August 27, 2009 - PRESS RELEASE - 8-K: Current report

Exhibit 99.1


For further information, contact:

Jeff Palmer		Tom Hayes
Investor Relations		Corporate Communications
408-222-8373		408-222-2815
jpalmer@marvell.com		tom@marvell.com

Marvell Technology Group Ltd. Reports Fiscal Second Quarter Results

Revenue: $640.6 Million, Up 23 Percent Sequentially

GAAP Net Income: $58.5 Million, $0.09 per share EPS

Free Cash Flow: $175.3 Million, 27 Percent of Revenues

Santa Clara, California (August 27, 2009) Marvell Technology Group Ltd. (NASDAQ: MRVL), a world leader in storage, communications and consumer silicon solutions, today reported financial results for the second quarter of fiscal 2010, ended August 1, 2009.

Net revenue for the second quarter of fiscal 2010 was $640.6 million, a 23 percent sequential increase from $521.4 million in the first quarter of fiscal 2010, ended May 2, 2009 and a 24 percent decrease from $842.6 million in the second quarter of fiscal 2009, ended August 2, 2008.

GAAP net income was $58.5 million, or $0.09 per share (diluted), for the second quarter of fiscal 2010, as compared to a GAAP net loss of $111.5 million, or $0.18 per share (diluted), for the first quarter of fiscal 2010. For the second quarter of fiscal 2009 GAAP net income was $71.4 million, or $0.11 per share (diluted).

Non-GAAP net income was $118.7 million, or $0.18 per share (diluted), for the second quarter of fiscal 2010, an increase of 272 percent from non-GAAP net income of $31.9 million, or $0.05 per share (diluted), for the first quarter of fiscal 2010, and a 23 percent decrease compared with non-GAAP net income of $154.0 million, or $0.24 per share (diluted), for the second quarter of fiscal 2009.

We are pleased with the results reported for the second quarter of fiscal 2010, said Dr. Sehat Sutardja, Marvell Chairman and Chief Executive Officer. Our sequential revenue growth reflects both an improving economy and the acceptance by customers of our new and existing products. Additionally, the financial discipline we have adopted continued to deliver positive benefits during the second quarter, allowing us to achieve our long-term profitability and cash flow targets well ahead of schedule.

Marvell reports net income or loss, basic and diluted net income or loss per share in accordance with U.S. generally accepted accounting principles (GAAP) and on a non-GAAP basis as outlined below. Reconciliations of GAAP net income or loss to non-GAAP net income for the three months ended August 1, 2009, May 2, 2009 and August 2, 2008, respectively, appear in the financial statements below.

GAAP gross margin for the second quarter of fiscal 2010 was 55.0 percent, compared to 50.6 percent for the first quarter of fiscal 2010 and 51.8 percent for the second quarter of fiscal 2009. Non-GAAP gross margin for the second quarter of fiscal 2010 increased to 55.3 percent, compared to 51.6 percent for the first quarter of fiscal 2010 and 52.3 percent for the second quarter of fiscal 2009.

Shares used to compute GAAP net income per diluted share for the second quarter of fiscal 2010 were 648 million shares, compared with 619 million shares in the first quarter of fiscal 2010 and 638 million shares in the second quarter of fiscal 2009. Shares used to compute non-GAAP net income per diluted share for the second quarter of fiscal 2010 were 652 million shares, compared with 637 million shares for the first quarter of fiscal 2010 and 640 million shares for the second quarter of fiscal 2009.

Cash flow from operations for the second quarter of fiscal 2010 was $182.3 million, up 26 percent sequentially from $144.5 million reported in the first quarter of fiscal 2010 and down less than one percent from $182.9 million in the second quarter of fiscal 2009. Free cash flow, defined as cash flow from operations less capital expenditures and purchases of IP licenses, was $175.3 million, up 33 percent sequentially from $131.8 million in the first quarter of fiscal 2010 and up 6 percent from $165.6 million in the second quarter of fiscal 2009.

