment; product regulations; environment, health and safety requirements; securities registration laws; and consumer laws.
Further, in the event the directors and officers are ultimately determined not to be entitled to indemnification, we may not be able to recover any amounts we previously advanced to them.
Further, in the event such directors and officers are ultimately determined not to be entitled to indemnification, we may not be able to recover any amounts we previously advanced to them.
For example, a substantial amount of our revenue is derived from products manufactured in Taiwan and as a result, disruptions to business in Taiwan, whether political, military or natural disasters will adversely impact our business. In addition, many of our customers are located outside of the United States, primarily in Asia, which further exposes us to foreign risks.
For example, a substantial amount of our revenue is derived from products manufactured in Taiwan and as a result, disruptions to business in Taiwan, whether political, military, natural disasters or other events will adversely impact our business. In addition, many of our customers are located outside of the United States, primarily in Asia, which further exposes us to foreign risks.
In addition to operational and customer impacts, the COVID-19 pandemic has had, and is expected to continue to have, a significant impact on the economies and financial markets of many countries including an economic downturn, which has affected and may in the future affect demand for our products and impact our operating results in both the near and long term.
In addition to operational and customer impacts, the COVID-19 pandemic has had, and is expected to continue to have, (and future pandemics are expected to have) a significant impact on the economies and financial markets of many countries including an economic downturn, which has affected and may in the future affect demand for our products and impact our operating results in both the near and long term.
The costs of complying with these laws (including the costs of any investigations, auditing and monitoring) could adversely affect our current or future business. 30 Our product or manufacturing standards could also be impacted by new or revised environmental rules and regulations or other social initiatives. For example, a significant portion of our revenues come from international sales.
The costs of complying with these laws (including the costs of any investigations, auditing and monitoring) could adversely affect our current or future business. 32 Our product or manufacturing standards could also be impacted by new or revised environmental rules and regulations or other social initiatives. For example, a significant portion of our revenues come from international sales.
If we fail to protect these intellectual property rights, competitors could sell products based on technology that we have developed, which could harm our competitive position and decrease our revenue. 29 We rely on a combination of patents, copyrights, trademarks, trade secrets, contractual provisions, confidentiality agreements, licenses and other methods, to protect our proprietary technologies.
If we fail to protect these intellectual property rights, competitors could sell products based on technology that we have developed, which could harm our competitive position and decrease our revenue. 31 We rely on a combination of patents, copyrights, trademarks, trade secrets, contractual provisions, confidentiality agreements, licenses and other methods, to protect our proprietary technologies.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH THE RAPID GROWTH OF THE COMPANY AND WITH OUR STRATEGIC TRANSACTIONS We may not be able to scale our business quickly enough to meet our customers’ needs or in an efficient manner, which could harm our operating results. Over the last few years, the Company has rapidly increased in size.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH THE RAPID GROWTH OF THE COMPANY AND WITH OUR STRATEGIC TRANSACTIONS We may not be able to scale our business quickly enough to meet our customers’ needs or in an efficient manner, which could harm our operating results. Over the last few years, we have rapidly increased in size.
If our patents do not adequately protect our technology, our competitors may be able to offer products similar to ours, which would adversely impact our business and results of operations. We have implemented security systems with the intent of maintaining the physical security of our facilities and protecting our confidential information including our intellectual property.
If our patents do not adequately protect our technology, our competitors may be able to offer products similar to ours, which would adversely impact our business and results of operations. In addition, we have implemented security systems with the intent of maintaining the physical security of our facilities and protecting our confidential information including our intellectual property.
Please see “Note 11 - Commitments and Contingencies” of our Notes to the Consolidated Financial Statements set forth in Part I, Item 1 of this Annual Report on Form 10-K for a more detailed description of any material litigation matters in which we may be currently engaged.
Please see “Note 6 – Commitments and Contingencies” of our Notes to the Consolidated Financial Statements set forth in Part I, Item 1 of this Annual Report on Form 10-K for a more detailed description of any material litigation matters in which we may be currently engaged.
Because of increasing focus by government taxing authorities on multinational companies, the tax laws of certain countries in which we do business could change on a prospective or retroactive basis, and any such changes could increase our liabilities for taxes, interest and penalties, and could materially impact our financial results, including our earnings and cash flow. 27 In addition, in prior years, we entered into incentive agreements in certain foreign jurisdictions that provide for reduced tax rates in such jurisdictions if certain criteria are met.
Because of increasing focus by government taxing authorities on multinational companies, the tax laws of certain countries in which we do business could change on a prospective or retroactive basis, and any such changes could increase our liabilities for taxes, interest and penalties, and could materially adversely impact our financial results, including our earnings and cash flow. 29 In addition, in prior years, we entered into incentive agreements in certain foreign jurisdictions that provide for reduced tax rates in such jurisdictions if certain criteria are met.
The Organization for Economic Cooperation and Development (the “OECD”) has been working on a Base Erosion and Profit Sharing Project, and since 2015 has been issuing guidelines and proposals with respect to various aspects of the existing framework under which our tax obligations are determined in the countries in which we do business.
The Organization for Economic Cooperation and Development (the “OECD”) has been working on a Base Erosion and Profit Shifting Project, and since 2015 has been issuing guidelines and proposals with respect to various aspects of the existing framework under which our tax obligations are determined in the countries in which we do business.
Immaterial data breaches, losses or other unauthorized access to or releases of confidential information have in the past occurred with third parties and material data breaches, losses or other unauthorized access to or releases of confidential information may in the future occur in connection with third parties and could materially adversely affect the Company’s reputation, financial condition and operating results and could result in liability or penalties under data privacy laws.
Immaterial data breaches, losses or other unauthorized access to or releases of confidential information have in the past occurred with third parties and material data breaches, losses or other unauthorized access to or releases of confidential information may in the future occur in connection with third parties and could materially adversely affect our reputation, financial condition and operating results and could result in liability or penalties under data privacy laws.
If our insurance coverage is insufficient to protect us against unforeseen catastrophic losses, any uncovered losses could adversely affect our financial condition and results of operations. 37 If any of our non-U.S. based subsidiaries were classified as a passive foreign investment company, there would be adverse tax consequences.
If our insurance coverage is insufficient to protect us against unforeseen losses, any uncovered losses could adversely affect our financial condition and results of operations. If any of our non-U.S. based subsidiaries were classified as a passive foreign investment company, there would be adverse tax consequences.
In addition, we may be less likely to negotiate as favorable terms with larger customers whether those customers resulted from customer consolidation, merger integrations or other reasons, and any such less favorable terms could harm our business and our results of operations. We are subject to order and shipment uncertainties.
In addition, we may be unable to negotiate as favorable terms with larger customers whether those customers resulted from customer consolidation, merger integrations or other reasons, and any such less favorable terms could harm our business and our results of operations. We are subject to order and shipment uncertainties.
If we are unsuccessful or delayed in qualifying these products with a customer, sales of the products to the customer may be precluded or delayed, which may impede our growth and cause our business to suffer. 20 Costs related to defective products could have a material adverse effect on us.
If we are unsuccessful or delayed in qualifying these products with a customer, sales of the products to the customer may be precluded or delayed, which may impede our growth and cause our business to suffer. 25 Costs related to defective products could have a material adverse effect on us.
The National Industrial Security Program requires that a corporation maintaining a facility security clearance be effectively insulated from foreign ownership, control or influence (“FOCI”). Because we were organized in Bermuda at the time of the Avera acquisition, we entered into agreements with the U.S.
The National Industrial Security Program requires that a corporation maintaining a facility security clearance be effectively insulated from foreign ownership, control or influence (“FOCI”). Because we were organized in Bermuda at the time of this acquisition, we entered into agreements with the U.S.
In future periods, our stock price could decline if, amongst other factors, our revenue or operating results are below our estimates or the estimates or expectations of securities analysts and investors. Our stock is traded on the Nasdaq Global Select Market under the ticker symbol “MRVL”.
In future periods, our stock price could decline if, among other factors, our revenue or operating results are below our estimates or the estimates or expectations of securities analysts and investors. Our stock is traded on the Nasdaq Global Select Market under the ticker symbol “MRVL”.
In future periods, local tax authorities may challenge the Company’s valuations of these assets, which could reduce our expected tax benefits from these transactions. Our profitability and effective tax rate could be impacted by unexpected changes to our statutory income tax rates or income tax liabilities.
In future periods, local tax authorities may challenge our valuations of these assets, which could reduce our expected tax benefits from these transactions. Our profitability and effective tax rate could be impacted by unexpected changes to our statutory income tax rates or income tax liabilities.
Even after successful qualification and sales of a product to a customer, a subsequent revision in our third party contractors’ manufacturing process or our selection of a new supplier may require a new qualification process with our customers, which may result in delays and in our holding excess or obsolete inventory.
Even after successful qualification and sales of a product to a customer, a subsequent revision in our third party manufacturing partners’ process or our selection of a new supplier may require a new qualification process with our customers, which may result in delays and in our holding excess or obsolete inventory.
Future payment of a regular quarterly cash dividend on our common stock and future stock repurchases will be subject to, among other things: the best interests of our Company and our stockholders; our results of operations, cash balances and future cash requirements; financial condition; developments in ongoing litigation; statutory requirements under Delaware law; securities laws and regulations, market conditions; and other factors that our Board of Directors may deem relevant.
