Good day, ladies and gentlemen and welcome to the Marvell Technology Group 2008 second quarter earnings conference call. (Operator Instructions) I would now like to turn the presentation over to Dr. Sehat Sutardja, Chairman and CEO of Marvell Technology. Please proceed, sir.

Thank you, Cammie. Welcome, everyone to our second quarter fiscal 2008 conference call. Mike Rashkin, our interim Chief Financial Officer, is also on the call with me today. Today we reported Q2 revenue of $657 million, which represented a year-over-year increase of 14% and a sequential increase of 3% from the prior quarter. We had previously guided our Q2 revenues to approximately $645 million on our Q1 earnings call last May. As a result of strong sales in our communication processors in wireless LAN businesses, our Q2 revenues exceeded our expectations. This overall market demand for our products is continuing and it will lead to further revenue increases in Q3, which Mike will detail later. The sales trend is an indication that we are starting to see pay-off from our investments in a broad range of technologies and from our ability to efficiently integrate these technologies into superior products across many markets. With that, I would like to turn the call over to Mike Rashkin, who can provide more insight into our Q2 financial results.

Thank you, Sehat. Good afternoon, everyone. I would like to remind all participants that our discussion today will contain predictions, estimates, and other forward-looking statements covering subjects such as enterprise, consumer, and emerging market trends, competition, customers, suppliers, products and demands, and expectation regarding sales trends, revenue growth, gross margins, operating expenses, and other income and expense, cash, accounts receivable and inventory. Such statements are usually preceded by words like expects, anticipates, believes, should, will, may, or words with similar import, and actual results can materially differ from our current expectation. To understand the risks that cause results to differ, please refer to our annual report on Form 10-K, quarterly reports on Form 10-Q, recent current reports on Form 8-K, and other Securities and Exchange Commission filings, all of which discuss important risk factors that may affect our business, results of operations and financial conditions. Please be reminded that we undertake no obligation to revise or update publicly any forward-looking statements for any reason. In addition, this presentation includes non-GAAP financial measures. With respect to historic information, the GAAP information and a reconciliation between the non-GAAP and GAAP figures is provided in our Q208 press release, which has been furnished to the SEC on Form 8-K and on our website in the investor section at www.marvell.com. With respect to prospective information, the GAAP information and reconciliation between the non-GAAP and GAAP figures is also provided on our website. During the quarter, we completed our restatement for the years 2001 through 2006, and filed our Form 10-K and the quarterly reports for fiscal 2007. Moreover, we filed our Q1 2008 Form 10-Q on July 9, 2007. These filings brought our financials up to date and we are currently in compliance with NASDAQ filing requirements. In addition to disclosing financial results calculated…

Thank you, Mike. As we move forward into Q3, we can see that our investment in a broad portfolio of advanced products is starting to bear fruit. In many cases, it has taken some time for our R&D expenditures to be converted into products, products into design wins, and design wins into revenue from production. For example, many of our wireless LAN design wins in the consumer and cell phone market are now in production in Q3, which we expect will provide us with an increase in revenue from that business in future quarters. We expect this process to continue, resulting in strong growth in future years. The strong backlog we are experiencing for our wireless LAN products is the result of many years of investment we have in that area, and there is also similar tangible evidence of progress and growth potential in other markets in which we have invested. We continue to see strong design activity from current and new customers with our PXA line of application and communication processors. During the quarter, Sharp launched enterprise and consumer models of our PXA wireless handhelds with three carriers, [Valcom], T-Mobile, and Softbank in Japan. This product used our PXA processor as well as our low power wireless LAN solution. We are pleased to see growth of our RIM business as they launch products in emerging markets like India. Also during the quarter, we saw increased engagement of our first highly integrated single chip communications processor, which combines an HSDPA 3G base band with high-speed application processor. New design wins for our application processors continue to increase well beyond smartphones in existing market segments like mobile workforce handheld devices, GPS, PDAs, VOIP, as well as in other emerging embedded segments. In the PC notebook segment, we are seeing strong adoption…