Conference Call

Marvell will be conducting a conference call on August 27, 2009 at 1:45 p.m. PDT to discuss results for the second quarter ended August 1, 2009. Interested parties may dial-in to the conference call at 1-800-510-9661, pass-code 55940109. The call is being webcast by ThomsonReuters and can be accessed at Marvells website under the Investor Events section of the Investor Relations page at http://www.marvell.com/investors/events.jsp. Replay on the internet will be available following the call until September 24, 2009.

Discussion of Non-GAAP Financial Measures

Non-GAAP financial measures exclude stock-based compensation expense as well as charges related to acquisitions, restructuring, gains and other charges that are driven primarily by discrete events that management does not consider to be directly related to Marvells core operating performance. Non-GAAP earnings per share is calculated by dividing non-GAAP net income by non-GAAP weighted average shares outstanding (diluted). For purposes of calculating non-GAAP earnings per share, the GAAP weighted average shares outstanding (diluted) is adjusted to exclude the potential benefits of compensation costs expected to be incurred in future periods, but not yet recognized in the financial statements. The expected compensation costs are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Marvell believes that the presentation of non-GAAP financial measures provide important supplemental information to management and investors regarding financial and business trends relating to Marvells financial condition and results of operations. While Marvell uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance, Marvell does not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, Marvell believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance. For further information regarding why Marvell believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to Marvells Current Report on Form 8-K filed today with the SEC. The Form 8-K is available on the SECs website at www.sec.gov as well as on the Marvell website in the Investor Relations section at www.marvell.com.

About Marvell

Marvell Technology (NASDAQ: MRVL) is a global leader in the development of storage, communications and consumer silicon solutions. Marvells diverse product portfolio includes switching, transceiver, communications controller, wireless, and storage solutions that power the entire communications infrastructure, including enterprise, metro, home, and storage networking. As used in this release, the terms Company and Marvell refer to Marvell Technology Group Ltd. and its subsidiaries. For more information visit www.marvell.com

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding the Companys expectations regarding the economy and acceptance by customers of the Companys new and existing products; and statements concerning the Companys use of non-GAAP financial measures as important supplemental information. These statements are not guarantees of results and should not be considered as an indication of future performance. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties, including, among others, the Companys reliance on major customers and suppliers; market acceptance of new products; uncertainty in the worldwide economic environment; successful execution of the Companys restructuring plan and other risks detailed in Marvells SEC filings. When Marvell files its Form 10-Q for the second quarter of fiscal 2010, the financial statements may differ from the results disclosed in this press release because judgments and estimates that management used in preparing the financial results reported in this press release may need to be updated to the date of the filing. The Companys results also remain subject to review by the Companys independent registered public accounting firm. For other factors that could cause Marvells results to vary from expectations, please see the risk factors identified in Marvells latest Annual Report on Form 10-K for the year end January 31, 2009, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as filed with the SEC and other factors detailed from time to time in Marvells filings with the SEC. Marvell undertakes no obligation to revise or update publicly any forward-looking statements.

Marvell Technology Group Ltd.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended								Six Months Ended
	August 1, 2009		May 2, 2009			August 2, 2008			August 1, 2009			August 2, 2008
Net revenue	$	640,620	$	521,434		$	842,575		$	1,162,054		$	1,646,650
Cost of goods sold		288,059		257,630			405,913			545,689			794,755

Gross profit		352,561		263,804			436,662			616,365			851,895
Operating expenses:
Research and development		192,664		200,249			249,714			392,913			488,189
Selling and marketing		32,384		32,646			41,834			65,030			87,922
General and administrative		28,562		101,496			30,989			130,058			43,940
Amortization and write-off of acquired intangible assets		26,446		30,356			34,988			56,802			70,235
Restructuring		4,956		8,336						13,292

Total operating expenses		285,012		373,083			357,525			658,095			690,286

Operating income (loss)		67,549		(109,279	)		79,137			(41,730	)		161,609
Interest and other income (expense), net		279		(160	)		(754	)		119			(5,446	)

Income (loss) before income taxes		67,828		(109,439	)		78,383			(41,611	)		156,163
Provision for income taxes		9,335		2,018			7,016			11,353			14,857

Net income (loss)	$	58,493	$	(111,457	)	$	71,367			(52,964	)		141,306


Basic net income (loss) per share	$	0.09	$	(0.18	)	$	0.12		$	(0.09	)	$	0.23

Diluted net income (loss) per share	$	0.09	$	(0.18	)	$	0.11		$	(0.09	)	$	0.22


Shares used in computing basic earnings per share		620,881		618,677			606,860			619,779			604,041
Shares used in computing diluted earnings per share		648,110		618,677			637,832			619,779			631,091

Marvell Technology Group Ltd.