Future payment of a regular quarterly cash dividend on our common stock and future stock repurchases are subject to, among other things: the best interests of the Company and our stockholders; our results of operations, cash balances and future cash requirements; financial condition; developments in ongoing litigation; statutory requirements under Delaware law; securities laws and regulations, market conditions; and other factors that our Board of Directors may deem relevant.
In the past, we have reduced the average selling prices of our products in anticipation of future competitive pricing pressures, new product introductions by us or by our competitors and other factors. We expect that we will continue to have to reduce prices of existing products in the future.
In the past, we have reduced the average selling prices of our products in anticipation of future competitive pricing pressures, new product introductions by us or by our competitors and other factors. We expect to continue to have to reduce prices of existing products in the future.
The Company has not experienced a material security breach in the last three years, and as a result, we have not incurred any net expenses from such a breach. We have not been penalized or paid any amount under an information security breach settlement over the last three years.
We have not experienced a material information security breach in the last three years, and as a result, we have not incurred any net expenses from such a breach. We have not been penalized or paid any amount under an information security breach settlement over the last three years.
Our compliance programs rely in part on compliance by our suppliers, vendors and distributors. To the extent such third parties don't comply with these obligations our business, operations and reputation may be adversely impacted.
Our compliance programs rely in part on compliance by our manufacturing partners, suppliers, vendors and distributors. To the extent such third parties don’t comply with these obligations our business, operations and reputation may be adversely impacted.
We are currently, and have been in the past, named as a party to several lawsuits, government inquiries or investigations and other legal proceedings (referred to as “litigation”), and we may be named in additional ones in the future.
We are currently, and have been in the past, named as a party to several lawsuits, government inquiries or investigations and other legal proceedings (referred to as “litigation”), and we may be named in additional litigation in the future.
Our inability to attract and retain qualified personnel, including hardware and software engineers and sales and marketing personnel, could delay the development and introduction of, impact our ability to fulfill commitments to customers for, and harm our ability to sell, our products.
Our inability to attract and retain qualified personnel, including executive officers, hardware and software engineers and sales and marketing personnel, could delay the development and introduction of, impact our ability to fulfill commitments to customers for, and harm our ability to sell, our products.
Our use of cash to fund our current and future acquisitions has reduced our liquidity and may (i) limit our flexibility in responding to other business opportunities and (ii) increase our vulnerability to adverse economic and industry conditions.
Our use of cash to fund our acquisitions has reduced our liquidity and may (i) limit our flexibility in responding to other business opportunities and (ii) increase our vulnerability to adverse economic and industry conditions.
In addition, as a result of the pandemic and our recent move to a hybrid work environment, we expect to face challenges in retention of personnel who prefer to only work from home. 36 There can be no assurance that we will continue to declare cash dividends or effect stock repurchases in any particular amount or at all, and statutory requirements may require us to defer payment of declared dividends or suspend stock repurchases.
In addition, as a result of our recent move to a hybrid work environment, we expect to face challenges in retention of personnel who prefer to only work from home. 37 There can be no assurance that we will continue to declare cash dividends or effect stock repurchases in any particular amount or at all, and statutory requirements may require us to defer payment of declared dividends or suspend stock repurchases.
It is possible that their customers that are larger and better financed than we are or that have long-term agreements with our main foundries may induce them to reallocate capacity to those customers. Most of our manufacturing partners may reallocate capacity to their customers offering them a better margin or rate of return than provided by the Company.
It is possible that their customers that are larger and better financed than we are or that have long-term agreements with our main foundries may induce them to reallocate capacity to those customers. Most of our manufacturing partners may reallocate capacity to their customers offering them a better margin or rate of return than provided by us.
On the closing date of the Inphi acquisition, the entire principal amount was funded and incurred in respect of the $1.75 billion senior unsecured term loan facility, comprised of a $875.0 million 3-year term loan tranche (the “3-Year Tranche Loan”) and a $875.0 million 5-year term loan tranche (the “5-Year Tranche Loan,” and collectively with the 3-Year Tranche Loan, the “2020 Term Loans”).
On the closing date of the Inphi acquisition, the entire principal amount was funded and incurred in respect of the $1.75 billion senior unsecured term loan facility, comprised of a $875.0 million 3-year term loan tranche (the “3-Year Tranche Loan”) and a $875.0 million 5-year term loan tranche (the “5-Year Tranche Loan,” and collectively with the 3-Year Tranche Loan, the “2024 and 2026 Term Loans”).
Our insurance policies may not be adequate to fully offset losses from covered incidents, and we do not have coverage for certain losses. For example, there is very limited coverage available with respect to the services provided by our third-party manufacturing partners and assembly and test subcontractors.
Our insurance policies may not be adequate to fully offset losses from covered incidents, and we do not have coverage for certain losses. For example, there is very limited coverage available with respect to the services provided by our third-party manufacturing partners and assembly, testing and packaging subcontractors.
(collectively, the “MTG Senior Notes”) for $433.9 million aggregate principal amount of 2023 Senior Notes and $479.5 million aggregate principal amount of 2028 Senior Notes issued by the Company (the “MTI Senior Notes”) (together with the Senior Notes, the “Notes”).
(collectively, the “MTG Senior Notes”) for $433.9 million aggregate principal amount of 2023 Senior Notes and $479.5 million aggregate principal amount of 2028 Senior Notes issued by us (the “MTI Senior Notes”) (together with the Senior Notes, the “Notes”).
In addition, in prior periods, the Company transferred certain intellectual property to a related entity in Singapore. The impact to the Company was based on our determination of the fair value of this property, which required management to make significant estimates and to apply complex tax regulations in multiple jurisdictions.
In addition, in prior periods, we transferred certain intellectual property to a related entity in Singapore. The impact to us was based on our determination of the fair value of this property, which required management to make significant estimates and to apply complex tax regulations in multiple jurisdictions.
In addition, as a result of our acquisitions and related integration activities, our current and prospective employees may experience uncertainty about their futures that may impair our ability to retain, recruit or motivate key management, engineering, technical and other personnel.
In addition, as a result of our past and any future acquisitions and related integration activities, our current and prospective employees may experience uncertainty about their futures that may impair our ability to retain, recruit or motivate key management, engineering, technical and other personnel.
In addition, we have in the past and may in the future be the target of email phishing attacks that attempt to acquire personal information or company assets. We have implemented processes for systems under our control intended to mitigate risks; however, we can provide no guarantee that those risk mitigation measures will be effective.
In addition, we have in the past and may in the future be the target of email phishing attacks that attempt to acquire personal information or Company assets. We have implemented processes for systems under our control intended to mitigate risks; however, we cannot guarantee that those risk mitigation measures will be effective.
Most of our products are manufactured by our manufacturing partners outside of the United States. Most of our current qualified integrated circuit foundries are located in the same region within Taiwan. In addition, our primary assembly and test subcontractors are located in the Pacific Rim region.
Most of our products are manufactured by our manufacturing partners outside of the United States. Most of our current qualified integrated circuit foundries are located in the same region within Taiwan. In addition, our primary assembly, testing and packaging subcontractors are located in the Pacific Rim region.
Our buildings in Santa Clara, California and Shanghai, China subject us to the risks of owning real property, which include, but are not limited to: • the possibility of environmental contamination and the costs associated with remediating any environmental problems; • adverse changes in the value of these properties due to interest rate changes, changes in the neighborhood in which the property is located, or other factors; • the possible need for structural improvements in order to comply with zoning, seismic and other legal or regulatory requirements; • the potential disruption of our business and operations arising from or connected with a relocation due to moving to or renovating the facility; • increased cash commitments for improvements to the buildings or the property, or both; • increased operating expenses for the buildings or the property, or both; • possible disputes with third parties related to the buildings or the property, or both; • failure to achieve expected cost savings due to extended non-occupancy of a vacated property intended to be leased; and • the risk of financial loss in excess of amounts covered by insurance, or uninsured risks, such as the loss caused by damage to the buildings as a result of earthquakes, floods and/or other natural disasters.
Our buildings in Santa Clara, California and Shanghai, China subject us to the risks of owning real property, which include, but are not limited to: • the possibility of environmental contamination and the costs associated with remediating any environmental problems; • adverse changes in the value of these properties due to economic conditions, the movement by many companies to a full time work from home or a hybrid work environment, interest rate changes, changes in the neighborhood in which the property is located, or other factors; • the possible need for structural improvements in order to comply with zoning, seismic and other legal or regulatory requirements; • the potential disruption of our business and operations arising from or connected with a relocation due to moving or to renovating the facility; • increased cash commitments for improvements to the buildings or the property, or both; • increased operating expenses for the buildings or the property, or both; • possible disputes with third parties related to the buildings or the property, or both; • failure to achieve expected cost savings due to extended non-occupancy of a vacated property intended to be leased; and • the risk of financial loss in excess of amounts covered by insurance, or uninsured risks, such as the loss caused by damage to the buildings as a result of earthquakes, floods and/or other natural disasters.
In addition, there has been a trend toward customer consolidation in the semiconductor industry through business combinations, including mergers, asset acquisitions and strategic partnerships (for example, Western Digital acquired SanDisk in 2017, and Toshiba Corporation sold control of a portion of its semiconductor business in 2018).