Thank you, Sehat. In Q3, we expect continued growth from both our consumer and wireless LAN products and our PXA processor business. We expect our storage sales to improve over Q2 as a result of positive seasonal factors. The remainder of our business appears to be consistent with Q2 levels. Based on the above factors, we currently believe our Q3 revenues will be approximately $710 million. We expect our Q3 gross margin to be slightly over 48% as a result of an increased mix of consumer products and PXA products. We expect our Q3 non-GAAP operating expenses to be approximately $274 million. Although we are investing in a number of new product initiatives, we also remain focused on controlling our expense growth and expect our expenses to grow at a rate below our rate of revenue growth in Q3. Shares used to compute our non-GAAP net income diluted shares is expected to increase to approximately 640 million for Q3. Our non-GAAP tax rate for the quarter will be 19.4%, although we expect to return to historic 10% rate or better in future years when operating income increases. As you know, Marvell recently announced the completion of an investigation into the company’s historical stock option practices. As that matter is the subject of ongoing litigation and governmental investigations, it would be in appropriate for us to comment on any aspect of those issues and unfortunately, we are not in a position to field any related questions during today’s call. Now I would like to turn the call back to Sehat.

Thanks, Mike. I have one concluding remark; some of you may be concerned about the large increase in R&D expenses over the last year. As you know, the reason for those expenses, the increase in expenses, has been our decision to enter the consumer electronics home entertainment and the cell phone spaces. As a result, we incurred initial heavy expenses. For example, in the cell phone space, we have to continue to support existing customers while investing in parallel future technologies to strengthen our position in this market. Now, it is our intention to manage our existing resources efficiently as we build the critical mass so that we can achieve our long-term financial model. I want to thank investors for your belief in the company during this past year, and that completes our commentary. Cammie, would you please poll for questions for the Q&A?

(Operator Instructions) Your first question comes from the line of Craig Ellis with Citigroup. Please proceed.

Thank you, guys. Congratulations on the strong revenue outlook. It looks like it’s about 8% growth. Can you just tell us, given that it seems to be deriving from wireless LAN and the handset business, how the growth in those two businesses compare? Is it about equal or is one in particular driving the growth that we are seeing on the top line?

I think that at this point in Q2, that they were equal, contributed equally.

Okay, and then as a follow-up to that, as you mentioned on the prior quarter’s results, there was a one-time benefit to operating expense, Michael. Can you quantify what that benefit was?

That was a $5 million benefit.

Okay, thanks, guys.

Your next question comes from the line of Arnab Chanda with Deutsche Bank. Please proceed.

Thank you. A couple of things; first of all, Sehat, you talked about the potential for you to gain market share in storage. Given where you are in storage, there’s only a few possible customers you could gain. Could you flesh that out a little bit, please? What areas do you think -- is it on the enterprise or the desktop that you think you can gain share?

As I mentioned in the call, as well as in the last call, we have been investing heavily in -- we continue to invest in new technologies for the storage. As a result, this is our strategy for the last 12 years investing in storage, is to build always the most advanced technology to allow customers to build better products, to allow them to give, to build new capacity points earlier, to get better yields earlier than their competitors that are not using our technology. This is the same recipe that we have been using over the years to achieve an increase in revenue as well as increase in market share. Specifically with regard to the enterprise, yes, I did mention that we expect to see revenue growth increase in that space as a result of this kind of investment we have in storage.

And one follow-up, please; optical storage was a product line that you were very excited about and it obviously hasn’t quite worked out in the same timeframe that you were looking for. Should we assume that as a contributor, a significant contributor for calendar ’08? And even if you can’t tell us specific customers, could you give us a sense of how significant or how confident you are that you are going to get some contribution from that segment? Thank you.

Yes, the optical technology is a very important piece of technology for us to get into the consumer electronics home entertainment market, because the optical technology is the foundation of this market. Another piece of the technology is the video, the high definition video processor technology, which I also mentioned in the call. You are right. Our revenue expectations on the optical side are a little bit off compared to our original goal but at the same time, I am still very, very positive with this prospect of this technology allowing us to get into this large market opportunity. At the same time, if you look at the other piece of the technology that we invested for the high definition video processing, actually that one is earlier than expected in terms of the market acceptance. I will say we are still early in the game, basically, in terms of this high definition market, so we do expect that the revenue to be -- to have some revenue in 2008 and 2009 will be the biggest timeframe where we see more revenue, significant revenue increase.