Reconciliation of Non-GAAP Adjustments

(Unaudited)

(In thousands, except per share amounts)

Reconciliation of GAAP net income (loss) to non-GAAP net income:


	Three Months Ended									Six Months Ended
	August 1, 2009			May 2, 2009			August 2, 2008			August 1, 2009			August 2, 2008
GAAP net income (loss)	$	58,493		$	(111,457	)	$	71,367		$	(52,964	)	$	141,306
Stock-based compensation		30,015			31,648			47,627			61,663			92,853
Amortization and write-off of acquired intangible assets		26,446			30,356			34,988			56,802			70,235
Restructuring		4,956			8,336						13,292
Legal/Tax settlements (a)		(1,202	)		72,000						70,798
Other (a)					990						990

Non-GAAP net income	$	118,708		$	31,873		$	153,982		$	150,581		$	304,394


GAAP weighted average shares - diluted		648,110			618,677			637,832			619,779			631,091
Non-GAAP adjustment		3,651			17,928			2,315			24,404			1,203

Non-GAAP weighted average shares diluted (b)		651,761			636,605			640,147			644,183			632,294


GAAP diluted net income (loss) per share	$	0.09		$	(0.18	)	$	0.11		$	(0.09	)	$	0.22

Non-GAAP diluted net income per share	$	0.18		$	0.05		$	0.24		$	0.23		$	0.48


GAAP gross profit:	$	352,561		$	263,804		$	436,662		$	616,365		$	851,895
Stock-based compensation		1,810			4,116			3,755			5,926			6,828
Other (a)					990						990

Non-GAAP gross profit	$	354,371		$	268,910		$	440,417		$	623,281		$	858,723


GAAP gross profit as a % of revenue		55.0	%		50.6	%		51.8	%		53.0	%		51.7	%
Stock-based compensation		0.3	%		0.8	%		0.5	%		0.5	%		0.4	%
Other (a)					0.2	%					0.1	%

Non-GAAP gross profit		55.3	%		51.6	%		52.3	%		53.6	%		52.1	%


GAAP research and development:	$	192,664		$	200,249		$	249,714		$	392,913		$	488,189
Stock-based compensation		(22,193	)		(21,737	)		(32,998	)		(43,930	)		(62,930	)
Payroll tax penalty		1,820									1,820

Non-GAAP research and development	$	172,291		$	178,512		$	216,716		$	350,803		$	425,259


GAAP selling and marketing:	$	32,384		$	32,646		$	41,834		$	65,030		$	87,922
Stock-based compensation		(3,659	)		(3,711	)		(6,159	)		(7,370	)		(13,507	)
Payroll tax penalty		659									659

Non-GAAP selling and marketing	$	29,384		$	28,935		$	35,675		$	58,319		$	74,415


GAAP general and administrative:	$	28,562		$	101,496		$	30,989		$	130,058		$	43,940
Stock-based compensation		(2,353	)		(2,084	)		(4,715	)		(4,437	)		(9,588	)
Legal settlement					(72,000	)					(72,000	)
Payroll tax penalty		158									158

Non-GAAP general and administrative	$	26,367		$	27,412		$	26,274		$	53,779		$	34,352

(a)

Fiscal quarter ended August 1, 2009 includes the net impact of our settlement with the IRS related to our historical stock option granting practices. As the composition of the settlement was different than the initial reserve, the net benefit includes a $2.6 million benefit to operating expense with an offset of $1.4 million of interest expense.

Fiscal quarter ended May 2, 2009 includes a $72.0 million charge recorded in connection with the settlement of a class action securities litigation and $990K of underutilization charges recorded in connection with the rampdown of the Malaysia test operations.

(b)

For purposes of calculating non-GAAP diluted net income per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the benefits of SFAS 123R compensation costs attributable to future services and not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury method.