In addition, there has been a trend toward customer consolidation in the semiconductor industry through business combinations, including mergers, asset acquisitions and strategic partnerships (for example, Western Digital acquired SanDisk in 2017, Toshiba Corporation sold control of a portion of its semiconductor business in 2018, and Cisco acquired Acacia Communications in 2021).
The applicable margins with respect to the loans incurred under the Credit Agreements will vary based on the applicable public ratings assigned to the senior unsecured long-term indebtedness by Moody's Investors Service, Inc., Standard & Poor's Financial Services LLC, Fitch’s and any successor to each such rating agency business.
The applicable margins with respect to the loans incurred under the Credit Agreements will vary based on the applicable public ratings assigned to the indebtedness by Moody's Investors Service, Inc., Standard & Poor's Financial Services LLC, Fitch’s and any successor to each such rating agency business.
In addition, a foundry or supplier could become unavailable to us if it is acquired by a competitor or a large company that may change the scope of the offerings. For example, Intel Corporation announced in February 2022 of its intent to acquire Tower Semiconductor.
A foundry, supplier or other manufacturing partner could become unavailable to us if it is acquired by a competitor or a large company that may change the scope of the offerings. For example, Intel Corporation announced in February 2022 of its intent to acquire Tower Semiconductor.
See also, “ We rely on our manufacturing partners for the manufacture, assembly and testing of our products, and the failure of any of these third-party vendors to deliver products or otherwise perform as requested could damage our relationships with our customers, decrease our sales and limit our ability to grow our business ” for additional information on the impacts of supply chain cross-dependencies on our business.
See also, “We rely on our manufacturing partners for the manufacture, assembly, testing and packaging of our products, and the failure of any of these third-party vendors to deliver products or otherwise perform as requested could damage our relationships with our customers, decrease our sales and limit our ability to grow our business” for additional information on the impacts of supply chain cross-dependencies on our business.
Since the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures. The Company’s business also requires it to share confidential information with suppliers and other third parties.
Since the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures. 36 Our business also requires it to share confidential information with manufacturing partners, suppliers and other third parties.
See also, “ Costs related to defective products could have a material adverse effect on us. ” Because we rely on outside manufacturing partners, we may have a reduced ability to directly control product delivery schedules and quality assurance, which could result in product shortages or quality assurance problems that could delay shipments or increase costs.
See also, “Costs related to defective products could have a material adverse effect on us.” Because we rely on outside manufacturing partners, we have a reduced ability to directly control product delivery schedules and quality assurance, which has in the past and may in the future result in product shortages or quality assurance problems that delay shipments or increase costs.
Depending on the magnitude of such effects on our manufacturing, assembling, and testing activities or the operations of our suppliers, third-party distributors, sub-contractors and customers, our supply chain, manufacturing and product shipments will be delayed, which could adversely affect our business, operations and customer relationships.
Depending on the magnitude of such effects on our manufacturing, assembling, testing, and packaging activities or the operations of our manufacturing partners, suppliers, distributors, sub-contractors and customers, our supply chain, manufacturing and product shipments will be delayed, which could adversely affect our business, operations and customer relationships.
See also, " Research and Development" under Results of Operations. If we are unable to develop and introduce new and enhanced products that achieve market acceptance in a timely and cost-effective manner, our results of operations and competitive position will be harmed.
See also, “Research and Development” under Results of Operations. If we are unable to develop and introduce new and enhanced products that achieve market acceptance in a timely and cost-effective manner, our results of operations and competitive position will be harmed.
Actual or perceived shortcomings with respect to our ESG initiatives and reporting can impact our ability to hire and retain employees, increase our customer base, or attract and retain certain types of investors. In addition, these parties are increasing focused on specific disclosures and frameworks related to ESG matters.
Actual or perceived shortcomings with respect to our ESG initiatives, including our diversity initiatives, and reporting can impact our ability to hire and retain employees, increase our customer base, reelect our board of directors, or attract and retain certain types of investors. In addition, these parties are increasing focused on specific disclosures and frameworks related to ESG matters.
We may be unable to generate the cash flow to service our debt obligations. We may not be able to generate sufficient cash flow to enable us to service our indebtedness, including the Notes, or to make anticipated capital expenditures.
We may not be able to generate sufficient cash flow to enable us to service our indebtedness, including the Notes, or to make anticipated capital expenditures.
For example, we were impacted by COVID outbreaks in Asia in the fourth quarter of fiscal 2022 that resulted in closed factories, clogged ports and a shortage of workers as officials imposed lockdowns and mass testing requirements. In the case of such an event, our revenue, cost of goods sold and results of operations may be negatively impacted.
For example, we were impacted by COVID outbreaks in Asia in the first half of fiscal 2023 that resulted in closed factories, clogged ports and a shortage of workers as officials imposed lockdowns and mass testing requirements. In the case of such an event, our revenue, cost of goods sold and results of operations may be negatively impacted.
In addition, on May 4, 2021, the Company completed a private exchange offer where we exchanged notes issued by Marvell Technology Group Ltd.
In addition, on May 4, 2021, we completed a private exchange offer where we exchanged most of the notes issued by Marvell Technology Group Ltd.
We are transitioning our product offering from standard server processors to the broad server market to focus only on customized server processors for a few targeted customers. This change in strategy required the Company to assess whether the carrying value of the associated assets would be recoverable.
We transitioned our product offering from standard server processors to the broad server market to focus only on customized server processors for a few targeted customers. This change in strategy required us to assess whether the carrying value of the associated assets would be recoverable.
We receive a significant amount of our revenue from a limited number of customers. For example, during fiscal 2022, there was one distributor, whose revenue as a percentage of our net revenue was 10% or greater of total net revenues.
We receive a significant amount of our revenue from a limited number of customers. For example, during fiscal 2023, we had one distributor, whose revenue as a percentage of our net revenue was 10% or greater of total net revenues.
Sales shipped to customers with operations in Asia represented approximately 78% and 80% of our net revenue in fiscal 2022 and fiscal 2021, respectively. We also have substantial operations outside of the United States.
Sales shipped to customers with operations in Asia represented approximately 75% and 78% of our net revenue in fiscal 2023 and fiscal 2022, respectively. We also have substantial operations outside of the United States.
Our third-party manufacturers, suppliers, third-party distributors, sub-contractors and customers have been, and are expected to continue to be, disrupted by worker absenteeism, quarantines and restrictions on their employees’ ability to work; office and factory closures; disruptions to ports and other shipping infrastructure; border closures; and other travel or health-related restrictions.
Our third-party manufacturing partners, suppliers, distributors, sub-contractors and customers have been, and may continue to be, disrupted by worker absenteeism, quarantines and restrictions on their employees’ ability to work; office and factory closures; disruptions to ports and other shipping infrastructure; border closures; and other travel or health-related restrictions.
As of January 29, 2022, there was $564.5 million remaining available for future stock repurchases under the authorization. Our indemnification obligations and limitations of our director and officer liability insurance may have a material adverse effect on our financial condition, results of operations and cash flows.
As of January 28, 2023, there was $449.5 million remaining available for future stock repurchases under the authorization. Our indemnification obligations and limitations of our director and officer liability insurance may have a material adverse effect on our financial condition, results of operations and cash flows.
Consequently, we may not fully realize our expectations for custom or semi-custom product revenue and our operating results may be adversely affected. Additionally, failure of our customers to agree to pay for NRE (non-recurring engineering) costs or failure to pay enough to cover the costs we incur in connection with NREs may harm our financial results.
Consequently, we may not fully realize our expectations for custom or semi-custom product revenue and our operating results may be adversely affected. 24 Additionally, failure of our customers to agree to pay for NRE (non-recurring engineering) costs or failure to pay enough to cover the costs we incur in connection with NREs, or non-payment of previously agreed NRE costs due to us, can harm our financial results.
In response, we adopted a hybrid work policy for most of our U.S. based employees, where employees may split their time between home and the office. However, certain types of activities such as new product innovation, critical business decision making, brainstorming sessions, providing sensitive employee feedback, and onboarding new employees may be less effective in a hybrid work environment.
We have adopted a hybrid work policy for our employees, where employees have the option to split their time between home and the office. However, certain types of activities such as new product innovation, critical business decision making, brainstorming sessions, providing sensitive employee feedback, and onboarding new employees may be less effective in a hybrid work environment.
Because of the geographic concentration of these suppliers, we are exposed to the risk that their operations may be disrupted by regional disasters including, for example, earthquakes (particularly in Taiwan and elsewhere in the Pacific Rim close to fault lines), tsunamis or typhoons, or by actual or threatened public health emergencies such as the COVID-19 pandemic, or by political, social or economic instability.
Because of the geographic concentration of these suppliers, we are exposed to the risk that their operations may be disrupted by regional events including droughts, earthquakes (particularly in Taiwan and elsewhere in the Pacific Rim close to fault lines), tsunamis or typhoons, severe storms, power outages, or by actual or threatened public health emergencies such as the COVID-19 pandemic, or by political, social or economic instability.
Supplies for such commodities may from time to time become restricted, or general market factors and conditions may affect pricing of such commodities (such as inflation or supply chain constraints). 18 We may experience increased actual and opportunity costs as a result of our transition to smaller geometry process technologies.
Supplies for such commodities have from time to time become restricted, or general market factors and conditions have in the past affected and may in the future affect pricing of such commodities (such as inflation or supply chain constraints). We may experience increased actual and opportunity costs as a result of our transition to smaller geometry process technologies.
