Chip Customers Concerned About Supply Rather Than Price

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The CEO of Marvell Technology Inc, Matt Murphy, recently told media that customers were willing to accept price increases in exchange for a stable chip offering after the company reported higher-than-expected quarterly revenue.

“Ultimately, what they care about is capacity? ‘Can you supply me? If you can’t get me the parts, why would I agree to a price increase?'” Murphy said.

Marvell, a network chip developer whose customers are mainly data centers and automakers, raised its third-quarter sales forecast after second-quarter sales were stronger than expected.

The company forecast third-quarter revenue and adjusted profit of $1.145 billion and 38 cents per share, compared with Wall Street estimates of $1.13 billion and 37 cents per share.

Marvell designs chips but relies on others to manufacture them, and these manufacturers are in the midst of a severe global shortage resulting from a boom in demand from various industries.

Marvell said that although demand had outstripped supply, it had successfully passed on many price increases to customers, thereby securing its own margins.

For more information, read the original story in Reuters.

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