Marvell Technology Group Ltd. (NASDAQ:MRVL) Q3 2020 Earnings Conference Call - Final Transcript
Dec 03, 2019 • 04:45 pm ET
[Operator Instructions] Our first question comes from the line of Vivek Arya of Bank of America. Your question, please.
Thanks for taking my question. Matt, a few quarters ago, you gave $600 million long-term opportunity in 5G, what is the confidence in achieving that. And just what does that number look like now that Avera in the mix and I think, you highlighted some additional opportunities also in massive MIMO.
Yeah. Great, thanks, Vivek. So I think to answer your first question, we -- you're right. A couple of quarters ago, we articulated the $600 million number which was really the business that we had already secured design wins for. We still feel very good about that opportunity. And in fact, as we indicated in the prepared remarks, there's even been some some incremental change to that on the positive side as we transition at least one of our customers to a higher ASP product in the massive MIMO area. So that tends to be tracking well in terms of the design opportunities and our customer positioning.
So we're quite confident there. On Avera, what we said was about half their revenue was from the wireless infrastructure market and base stations , of which a portion of that is tied to 5G and certainly, we see that contributing as well and that would be on top of the $600 million and I look forward to completing full quarter with Avera under our belt and then articulating the combined opportunity in the future, but it's definitely above $600 million just given the fact that Avera is bringing in pretty significant revenue in the base station market.
All right. And for my follow-up Jean, thanks for giving us the gross margin and the OpEx puts and takes. I was hoping, you could just for clarification, give us just the contributions of the different M&A moving pieces in your Q3 and Q4. So that we can align the models accordingly.
Yeah. Vivek, it's actually quite straightforward. If you think about our operating expense guidance for Q4, which include both Aquantia and Avera for the full quarter, which also include the Wi-Fi business. So moving forward, if we end up closing the Wi-Fi sale in our Q4, the way -- the best way to think about it is, I also guided you Q4 next year, the OpEx is going to be $300 million without Wi-Fi business. So a simple way to think about this. That's how we're going to migrate. We're going to have a merit and bonus increase reset in Q1 but we're going to absorb those increase by improving efficiency and achieving additional synergies. So you can largely view the difference between Q4 this year, and the Q4 next year.
It's the difference, it's the Wi-Fi business getting out.
I meant on the sales side, Jean, if you could give us the puts and takes in Q3, Q4 from you completed Aquantia in Q3, which added probably some small amount. And then in