Thanks, Sehat, and a last question for Mike Rashkin; Mike, if you could explain why your tax rate went up, almost doubled, and why or what timeframe do you think it can go back to 10%? Thank you.

Yes. We do business in many countries throughout the world and in some cases, our income is not necessarily, our taxes are not necessarily dependent on the amount of income we earn. So even when we have a low amount of income, we are still paying a certain base amount of tax. As our net income increases in future years, that tax won’t scale proportionally and so our tax rate will naturally come down.

Can you tell us what timeframe that is, or --

I would anticipate that it would be next year.

Thanks, Mike. Thanks, Sehat.

Your next question comes from the line of Seogju Lee with Goldman Sachs. Please proceed.

Great. Thank you. Just a quick follow-up on the tax rate, Mike. In terms of next year, you are expecting it to be a 10% tax rate for that year, or just to clarify that?

It would depend on our revenue and our profitability and since I don’t have enough information about that at this stage, I really can’t give you what our tax rate would be, so I would say that the trend would be our tax rate would be down. I think this year is an aberration but I can’t give you an exact time when it’s going to come down to 10% or what exactly it will be next year.

Okay, great, and then I just wanted to follow up on the gross margin side, I think your guidance, you said slightly over 48%, so I just wanted to confirm that. And then, if we think about that sequentially, just sort of what the drivers are there -- is it just the mix shift with the PXA products having a richer portion of the mix or how should we think about that? If it is PXA, can you talk about how gross margin, or how you’re progressing in terms of improving the costs on that? Thanks and good luck.

Thank you. With regard to the margin, yes, I did say slightly over 48% and yes, the primary driver there is the mix with the PXA products. And in terms of how we are pursuing to increase our margins going forward, we are moving as quickly as we can to porting over to TSMC, the high volume products and those products are now in qualification with the customer. I think over time, we might have some margin [perpetations] until we make a complete transition out of the Intel inventory, until we get it completely to our own inventory.

Your next question comes from the line of Cody Acree with Stifel Nicolaus. Please proceed.

Thanks. Mike, could we just follow-up there a little bit? How long before you think you are fully ported over, at least to the point that you are actually seeing maybe a little more stable margin increases?

Well, the fully porting over, there’s a whole number of group of products, and we are porting over initially all the high volume products. And I think we will probably finish this process by the end of fiscal ’09.

Okay, all right.

I just want to add a little bit on that. The reason is because we do have commitments to the customers for even some of the latest designs to be produced at the Intel fab. In parallel, we have, even though those new designs, we also have to -- we have porting into the normal foundry model, so there will be a time when a number of even new products will be still manufactured at Intel before everything is moved to -- I think by the end of next year, we hope everything will be moved to TSMC.

Okay, maybe Sehat, we could just follow-up there for a second, the prior Mike had actually reiterated a goal of 50% margin by the end of this year. With this mix being higher, does that eliminate that possibility? Does it just push it out further into next year?

I think that is probably a goal for beyond this year and it is going to take us some time to get there.

Okay, and then lastly on the ethernet side, it sounds like that business is expected to be about flattish. Can you give us anymore color as to what you are seeing there, order trends, is it inventory, is it just seasonal business? Maybe a little more help.

We are actually getting a number of major -- actually, major, major design wins across the PC OEMs, but at the same time there are some price pressures, so we will probably see the business increasing but not spectacularly increasing. I don’t think it’s flat but as we go to more and more customers seeing our complete solutions, including the CPU network processors in that business, we do expect down the road we gain more revenues in the segment.

Any details, client versus infrastructure?

Yes, both actually -- in both segments we are getting major design wins, and some of those products will be out, like some of the really high visibility products will be out by the middle of next year, ramping out into production.

Thanks, guys.

Your next question comes from the line of Allan Mishan with CIBC World Markets. Please proceed.