The prior U.S. presidential administration instituted or proposed changes in trade policies that included the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S. and other countries where we conduct our business.
The U.S. government has in the past, and may in the future, instituted or proposed changes in trade policies that included the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S. and other countries where we conduct our business.
We license technology from Arm Limited that is included in a majority of our products and would be adversely impacted if the pricing for, or availability of, the relevant technology is changed in an adverse manner as a result of similar future transactions.
In addition, we license technology from Arm Limited that is included in a majority of our products and would be adversely impacted if the pricing for, or availability of, the relevant technology is changed in an adverse manner.
For example, supply shortages in the semiconductor industry of multi-layer complex substrates, IC packaging capacity and fab constraints have resulted in increased lead times, inability to meet demand, and increased costs. Any increase in the price of components used in our products will adversely affect our gross margins.
For example, during the first few quarters of fiscal year 2023 supply shortages in the semiconductor industry of multi-layer complex substrates, IC packaging capacity and fab constraints resulted in increased lead times, inability to meet demand, and increased costs. Any increase in the price of components used in our products will adversely affect our gross margins.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table presents the approximate square footage of our significant owned and leased facilities as of January 29, 2022: (Square Feet) Locations Primary Use Owned Facilities Leased Facilities (1) United States Research and design, sales and marketing, administration and operations 983,000 480,000 India Research and design — 266,000 Israel Research and design — 220,000 Singapore Operations, and research and design — 68,000 Canada Research and design — 57,000 Taiwan Research and design — 53,000 China Research and design, and sales and marketing 116,000 42,000 Total 1,099,000 1,186,000 (1) Lease terms expire in various years from 2022 through 2032 provided, however, that we have the option to extend certain leases past the current lease term.
Biggest changeProperties The following table presents the approximate square footage of our significant owned and leased facilities as of January 28, 2023: (Square Feet) Locations Primary Use Owned Facilities Leased Facilities (1) United States Research and design, sales and marketing, administration and operations 983,000 692,000 India Research and design — 263,000 Israel Research and design — 220,000 Taiwan Research and design — 98,000 Singapore Operations, and research and design — 60,000 Canada Research and design — 56,000 China Research and design, and sales and marketing 116,000 46,000 Total 1,099,000 1,435,000 (1) Lease terms expire in various years from 2023 through 2032; provided, however, that we have the option to extend certain leases past the current lease term.
We have ceased-use lease facilities and subleased facilities of approximately 512,000 square feet in the United States that are excluded from the table above. We also lease smaller facilities in various international locations, which are occupied by administrative, sales, design and field application personnel.
We have ceased-use lease facilities and subleased facilities of approximately 283,000 square feet in the United States that are excluded from the table above. We also lease smaller facilities in various international locations, which are occupied by administrative, sales, design and field application personnel.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information set forth under “Note 11 - Commitments and Contingencies” in our Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference.
Biggest changeItem 3. Legal Proceedings The information set forth under “Note 6 – Commitments and Contingencies” in our Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference.
For a discussion of certain risks associated with legal proceedings, please see Part I, Item 1A, “Risk Factors” above. Item 4. Mine Safety Disclosures Not Applicable. 38 PART II
For a discussion of certain risks associated with legal proceedings, please see Part I, Item 1A, “Risk Factors” above. Item 4. Mine Safety Disclosures Not Applicable. 39 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The stock repurchase program was temporarily suspended in late March 2020 to preserve cash during the COVID-19 pandemic. We are focusing on reducing our debt and de-levering our balance sheet. As a result, we did not repurchase any shares of stock during the fiscal year ended January 29, 2022.
Biggest changeIssuer Purchases of Equity Securities We resumed our stock repurchase program in the first quarter of fiscal 2023, which had been temporarily suspended in fiscal 2021 to preserve cash during the COVID-19 pandemic. We did not purchase any shares of our common stock for the three months ended January 28, 2023.
Our stock repurchase program is subject to market conditions, legal restrictions and regulations, and other factors, and does not obligate the Company to repurchase any dollar amount or number of shares of its common stock and the repurchase program may be extended, modified, suspended or discontinued at any time. Item 6. Reserved 40
Our stock repurchase program is subject to market conditions, legal restrictions and regulations, and other factors, and does not obligate the Company to repurchase any dollar amount or number of shares of its common stock and the repurchase program may be extended, modified, suspended or discontinued at any time. Item 6. Reserved 41
As a result, we paid total cash dividends of $191.0 million in fiscal 2022, $160.6 million in fiscal 2021, and $159.6 million in fiscal 2020.
As a result, we paid total cash dividends of $204.4 million in fiscal 2023, $191.0 million in fiscal 2022, and $160.6 million in fiscal 2021.
The graph compares a $100 investment on January 28, 2017 in our common stock with a $100 investment on January 28, 2017 in each index and assumes that any dividends were reinvested.
The graph compares a $100 investment on February 3, 2018 in our common stock with a $100 investment on February 3, 2018 in each index and assumes that any dividends were reinvested.
The graph below compares the cumulative total stockholder return of our common stock with the cumulative total return of the S&P 500 Index and the Philadelphia Semiconductor Index since January 28, 2017 through January 29, 2022.
The graph below compares the cumulative total stockholder return of our common stock with the cumulative total return of the S&P 500 Index and the Philadelphia Semiconductor Index since February 3, 2018 through January 28, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares are traded on the Nasdaq Global Select Market under the symbol “MRVL.” Shares of Marvell Technology Group Ltd. (our prior parent company) began trading under the MRVL symbol on June 27, 2000, upon completion of an initial public offering.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our shares of common stock are traded on the Nasdaq Global Select Market under the symbol “MRVL.” Shares of Marvell Technology Group Ltd.
Recent Sales of Unregistered Securities Sales of unregistered equity securities made during fiscal 2022 were disclosed on our Quarterly Reports on Form 10-Q for the quarters ended May 1, 2021; July 31, 2021; and October 30, 2021. There were no sales of unregistered equity securities in the quarter ended January 29, 2022.
Recent Sales of Unregistered Securities Sales of unregistered equity securities made during fiscal 2022 were disclosed on our Quarterly Reports on Form 10-Q for the quarters ended May 1, 2021; July 31, 2021; and October 30, 2021. In fiscal 2023, on December 2, 2022, the Company acquired all the equity interests of a private company for cash and stock.
Stockholder returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns. 1/28/2017 2/3/2018 2/2/2019 2/1/2020 1/30/2021 1/29/2022 Marvell Technology, Inc.** 100.00 150.67 125.28 165.27 356.23 460.88 S&P 500 100.00 122.83 122.76 149.23 174.97 211.72 PHLX Semiconductor 100.00 139.26 138.65 196.54 322.28 373.10 **Information prior to April 20, 2021 is for Marvell Technology Group, Ltd. 39 Dividends Our Board of Directors declared quarterly cash dividends of $0.06 per share payable to holders of our common stock in each quarter of fiscal 2022, 2021 and 2020.
Stockholder returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns. 2/3/2018 2/2/2019 2/1/2020 1/30/2021 1/29/2022 1/28/2023 Marvell Technology, Inc.** 100.00 83.15 109.69 236.42 305.88 205.15 S&P 500 100.00 99.94 121.49 142.45 172.36 160.94 PHLX Semiconductor 100.00 99.56 141.14 231.43 267.92 242.36 **Information prior to April 20, 2021 is for Marvell Technology Group, Ltd. 40 Dividends Our Board of Directors declared quarterly cash dividends of $0.06 per share payable to holders of our common stock in each quarter of fiscal 2023, 2022 and 2021.
As of April 20, 2021, shares of Marvell Technology, Inc began trading under the symbol MRVL. As of March 3, 2022, the approximate number of record holders of our common stock was 603 (not including beneficial owners of stock held in street name).
As of March 2, 2023, the approximate number of record holders of our common stock was 590 (not including beneficial owners of stock held in street name).
We will continue to evaluate business conditions to decide when to restart the stock repurchase program. Although stock repurchases are temporarily suspended, we have $564.5 million of repurchase authority remaining under our current stock repurchase program.
We have $449.5 million of repurchase authority remaining under our current share repurchase program.
Removed
From August 2010 when our Board of Directors initially authorized a stock repurchase program through January 29, 2022, a total of 308.1 million shares have been repurchased under the Company’s stock repurchase program for a total $4.3 billion in cash and $564.5 million remains available for future stock repurchases.
Added
(our prior parent company) began trading under the MRVL symbol on June 27, 2000, upon completion of an initial public offering. As of April 20, 2021, shares of Marvell Technology, Inc began trading under the symbol MRVL.
Added
Pursuant to this transaction, 439,499 shares of Marvell common stock were issued, which shares are subject to forfeiture in some circumstances. The shares of Marvell common stock were issued in a private placement pursuant to Rule 4(a)(2) of the Securities Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+29 added−27 removed66 unchanged
Biggest changeCost of Goods Sold and Gross Profit Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentages) Cost of goods sold $ 2,398,158 $ 1,480,550 62.0 % % of net revenue 53.7 % 49.9 % Gross profit $ 2,064,225 $ 1,488,350 38.7 % % of net revenue 46.3 % 50.1 % Cost of goods sold as a percentage of net revenue increased for fiscal 2022 compared to fiscal 2021 primarily due to increased costs associated with the Inphi and Innovium acquisitions including amortization of inventory fair value adjustment and amortization of acquired intangible assets.