Marvell Technology Group Ltd.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)


	August 1, 2009			January 31, 2009
Assets
Current assets:
Cash, cash equivalents, and short-term investments	$	1,279,307		$	951,909
Accounts receivable, net		328,462			222,101
Inventories		211,383			310,654
Prepaid expenses, deferred income taxes and other current assets		70,770			75,651

Total current assets		1,889,922			1,560,315
Property and equipment, net		352,719			390,853
Long-term investments		39,333			40,541
Goodwill and acquired intangible assets, net		2,227,440			2,284,164
Other non-current assets		132,117			138,327

Total assets	$	4,641,531		$	4,414,200


Liabilities and Shareholders Equity
Current liabilities:
Accounts payable	$	268,541		$	139,028
Accrued liabilities		248,122			175,135
Income taxes payable		48,554			35,803
Deferred income		42,027			57,895
Current portion of capital lease obligations		1,862			1,787

Total current liabilities		609,106			409,648
Capital lease obligations, net of current portion		1,501			2,451
Other long-term liabilities		173,852			173,034

Total liabilities		784,459			585,133


Shareholders equity:
Common stock		1,245			1,233
Additional paid-in capital		4,453,177			4,372,265
Accumulated other comprehensive income (loss)		(673	)		(718	)
Accumulated deficit		(596,677	)		(543,713	)

Total shareholders equity		3,857,072			3,829,067

Total liabilities and shareholders equity	$	4,641,531		$	4,414,200

Marvell Technology Group Ltd.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Three Months Ended						Six Months Ended
	August 1, 2009			August 2, 2008			August 1, 2009			August 2, 2008
Cash flows from operating activities:
Net income (loss)	$	58,493		$	71,367		$	(52,964	)	$	141,306
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		25,030			28,032			50,405			56,650
Stock-based compensation		30,015			47,627			61,663			92,853
Amortization and write-off of acquired intangible assets		26,446			34,988			56,802			70,235
Fair market value adjustment to Intel inventory sold		(1,733	)		(4,374	)		(3,076	)		(10,757	)
Net impact of derivative contracts		(1,302	)					(827	)
Excess tax benefits from stock-based compensation		(40	)		(325	)		(69	)		(494	)
Deferred income taxes		5,868						5,868
Changes in assets and liabilities, net of assets acquired and liabilities assumed in acquisitions:
Restricted cash											(24,500	)
Accounts receivable		(43,095	)		(100,474	)		(106,361	)		(138,626	)
Inventories		(5,694	)		47,409			100,587			103,327
Prepaid expenses and other assets		(4,582	)		10,344			9,748			42,810
Accounts payable		103,043			68,954			133,781			5,878
Accrued liabilities and other		6,079			(15,192	)		69,059			(33,999	)
Accrued employee compensation		(14,007	)		(6,968	)		(974	)		9,995
Income taxes payable		3,585			(842	)		4,928			5,814
Deferred income		(5,773	)		2,338			(1,708	)		(7,415	)

Net cash provided by operating activities		182,333			182,884			326,862			313,077
Cash flows from investing activities:
Purchases of investments					(46	)					(10,172	)
Sales and maturities of short-term and long-term investments		50						50			23,793
Purchases of technology licenses		(3,250	)		(1,250	)		(12,550	)		(1,250	)
Purchases of property and equipment		(3,765	)		(16,010	)		(7,179	)		(46,532	)

Net cash used in investing activities		(6,965	)		(17,306	)		(19,679	)		(34,161	)
Cash flows from financing activities:
Proceeds from the issuance of common shares		20,636			50,602			21,021			67,656
Principal payments on capital lease and debt obligations		(442	)		(101,280	)		(875	)		(103,405	)
Excess tax benefits from stock-based compensation		40			325			69			494

Net cash provided by (used in) financing activities		20,234			(50,353	)		20,215			(35,255	)

Net increase in cash and cash equivalents		195,602			115,225			327,398			243,661

Cash and cash equivalents at beginning of period		1,059,205			744,084			927,409			615,648

Cash and cash equivalents at end of period	$	1,254,807		$	859,309		$	1,254,807		$	859,309

Form: 8-K

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