Hey, guys. A quick question on the WiFi business; a lot of your growth right now is being driven by two fairly high profile consumer wins. Just a question on the seasonality of when those things get built; would you normally expect that the peak quarter for you would be the third quarter or the peak quarter for you would be the fourth quarter, just based on when those consumer devices get built and sold?

I think consumer products for Q3 is the quarter would be the most demand, seasonality.

Okay, so Q4 might just take a little bit of a dip based on the timing of those builds in that business?

I’m not going to make that statement at this point, but just generally, Q3 is a better consumer quarter.

It is hard for us to say that because we also have additional number of design wins, so that seasonality in the wireless LAN may be, hopefully will be tempered off.

Okay, that’s fair. And then on the optical drive win, can you just tell us what type of drive this is? Is this a blue laser, a red laser? I mean, you said before that you’d see some in ’08 and then more in ’09. If you could just confirm that.

I guess I didn’t say it. You’re right, I didn’t say whether it is red or blue, but it is both blue and red lasers. The hint to that is the high definition video processor, which is an important technology for this market, obviously requires us to provide a blue laser solution. Now, we do have also the derivative of that solution, which is just only red laser capability.

Okay, but the bulk of the revenue that you would expect in ’08 and ’09, is that off of a high volume red laser or is that off of a new next generation blue laser, in terms of just the revenue that you’ll see?

It’s hard for me to predict that. It could be either way.

Okay, thanks very much.

Your next question comes from the line of Mark Heller with Merrill Lynch. Please proceed.

Mike, just a couple of clarifications; first on the tax rate -- again, sorry to beat a dead horse here, but historically you never reported anything different from 10%. I’m just curious as to what changed this quarter that it is going up and then what is keeping it higher?

Well, as I said in our tax structure, there’s a certain amount of tax that we pay that is not connected to the amount of income we have. And so if our net income, operating income is relatively low, we still pay the same amount of tax in certain countries. As a result, our tax rate increases. As our operating income increases, that income, that amount of tax is a lower percentage of our overall income and our tax rate is much lower.

I guess I still don’t understand but maybe I’ll take it offline. The other thing is the non-operating line, you’ve been reporting a loss of decent -- I guess this quarter it was $7 million. Could you explain what is going on there and how long we’ll have that line, how long we’ll have that loss going forward?

That represents interest expense on our indebtedness.

So I understand there’s a term loan but you know, given your cash position, it seems a fairly high number to me so I’m just trying to understand how that will trend going forward.

Well, that represents interest expense. There’s no losses from any other kinds of transactions in there. It should trend the same, depending on interest rates. Of course, we’ll looking at overall how to restructure that debt.

Okay, fair enough. And then Sehat, maybe one for you; on the Bluetooth, you talked about potential design wins. Do you anticipate anything in the near term or is it more of a longer term opportunity for you? Thank you.

Yes, I will say more of a middle term opportunity. Our sales and marketing are just busy working with potential customers.

Thank you.

Your next question comes from the line of David Wu with Global Crown Capital. Please proceed.

I was interested in one clarification and one quick question; the clarification is that with the hard drive business in a seasonal up trend, that usually carries very rich gross margins and I was wondering, there must be a big differential between the consumer and the PXA business growth relative to the hard drive growth to drive gross margin to just a little over 48%. Am I correct in that assumption? And the follow-on is actually on, Sehat, I hear from these stories that you’ve been hiring in Taiwan to support your cell phone business, application engineers. I was wondering, do you have expectation of major wins in Taiwan OEMs for base band, in addition to application processors any time soon?

Let me answer the second part first. As you probably are aware, we also mentioned that we have a large number of design wins on the application processor, as well as the base band cell phone application processors -- cell phone base band communication processor, which integrates the application processor together with the base band. So one of the key things to make the customer happy is for us to serve them with appropriate application supports. These products are very complex, so we do have a large number of people that work in the application support, and whether it is in Taiwan or as well in other parts of the, in the U.S. as well as in other countries. We do expect those businesses to announce some major design wins down the -- but I’m not so sure whether we can announce the names in some cases, but we are actively engaged in many, many different areas.

I was wondering whether I was going to wake up one day and see the kind of thing that we saw out of Nokia with other tier one OEMs.