Biggest changeIn addition, the overall increase in net revenue was also driven by an increase in demand for our products and the year-over-year impact of acquisitions made in fiscal 2022, with both factors contributing to higher sales of products and higher unit shipments. 47 Cost of Goods Sold and Gross Profit Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentages) Cost of goods sold $ 2,932.1 $ 2,398.2 22.3 % % of net revenue 49.5 % 53.7 % Gross profit $ 2,987.5 $ 2,064.2 44.7 % % of net revenue 50.5 % 46.3 % Cost of goods sold as a percentage of net revenue decreased for fiscal 2023 compared to fiscal 2022 primarily due to lower amortization of inventory fair value adjustment and acquired intangible assets as a percentage of net revenue.
Overview We are a leading supplier of infrastructure semiconductor solutions, spanning the data center core to network edge. We are a fabless semiconductor supplier of high-performance standard and semi-custom products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality.
Overview We are a leading supplier of data infrastructure semiconductor solutions, spanning the data center core to network edge. We are a fabless semiconductor supplier of high-performance standard and semi-custom products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality.
Circumstances which could trigger a review include, but are not limited to the following: • significant decreases in the market price of the asset; • significant adverse changes in the business climate or legal factors; • accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; • current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and • current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.
Circumstances which could trigger a review include, but are not limited to the following: • significant decreases in the market price of the asset; • significant adverse changes in the business climate or legal factors; • accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; • current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and 45 • current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.
This process involves estimating our actual tax exposure together with assessing temporary differences resulting from the differing treatment of certain items for tax return and financial statement purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. We recognize income taxes using an asset and liability approach.
This process involves estimating our actual tax exposure together with assessing temporary differences resulting from the differing treatment of certain items for tax return and financial statement purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. 44 We recognize income taxes using an asset and liability approach.
The warranty accrual is estimated primarily based on historical claims compared to historical revenues and assumes that we will have to replace products subject to a claim. From time to time, we become aware of specific warranty situations, and we record specific accruals to cover these exposures. Warranty expenses were not material for the periods presented. 43 Inventories .
The warranty accrual is estimated primarily based on historical claims compared to historical revenues and assumes that we will have to replace products subject to a claim. From time to time, we become aware of specific warranty situations, and we record specific accruals to cover these exposures. Warranty expenses were not material for the periods presented. Inventories .
For risks related to our global operations, see Part I, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “ We face additional risks due to the extent of our global operations since a majority of our products, and those of our customers, are manufactured and sold outside of the United States.
For risks related to our global operations, see Part I, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “ We face additional risks due to the extent of our global operations since a majority of our products, and those of many of our customers, are manufactured and sold outside of the United States.
For further information on our significant accounting policies, see “Note 2 - Significant Accounting Policies” in the Notes to Consolidated Financial Statements. Revenue Recognition. We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
For further information on our significant accounting policies, see “Note 2 – Significant Accounting Policies” in the Notes to Consolidated Financial Statements. 43 Revenue Recognition. We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
Actual results could differ from these estimates, and such differences could affect the results of operations reported in future periods. In the current macroeconomic environment affected by COVID-19, our estimates could require increased judgment and carry a higher degree of variability and volatility.
Actual results could differ from these estimates, and such differences could affect the results of operations reported in future periods. In the macroeconomic environment affected by COVID-19, our estimates could require increased judgment and carry a higher degree of variability and volatility.
Consequently, taxing authorities may impose tax assessments or judgments against us that could materially impact our tax liability and/or our effective income tax rate. 44 We are subject to income tax audits by the respective tax authorities in the jurisdictions in which we operate.
Consequently, taxing authorities may impose tax assessments or judgments against us that could materially impact our tax liability and/or our effective income tax rate. We are subject to income tax audits by the respective tax authorities in the jurisdictions in which we operate.
We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States. See “Note 14 - Income Taxes” in the Notes to the Consolidated Financial Statements for further information.
We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States. See “Note 13 – Income Taxes” in the Notes to the Consolidated Financial Statements for further information.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties, including those discussed under Part I, Item 1A, “Risk Factors.” These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements.
This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, including those discussed under Part I, Item 1A, “Risk Factors.” These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements.
In addition, see “Note 14 - Income Taxes” regarding tax related contingencies and uncertain tax positions in the Notes to the Consolidated Financial Statements. We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities.
In addition, see “Note 13 – Income Taxes” regarding tax related contingencies and uncertain tax positions in the Notes to the Consolidated Financial Statements. We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities.
Customers in China may also choose to develop indigenous solutions, as replacements for products that are subject to U.S. export controls. In addition, there may be indirect impacts to our business that we can not easily quantify such as the fact that some of our other customers' products which use our solutions may also be impacted by export restrictions.
Customers in China may also choose to develop indigenous solutions, as replacements for products that are subject to U.S. export controls. In addition, there may be indirect impacts to our business that we cannot easily quantify such as the fact that some of our other customers’ products which use our solutions may also be impacted by export restrictions.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. 45 As of the last day of the fourth quarter of fiscal 2022, we performed our annual impairment assessment for testing goodwill. A step one assessment was performed. Based on our assessment, we determined there was no goodwill impairment. Business Combinations.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. As of the last day of the fourth quarter of fiscal 2023, we performed our annual impairment assessment for testing goodwill. A step one assessment was performed. Based on our assessment, we determined there was no goodwill impairment. Business Combinations.
We expect COVID-19 to continue to impact our business and for a further discussion of the uncertainties and business risks associated with the COVID-19 pandemic, see Part I, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “ We face risks related to the COVID-19 pandemic which currently has, and may continue in the future to, significantly disrupt and adversely impact our manufacturing, research and development, operations, sales and financial results. ” We expect that the U.S. government's export restrictions on certain Chinese customers will continue to impact our revenue in fiscal year 2023.
We continue to expect lingering impacts with respect to COVID-19 on our business, for a further discussion of the uncertainties and business risks associated with the COVID-19 pandemic, see Part I, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “ We face risks related to the COVID-19 pandemic which currently has, and may continue in the future to, significantly disrupt and adversely impact our manufacturing, research and development, operations, sales and financial results. ” We expect that the U.S. government’s export restrictions on certain Chinese customers to continue to impact our revenue.
We continuously monitor the creditworthiness of our customers and distributors and believe these distributors’ sales to diverse end customers and geographies further serve to mitigate our exposure to credit risk. Most of our sales are made to customers located outside of the United States, primarily in Asia, and majority of our products are manufactured outside the United States.
We regularly monitor the creditworthiness of our customers and distributors and believe these distributors’ sales to diverse end customers and geographies further serve to mitigate our exposure to credit risk. Most of our sales are made to customers with operations located outside of the United States, primarily in Asia, and majority of our products are manufactured outside the United States.
Refer to “Note 11 - Commitments and Contingencies” in the Notes to the Consolidated Financial Statements for a discussion of this settlement.
Refer to “Note 6 – Commitments and Contingencies” in the Notes to the Consolidated Financial Statements for a discussion of this settlement.
Cash Flows from Investing Activities Net cash used in investing activities of $3.7 billion in fiscal 2022 was primarily driven by the net cash consideration for business acquisitions of $3.6 billion, purchases of property and equipment of $169.3 million and purchases of technology licenses of $17.8 million .
Net cash used in investing activities of $3.7 billion in fiscal 2022 was primarily driven by the net cash consideration for business acquisitions of $3.6 billion, purchases of property and equipment of $169.2 million and purchases of technology licenses of $17.7 million.
Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial end markets. Net revenue in fiscal 2022 was $4.5 billion and was 50% higher than net revenue of $3.0 billion in fiscal 2021.
Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial end markets. Net revenue in fiscal 2023 was $5.9 billion and was 33% higher than net revenue of $4.5 billion in fiscal 2022.
The increases were partially offset by $526.9 million repayment of debt principal, $305.7 million for withholding tax paid on behalf of employees for net share settlement, $191.0 million payment for our quarterly dividends, $181.2 million payment for repurchases and settlement of convertible notes, $134.4 million payments for technology license obligations and $11.9 million payments for debt financing and equity issuance costs associated with the Inphi acquisition.
These inflows were partially offset by $526.8 million repayment of debt principal, $305.8 million for withholding tax paid on behalf of employees for net share settlement, $191.0 million payment for our quarterly dividends, $181.2 million payment for repurchases and settlement of convertible notes, $134.5 million payments for technology license obligations and $11.8 million payments for debt financing and equity issuance costs associated with the Inphi acquisition.
Additionally, please see the information in “Item 1A: Risk Factors” under the caption “ Changes in existing taxation benefits, rules or practices may adversely affect our financial results .” Our Annual Report on Form 10-K for the year ended January 30, 2021 includes a discussion and analysis of our financial condition and results of operations for the year ended February 1, 2020 and year-to-year comparisons between the fiscal years ended January 30, 2021 and February 1, 2020 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Liquidity and Capital Resources Our principal source of liquidity as of January 29, 2022 consisted of approximately $613.5 million of cash and cash equivalents, of which approximate ly $498.0 million was held by subsidiaries outside of the United States.