It is still early to talk about real major design wins at this point, I mean, additional major design wins, and super major I suppose we could call it. But our technology is world class so it is just a matter of time before we get additional super major design wins. With regard to the margin, in general our product margins, in general our target gross margins is around, long-term gross margin is around 50% or so. There will be products that will be slightly higher than 50%. There will always be products that will be slightly lower than 50%. I am not going to make comments on which products are more than 50% or which products is less than 50%, but we manage our business so that, depending on the level of investment we have to do, depending on the competitiveness in the market to adjust our -- to keep track, to compete in the market, but we are comfortable that we will, down the road as things stabilize, we will be able to achieve the 50% gross margin on average.

Okay, so just to clarify this point you made; the build up on expenses to support design wins in the cell phone business is not dependent on any time soon that you are going to hit a major jackpot, like in the situation of certain companies and Nokia? Did I read you correctly?

We don’t just focus -- we don’t -- I guess the answer is we did not just focus on addressing the large potential design wins but we also focus on the middle volume design wins and middle volume design wins require more support because you have more customers to support. So maybe the answer to that is because we have more customers to support.

Okay. Thank you.

Your next question comes from the line of Shaw Wu with American Technology Research. Please proceed.

Thanks. I’m just trying to understand the gross margin guidance better. You had a mix this quarter towards WiFi and PXA and then your gross margin expanded 50 basis points sequentially. From what I understand, that business is expected to continue to be strong and then your storage business I guess historically has been a higher margin business. I’m just trying to reconcile, why is the gross margin going to decline so much sequentially, even though it seems like the -- I’m just trying to understand what caused the strength this quarter and what is the big change in the October quarter? Thanks.

You know what? As Sehat said, that we have some products with higher margin, some products with lower margins -- we aim for the 50% margin and sometimes when we do have a decline in margin, it might turn out to be a particular product under a particular contract or circumstance, and the mix winds up at that rate and that’s what we calculate it will be for Q3.

Just to clarify, why were margins up sequentially? What drove that?

You mean in Q2?

Yes, from Q1 to Q2, I guess the non-GAAP operating margin -- I’m sorry, non-GAAP gross margin actually expanded a bit. I’m just trying to understand what was behind that.

Well, our product mix was a little bit different during the quarter and represented a higher gross margin percentage.

Your next question comes from the line of Adam Benjamin with Jefferies. Please proceed. Blayne Curtis - Jefferies & Company: Thanks. This is Blayne Curtis for Adam. I was hoping to take another cut at this net interest question. My understanding is on the debt, you are paying about $7.6 million a quarter, and you have $500 million in cash, so you should be getting some interest rate on that. Is there another piece of the equation that I’m missing?

No. We have -- let me see. That amount is net of our interest income. Blayne Curtis - Jefferies & Company: Right, so if in Q2 you lost -- or you paid $6.8 million, you are not earning -- you are earning less than $1 million on that cash. I’m just trying to understand the math.

We have to look into that.

Yes, I have to. Let me -- I have to look at that and I would be glad to talk to you about it offline. Blayne Curtis - Jefferies & Company: Okay, if you could just give me a call later. Thank you.

Your next question comes from the line of Louis Gerhardy with Morgan Stanley. Please proceed.

I just wanted to ask you about the inflection you’ve seen in the HDD business. Maybe you could talk about it, different form factors and given that business has really underperformed the drive market over the last year, are you just seeing a seasonal type of recovery in that area or any signs of something more than that?

I do believe it is a seasonal recovery. Last quarter, I think the industry probably a little bit more conservative in terms of building inventories and this quarter, they are probably at the level that inventory is probably too low. That’s in general. Specific on our side, I think our customers are winning market share in general compared to the rest of the market. So it’s a combination of the two probably is what caused our revenue to increase in Q3.

Okay, thanks. And then I just wanted to ask you about Tavor -- which applications are you really targeting here? And just maybe talk about some of the design wins that you’ve landed and when can we start to see material revenue contribution from that?