Additionally, please see the information in “Item 1A: Risk Factors” under the caption “ Changes in existing taxation benefits, tax rules or tax practices may adversely affect our financial results .” Our Annual Report on Form 10-K for the fiscal year ended January 29, 2022 includes a discussion and analysis of our financial condition and results of operations for the year ended January 30, 2021 and year-to-year comparisons between the fiscal years ended January 29, 2022 and January 30, 2021 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 50 Liquidity and Capital Resources Our principal source of liquidity as of January 28, 2023 consisted of approximately $911.0 million of cash and cash equivalents, of which approximately $642.0 million was held by subsidiaries outside of the United States.
Conversely, we may have insufficient inventory, which would result in lost revenue opportunities and potential loss of market share as well as damaged customer relationships.” 42 Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Conversely, we may have insufficient inventory, or be unable to obtain the supplies or contract manufacturing capacity to meet that demand, which would result in lost revenue opportunities and potential loss of market share as well as damaged customer relationships.” Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Sales shipped to customers with operations in Asia represented approximately 78% of our net revenues in fiscal 2022, 80% of our net revenue in fiscal 2021 and 82% of our net revenue in fiscal 2020.
Sales shipped to customers with operations in Asia represented approximately 75% of our net revenue in fiscal 2023, 78% of our net revenue in fiscal 2022 and 80% of our net revenue in fiscal 2021.
The increase was mainly due to additional equity awards assumed upon the Inphi and Innovium acquisitions as described in “Note 4 - Business Combinations” and “Note 13 - Employee Benefit Plans” in the Notes to the Consolidated Financial Statements.
The increase was mainly due to additional equity awards assumed as part of the Inphi and Innovium acquisitions as described in “Note 7 – Business Combinations” and “Note 12 – Employee Benefit Plans” in the Notes to the Consolidated Financial Statements.
We believe that our existing cash, cash equivalents, together with cash generated from operations, and funds from our 2020 Revolving Credit Facility will be sufficient to cover our working capital needs, capital expenditures, investment requirements and any declared dividends, repurchase of our common stock and commitments for at least the next twelve months.
We believe that our existing cash, cash equivalents, together with cash generated from operations, and funds from our 2020 Revolving Credit Facility will be sufficient to cover our working capital needs, capital expenditures, investment requirements, any declared dividends, repurchases of our common stock and commitments (including those discussed in “Note 6 – Commitments and Contingencies” in the Notes to the Consolidated Financial Statements) for at least the next twelve months.
Results of Operations Years Ended January 29, 2022 and January 30, 2021 The following table sets forth information derived from our consolidated statements of operations expressed as a percentage of net revenue: Year Ended January 29, 2022 January 30, 2021 Net revenue 100.0 % 100.0 % Cost of goods sold 53.7 49.9 Gross profit 46.3 50.1 Operating expenses: Research and development 31.9 36.1 Selling, general and administrative 21.4 15.7 Legal settlement — 1.2 Restructuring related charges 0.7 5.8 Total operating expenses 54.0 58.8 Operating loss (7.7) (8.7) Interest income — 0.1 Interest expense (3.1) (2.3) Other income, net — 0.1 Loss before income taxes (10.8) (10.8) Benefit for income taxes (1.4) (1.5) Loss, net of tax (9.4) % (9.3) % 46 Net Revenue Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentage) Net revenue $ 4,462,383 $ 2,968,900 50.3 % Our net revenue for fiscal 2022 increased by $1.5 billion compared to net revenue for fiscal 2021.
Acquisition-related expenses and related restructuring costs are recognized separately from the business combination and are expensed as incurred. 46 Results of Operations Years Ended January 28, 2023 and January 29, 2022 The following table sets forth information derived from our consolidated statements of operations expressed as a percentage of net revenue: Year Ended January 28, 2023 January 29, 2022 Net revenue 100.0 % 100.0 % Cost of goods sold 49.5 53.7 Gross profit 50.5 46.3 Operating expenses: Research and development 30.1 31.9 Selling, general and administrative 14.3 21.4 Legal settlement 1.7 — Restructuring related charges 0.4 0.7 Total operating expenses 46.5 54.0 Operating income (loss) 4.0 (7.7) Interest income 0.1 — Interest expense (2.9) (3.1) Other income, net 0.2 — Income (loss) before income taxes 1.4 (10.8) Provision (benefit) for income taxes 4.2 (1.4) Net loss (2.8) % (9.4) % Net Revenue Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentage) Net revenue $ 5,919.6 $ 4,462.4 32.7 % Our net revenue for fiscal 2023 increased by $1.5 billion compared to net revenue for fiscal 2022.
Restructuring Related Charges Year Ended January 29, 2022 January 30, 2021 (in thousands) Restructuring related charges $ 32,342 $ 170,759 We recorded total restructuring related charges of $32.3 million in fiscal 2022 as we integrated the acquired businesses and continued to evaluate our existing operations to increase operational efficiency, decrease costs and improve profitability.
Restructuring Related Charges Year Ended January 28, 2023 January 29, 2022 January 30, 2021 (in millions) Restructuring related charges $ 21.6 $ 32.4 $ 170.8 Fiscal 2023 vs Fiscal 2022 : We recorded total restructuring related charges of $21.6 million in fiscal 2023 as we integrated the acquired businesses and continued to evaluate our existing operations to increase operational efficiency, decrease costs and improve profitability.
The cash outflow from working capital for fiscal 2022 was primarily driven by an increase in accounts receivable, an increase in inventories and an increase in prepaid expenses and other assets.
Cash outflow from working capital of $662.9 million was primarily driven by an increase in accounts receivable, an increase in inventories and an increase in prepaid expenses and other assets.
We continue to evaluate potential changes to our legal entity structure in response to guidelines and requirements in various international tax jurisdictions where we conduct business, as well as changes to our business, and acquisitions and divestitures. 49 Our provision for incomes taxes may be affected by changes in the geographic mix of earnings with different applicable tax rates, acquisitions, changes in the realizability of deferred tax assets, accruals related to contingent tax liabilities and period-to-period changes in such accruals, the results of income tax audits, the expiration of statutes of limitations, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws and regulations.
Our provision for incomes taxes may be affected by changes in the geographic mix of earnings with different applicable tax rates, acquisitions, changes in the realizability of deferred tax assets, accruals related to contingent tax liabilities and period-to-period changes in such accruals, the results of income tax audits, the expiration of statutes of limitations, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws and regulations.
Under the program authorized by our Board of Directors, we may repurchase shares of stock in the open-market or through privately negotiated transactions. The extent to which we repurchase our stock and the timing of such repurchases will depend upon market conditions, legal rules and regulations, and other corporate considerations, as determined by our management team.
The extent to which we repurchase our stock and the timing of such repurchases will depend upon market conditions, legal rules and regulations, and other corporate considerations, as determined by our management team.
This was due to an increase in sales from all our end markets. Revenue increased from the data center end market by 71%, from the carrier infrastructure end market by 37%, from the enterprise networking end market by 43%, from the consumer end market by 22%, and from the automotive/industrial end market by 112% co mpared to fiscal 2021.
This was due to an increase in sales from a majority of our end markets. Sales increased from the data center end market by 35%, from the enterprise networking end market by 51%, from the carrier infrastructure end market by 32%, and from the automotive/industrial end market by 43% co mpared to fiscal 2022.
See “Note 8 - Debt” in the Notes to the Consolidated Financial Statements for additional information. For a description of our contractual obligations including debt, leases, and purchase commitments, see “Note 8 - Debt,” “Note 9 - Leases,” and “Note 11 - Commitments and Contingencies” in the Notes to the Consolidated Financial Statements.
The notes are registered under the Securities Act. For a description of our contractual obligations including debt, leases, and purchase commitments, see “Note 4 – Debt,” “Note 5 – Leases,” and “Note 6 – Commitments and Contingencies” in the Notes to the Consolidated Financial Statements.
Our fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks.
Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2023, fiscal 2022 and fiscal 2021 each had a 52-week period. 42 Capital Return Program.
Net cash used in investing activities of $119.6 million in fiscal year 2021 was primarily driven by purchases of property and equipment of $106.8 million, and purchases of technology licenses of $12.7 million. 51 Cash Flows from Financing Activities Net cash provided by financing activities of $2.8 billion in fiscal 2022 was primarily attributable to proceeds from issuance of debt of $3.9 billion, $160.3 million proceeds from capped calls and $84.5 million proceeds from the issuance of our common stock under our equity inventive plans.
These outflows were partially offset by proceeds from issuance of debt of $200.0 million, and $91.3 million proceeds from the issuance of our common stock under our equity inventive plans. 52 Net cash provided by financing activities of $2.8 billion in fiscal year 2022 was primarily attributable to proceeds from issuance of debt of $3.9 billion, $160.3 million proceeds from capped calls and $84.5 million proceeds from the issuance of our common stock under our equity inventive plans.
This was due to an increase in sales from all our end markets. Revenue increased from the data center end market by 71%, from the carrier infrastructure end market by 37%, from the enterprise networking end market by 43%, from the consumer end market by 22%, and from the automotive/industrial end market by 112% co mpared to fiscal 2021.
This was due to an increase in sales from a majority of our end markets. Sales increased from the data center end market by 35%, from the enterprise networking end market by 51%, from the carrier infrastructure end market by 32%, and from the automotive/industrial end market by 43% compared to fiscal 2022.