Sure. Tavor is, for those people that haven’t heard, Tavor is the code name for the by-step integrate the HSDPA 3G base band together with the high performance application processors. Tavor is targeted for those people that want to move to 3G -- I mean, toward those smartphone customers, they are moving to, going to 3G and you are probably aware that more and more of the carriers are asking the phone suppliers to deliver 3G solutions as the carriers are starting to build up their 3G networks. So in terms of where the volume is starting to matter more, it will be sometime in the second half of next year and we will build up from there, as the industry switches from 2G to 3G.

Thank you.

Your next question comes from the line of Romit Shah with Lehman Brothers. Please proceed.

Thanks a lot. When you talk about normal seasonality in your storage business, should we be thinking of sequential growth in the mid-single digit range?

Would you please repeat that question?

Could you quantify what you mean by normal seasonality in your storage business?

What I mean by that is that typically the storage industry, Q1 and Q2 are seasonally down and Q3 and Q4 are seasonally up. Typically that is what happens in the storage industry. The industry tends to build just in time, so we deliver our parts on a daily basis to customers, so the industry only just builds when the demand is up. Typically it is up during the return to school and the Christmas holidays.

When you say that the business will be up in the third quarter, should we be thinking low single digit growth, high single digit growth?

I don’t have that number with me.

Okay, and then just one question on the one-time benefit to operating margins, the $5 million, was that included in the non-GAAP operating margin?

Yes, it was.

Okay. Thank you.

Your next question comes from the line of Harsh Kumar with Morgan Keegan. Please proceed.

Can you help me out real quick -- the combined chip DSP plus application processor, I think you said you are sampling it right now or when can we expect commercial shipments of that product?

We are talking about Tavor, so it is -- well, actually I guess to be precise, the combination of base band DSP with application processor has been shipping for many years in the different family or product which is called Hermon, so the Tavor, which includes the more advanced 3G as a solution, that is the one that is going to ship -- that is the one that we’ve been sampling for the last year or so, that we’ve been sampling to customers. Customers have been working in their labs to -- we’ve been helping them to port all the different software. Different customers may require different Linux operating systems, some customers will prefer to have Windows Mobile operating systems. So we’ve been busy working with these customers for the last one year and we expect production to be sometimes ramping up starting next year.

Okay, and then a quick -- thanks, Sehat, for that clarification -- a quick housekeeping question: can you break down the consumer versus the enterprise revenues, as you have in the past?

We didn’t have time to sit down to look at that. I apologize for that. We will get you this next quarter.

Fair enough. Thank you.

Your next question comes from the line of Craig Berber with Wedbush. Please proceed.

Good afternoon. When you look at the cell phone business, what is the goal in terms of gross margins there? Is it a 40% gross margin kind of business out in time or can you do better than that?

Obviously due to the limitation that we have when we acquired this business from Intel, the gross margin is going to be impacted in the beginning but in the long run, our plan is to design more advanced process technologies, as well as to have more features so that we can charge higher prices for those new feature phones, even higher feature phones, as well as building higher performance processing, process capabilities. We think that the margin probably will be slightly lower than -- in the long run, it will be slightly lower than 50%.

Are you guys still on track to exit the year at $150 million in revs this year and $200 million in revs next year in that business? Are you tracking ahead or behind of that goal?

I don’t think we go that much in detail but I can -- I think what we can say is we are happy that we, that the communication processor business is going to be a growing piece of our business. I can tell you the trend is that we want to be -- we want to make all our revenues in that business to be as much as possible to be in the communications part of the, the highly integrated communication part of the business. And there will always be customers that will be buying standalone application processors, but our goal is to get more revenues on the integrated portions.

Can you guys comment on your CFO search status, when you might expect to have someone on a more permanent basis?

Yes, we have retained a search firm, as you might know, and we are currently interviewing candidates and we hope that we might have one on board in the very near future.

Last question; while your income is low, you pay a certain amount of base taxes. What is the amount of base taxes and what’s the marginal tax rate? And if you know the base number of income, that would be helpful.

I really don’t think I can get into that level of detail on this call. I would be happy offline to explain it to you in more detail.

Thanks. Good luck.

At this time, this concludes our Q&A session for today. On behalf of Marvell Technology Group, thank you for attending today’s conference. This concludes the presentation. You may now disconnect and have a great day.