Research and Development Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentages) Research and development $ 1,424,306 $ 1,072,740 32.8 % % of net revenue 31.9 % 36.1 % Research and development expense increased by $351.6 million in fiscal 2022 compared to fiscal 2021.
Research and Development Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentages) Research and development $ 1,784.3 $ 1,424.2 25.3 % % of net revenue 30.1 % 31.9 % Research and development expense increased by $360.1 million in fiscal 2023 compared to fiscal 2022.
Provision (Benefit) for Income Taxes Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentage) Provision (benefit) for income taxes $ (62,461) $ (44,870) 39.2 % The income tax benefit for fiscal 2022 differs from the U.S. federal statutory rate of 21% primarily due to tax benefits of stock-based compensation, offset by foreign income inclusions in the U.S. and non-deductible compensation.
The income tax benefit for fiscal 2022 differed from the U.S. federal statutory rate of 21% primarily due to tax benefits of stock-based compensation, offset by foreign income inclusions in the U.S. and non-deductible compensation.
Legal Settlement Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentages) Legal settlement $ — $ 36,000 * % of net revenue — % 1.2 % *Not meaningful In connection with a dispute, we recorded a charge of $36 million in fiscal year 2021.
Legal Settlement Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentages) Legal settlement $ 100.0 $ — * % of net revenue 1.7 % — % *Not meaningful We recorded a charge of $100.0 million in fiscal year 2023 related to the settlement of a contractual dispute.
The cash inflow from working capital for fiscal 2021 was primarily driven by an increase in accrued liabilities and other non-current liabilities, an increase in accounts payable, and an increase in accrued employee compensation, as well as a decrease in inventories.
Cash outflow from working capital of $649.8 million for fiscal 2023 was primarily driven by an increase in accounts receivable, an increase in inventories, an increase in prepaid expenses and other assets, and a decrease in accounts payable partially offset by cash inflows due to an increase in accrued liabilities and other non-current liabilities and an increase in accrued employee compensation.
Our capital requirements will depend on many factors, including our rate of sales growth, market acceptance of our products, costs of securing access to adequate manufacturing capacity, the timing and extent of research and development projects and increases in operating expenses, which are all subject to uncertainty. 50 To the extent that our existing cash and cash equivalents together with cash generated by operations, and funds available under our 2020 Revolving Credit Facility are insufficient to fund our future activities, we may need to raise additional funds through public or private debt or equity financing.
Our capital requirements will depend on many factors, including our rate of sales growth, market acceptance of our products, costs of securing access to adequate manufacturing capacity, the timing and extent of research and development projects and increases in operating expenses, all of which are subject to uncertainty.
The increase in prepaid expenses and other assets was due to an increase in ship and debit reserve.
The increase in prepaid expenses and other assets was primarily due to prepayments on supply capacity reservation agreements and an increase in ship and debit reserve. The decrease in accounts payable was primarily due to the timing of payments.
Our dividend payments and repurchases of common stock may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase stock at all or in any particular amounts. Our stock repurchase program was temporarily suspended in late March 2020 to preserve cash during the COVID-19 pandemic.
Our dividend payments and repurchases of common stock may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase stock at all or in any particular amounts. 51 Cash Flows from Operating Activities Net cash provided by operating activities was $1.3 billion for fiscal 2023 compared to net cash provided by operating activities of $819.3 million for fiscal 2022.
As a result, gross margin for fiscal 2022 decreased 3.8 percentage points compared to fiscal 2021.
As a result, gross profit for fiscal 2023 increased 4.2 percentage points compared to fiscal 2022.
Our cash and cash equivalents were $613.5 million at January 29, 2022, which were $135.0 million lower than our balance at our fiscal year ended January 30, 2021 of $748.5 million. We had cash flow provided by operations of $819.4 million during fiscal 2022. Sales and Customer Composition.
Cash and Short-Term Investments. Our cash and cash equivalents were $911.0 million at January 28, 2023, which were $297.5 million higher than our balance at our fiscal year ended January 29, 2022 of $613.5 million . Sales and Customer Composition.
Stock-Based Compensation Expense Year Ended January 29, 2022 January 30, 2021 (in thousands) Cost of goods sold $ 31,081 $ 16,320 Research and development 273,247 150,867 Selling, general and administrative 173,217 74,352 Total stock-based compensation $ 477,545 $ 241,539 Stock-based compensation expense increased by $236.0 million in fiscal 2022 compared to fiscal 2021.
Stock-Based Compensation Expense Year Ended January 28, 2023 January 29, 2022 (in millions) Cost of goods sold $ 43.3 $ 31.1 Research and development 372.4 273.2 Selling, general and administrative 136.7 173.2 Total stock-based compensation $ 552.4 $ 477.5 48 Stock-based compensation expense increased by $74.9 million in fiscal 2023 compared to fiscal 2022.
Other Income, net Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentages) Other income, net $ 2,764 $ 2,886 (4.2)% % of net revenue — % 0.1 % Other income, net was relatively flat in fiscal 2022 compared to fiscal 2021.
Other Income, net Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentages) Other income, net $ 12.4 $ 2.7 359.3% % of net revenue 0.2 % — % Other income, net increased by $9.7 million in fiscal 2023 compared to fiscal 2022.
As of January 29, 2022, there was $564.5 million remaining available for future stock repurchases. See “Note 12 - Stockholders’ Equity” in the Notes to the Consolidated Financial Statements for further information. We returned $191.0 million to stockholders in fiscal 2022 in cash dividends. Cash and Short-Term Investments.
As of January 28, 2023, $449.5 million remained available under our stock repurchase program for future stock repurchases. See “Note 11 – Stockholders’ Equity” in the Notes to the Consolidated Financial Statements for further information.
The increase was partially offset by $55.6 million of higher non-recurring engineering credits recognized in the current period compared to fiscal 2021. 47 Selling, General and Administrative Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentages) Selling, general and administrative $ 955,245 $ 467,240 104.4 % % of net revenue 21.4 % 15.7 % Selling, general and administrative expense increased by $488.0 million in fiscal 2022 compared to fiscal 2021.
Selling, General and Administrative Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentages) Selling, general and administrative $ 843.6 $ 955.3 (11.7) % % of net revenue 14.3 % 21.4 % Selling, general and administrative expense decreased by $111.7 million in fiscal 2023 compared to fiscal 2022.
Interest Expense Year Ended January 29, 2022 January 30, 2021 % Change in 2022 (in thousands, except percentages) Interest expense $ (139,341) $ (69,264) 101.2 % % of net revenue (3.1) % (2.3) % Interest expense increased by $70.1 million in fiscal 2022 compared to fiscal 2021.
Interest Income Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentages) Interest income $ 5.3 $ 0.8 562.5 % % of net revenue 0.1 % — % Interest income increased by $4.5 million in fiscal 2023 compared to fiscal 2022 due to higher interest rates on our invested cash and higher cash balance. 49 Interest Expense Year Ended January 28, 2023 January 29, 2022 % Change in 2023 (in millions, except percentages) Interest expense $ (170.6) $ (139.3) 22.5 % % of net revenue (2.9) % (3.1) % Interest expense increased by $31.3 million in fiscal 2023 compared to fiscal 2022.
See “Note 8 - Debt” in the Notes to the Consolidated Financial Statements for additional information.
See “Note 6 – Commitments and Contingencies” in the Notes to the Consolidated Financial Statements for additional information. We continue to monitor the impact of COVID-19 on our business.
As of January 29, 2022, the Inphi convertible notes have been settled. In December 2020, to fund the Inphi acquisition, we executed a debt agreement to obtain a $875 million 3-year term loan and a $875 million 5-year term loan.
In December 2020, to fund the Inphi acquisition, we executed the 2024 and 2026 Term Loan Agreement to obtain the 2024 and 2026 Term Loans. For the year ended January 28, 2023, we repaid $65.6 million of the principal outstanding on the 2026 Term Loan.
During the year ended January 29, 2022, the Company repaid $140 million and $21.9 million of the principal outstanding of the 3-year term loan and 5-year term loan, respectively. We also executed a debt agreement to obtain a $750 million revolving credit facility.
As of January 28, 2023, we had $735.0 million borrowings outstanding under the 2024 Term Loan and $787.5 million borrowings outstanding under the 2026 Term Loan. In December 2020, we also executed a debt agreement to obtain a $750.0 million revolving credit facility (the “2020 Revolving Credit Facility”).
Net cash used in financing activities of $596.8 million in fiscal year 2021 was primarily attributable to $250.0 million repayment of debt principal, $160.6 million payment for our quarterly dividends, $100.0 million payment for technology license obligations and $38.0 million payments for debt financing and equity issuance costs associated with the Inphi acquisition.
Cash Flows from Financing Activities Net cash used in financing activities of $662.9 million in fiscal 2023 was primarily attributable to $265.6 million repayment of debt principal, $227.6 million for withholding tax paid on behalf of employees for net share settlement, $204.4 million payment for our quarterly dividends, $142.5 million payments for technology license obligations and $115.0 million repurchases of common stock.
The increase in accrued employee compensation was due to the increase in our bonus accrual and increase in employee contributions to the employee stock purchase plan. The decrease in inventories was due to improved supply chain management. The increase in accounts receivable was driven primarily by the increase in revenue and stable collections.
The increase in accrued employee compensation was due to increases in our bonus accrual and in employee contributions to the employee stock purchase plan, net of payments. Net cash provided by operating activities was $819.3 million for fiscal 2022.
The increase was primarily due to the interest expense on the 2020 Term Loans in addition to the new 2026, 2028, and 2031 Senior Notes issued in the first quarter of fiscal 2022, as well as the write-off of issuance costs related to the bridge loan when the loan was terminated in the first quarter of fiscal 2022.
The increase was primarily due to higher interest expense and amortization of debt issuance costs associated with the 2024 and 2026 Term Loans and the Senior Notes, partially offset by prior period costs associated with the bridge loan termination.
See “Note 10 - Restructuring” in the Notes to the Consolidated Financial Statements for further information. Capital Return Program. We remain committed to delivering stockholder value through our stock repurchase and dividend programs. On October 16, 2018, we announced that our Board of Directors authorized a $700 million addition to the balance of our existing stock repurchase program.
We remain committed to delivering stockholder value through our stock repurchase and dividend programs. Under the program authorized by our Board of Directors, we may repurchase shares of our common stock in the open-market or through privately negotiated transactions.
The increase was primarily due to additional costs from our acquisition of Inphi and Innovium, including $268.0 million of higher personnel-related costs, $39.3 million of higher computer-aided design software related costs, $20.8 million of higher depreciation and amortization costs and $18.7 million of higher engineering design and supplies costs.
The increase was primarily due to $255.1 million of higher employee personnel-related costs, including $99.2 million of higher stock-based compensation expense, as a result of headcount increases, including the addition of new employees from our recent acquisitions, $42.0 million of higher engineering design costs, and $24.9 million higher depreciation and amortization costs.
This was primarily driven by organic growth of our business and the acquisition of Inphi, which increased our unit shipments, and relatively higher sales of our products where we supply more content and features to our customers, which increased our average selling prices.
The sales from the consumer end market were relatively flat for fiscal 2023 compared to fiscal 2022. The overall increase in revenue of 33% for fiscal 2023 was primarily driven by relatively higher sales of products with higher average selling prices associated with higher content and more features.
Removed
On April 20, 2021, we completed our acquisition of Inphi in a cash and stock transaction. Inphi is a global leader in high-speed data movement enabled by optical interconnects. The consolidated financial statements include the operating results of Inphi for the period from the date of acquisition through our year ended January 29, 2022.
Added
The sales from our consumer end market were relatively flat for fiscal 2023 compared to fiscal 2022.
Removed
In conjunction with the acquisition, Marvell Technology Group Ltd. and Inphi became wholly owned subsidiaries of the new parent company, Marvell Technology, Inc. on April 20, 2021. The parent company is domiciled in and subject to taxation in the United States.
Added
Starting in fiscal 2022 and through the first half of fiscal 2023, in response to a large increase in demand from our customers for our products in a majority of our end markets as they continued to invest in data infrastructure, our operations team continued to increase production with our global supply chain partners to alleviate supply constraints.
Removed
On October 5, 2021, we completed our acquisition of Innovium, a leading provider of networking solutions for cloud and edge data centers, in an all-stock transaction. The consolidated financial statements include the operating results of Innovium for the period from the date of acquisition through our year ended January 29, 2022.
Added
However, with the start of a broad inventory correction in the semiconductor industry, supply constraints have now mostly resolved. During the second half of fiscal 2023, in response to a softening demand environment, customers started requesting to push out shipments and reschedule orders to manage their inventory. In the fourth quarter, we saw the largest impact from our storage customers.
Removed
See “Note 4 - Business Combinations” and “Note 5 - Goodwill and Acquired Intangible Assets, Net” for more information. In response to increased demand from customers for our products, our operations team is continuing to ramp production with our global supply chain partners.
Added
In addition, demand for our products has come down significantly from our OEM customers in China, as they deal with a changing macroeconomic situation. To secure capacity over the long term, we have entered into and expect to continue to enter into capacity reservation arrangements with certain foundries and partners for substrates.
Removed
However, we are experiencing a number of industry-wide supply constraints affecting the type of high complexity products we provide for data infrastructure. These supply challenges are currently limiting our ability to fully satisfy the increase in demand for some of our products. To secure additional capacity, we entered into capacity reservation arrangements with certain foundries and test & assembly partners.
Added
As part of our response to the effects of COVID-19, we adopted a hybrid work policy where most of our employees have the option to split their time between working from home and the office.
Removed
See “Note 11 - Commitments and Contingencies” in the Notes to the Consolidated Financial Statements for additional information. Securing capacity for growth remains a high priority for our operations team, even as this supply expansion comes with an increase in input costs.
Added
See also Part I, Item IA, “Risk Factors,” including, but not limited to, the risk detailed under the caption “ Adverse changes in the political and economic policies of the U.S. government in connection with trade with China and Chinese customers have reduced the demand for our products and damaged our business. ” Our fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31.
Removed
As we have done throughout the supply constraints, we are working with our customers to adjust prices to offset the impact of these cost increases, which lets us jointly benefit from sustained growth. We continue to monitor the impact of COVID-19 on our business.
Added
We resumed our stock repurchase program in the first quarter of fiscal 2023, which had been temporarily suspended in fiscal 2021 to preserve cash during the COVID-19 pandemic.
Removed
While many of our offices around the world remain open to enable critical on-site business functions in accordance with local government guidelines, the majority of our employees continue to work from home.
Added
During our fiscal year ended January 28, 2023, we repurchased 2.3 million shares of our common stock for $115.0 million, including 0.9 million shares of our common stock repurchased for $50.0 million pursuant to a 10b5-1 trading plan during the second quarter of fiscal 2023.
Removed
Fiscal 2022, fiscal 2021 and fiscal 2020 each had a 52-week period. 41 Restructuring. We continuously evaluate our existing operations to increase operational efficiency, decrease costs and increase profitability.
Added
As of January 28, 2023, a total of 310.4 million shares have been repurchased since inception of our current and previous stock repurchase programs for an aggregate total of $4.4 billion in cash. We returned $319.4 million to stockholders in fiscal 2023 through $115.0 million in repurchases of shares of common stock and $204.4 million in cash dividends.
Removed
In the first quarter of fiscal 2022, a restructuring plan was initiated in order to realign the organization and enable further investment in key priority areas as part of our integration of the acquisitions as described in “Note 4 - Business Combinations.” During fiscal 2022, we recorded restructuring and other related charges of $31.6 million.
Added
The decrease was primarily due to a $97.9 million decrease in transaction and integration costs associated with our acquisitions of Inphi and Innovium, Inc. (“Innovium”) that were incurred in the prior year.
Removed
The stock repurchase program was temporarily suspended in late March 2020 to preserve cash during the COVID-19 pandemic. We are focusing on reducing our debt and de-levering our balance sheet. As a result, we did not repurchase any stock during fiscal 2022. We will continue to evaluate business conditions to decide when to restart the stock repurchase program.
Added
In addition, our employee personnel-related costs were lower by $13.7 million due to lower stock based compensation expense mainly related to accelerated vesting of Inphi equity awards incurred in the prior year as part of the Inphi acquisition.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeHowever, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies. 52 We may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries.
Biggest changeWe may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries.
We invest our excess cash primarily in highly liquid debt instruments of the U.S. government and its agencies, money market mutual funds, corporate debt securities and municipal debt securities that are classified as available-for-sale and time deposits.
We typically invest our excess cash primarily in highly liquid debt instruments of the U.S. government and its agencies, money market mutual funds, corporate debt securities and municipal debt securities that are classified as available-for-sale and time deposits.
Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. There were no such investments on hand at January 29, 2022, aside from cash and cash equivalents. Foreign Currency Exchange Risk .
Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. There were no such investments on hand at January 28, 2023, aside from cash and cash equivalents. Foreign Currency Exchange Risk .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk . With our outstanding debt, we are exposed to various forms of market risk, including the potential losses arising from adverse changes in interest rates on our outstanding Term Loan, including changes that may result from implementation of new benchmark rates that replace LIBOR.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk . With our outstanding debt, we are exposed to various forms of market risk, including the potential losses arising from adverse changes in interest rates on our outstanding 2024 and 2026 Term Loans.
To the extent the one-month LIBOR ceases to exist, the 2020 Term Loans and 2020 Revolving Credit Facility agreements contemplate an alternative benchmark rate without the need for any amendment thereto.
The one-month LIBOR is expected to cease publication after June 30, 2023. To the extent the one-month LIBOR ceases to exist, the 2024 and 2026 Term Loans and 2020 Revolving Credit Facility contemplate an alternative benchmark rate without the need for any amendment thereto.
See “Note 8 - Debt” for further information. A hypothetical increase or decrease in the interest rate by 1% would result in an increase or decrease in annual interest expense by approximately $15.7 million. We currently carry debt that relies on one-month LIBOR as the benchmark rate. The one-month LIBOR is expected to cease publication after June 30, 2023.
See “Note 4 – Debt” in our Notes to the Consolidated Financial Statements for further information. A hypothetical increase or decrease in the interest rate by 1 percentage point may result in an increase or decrease in annual interest expense by approximately $15.1 million. We currently carry debt that relies on one-month LIBOR as the benchmark rate.
We do not believe that foreign exchange volatility has a material impact on our current business or results of operations.
We do not believe that foreign exchange volatility has a material impact on our current business or results of operations. However, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies.

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