Key Highlights

  • Marvell Technology (Nasdaq: MRVL) switch Revenue exceeded $300M in FY26 and is expected to surpass $600M in FY27, doubling year-on-year.
  • Scale-out switch revenue is tracking toward $1 billion in FY28, representing a potential tripling from FY26 levels over two years.
  • Marvell launched the industry's first 260-lane PCIe 6.0 Switch for AI data centre scale-up infrastructure in March 2026.
  • Multiple tier-1 customer engagements are underway for scale-up switching, representing a new addressable market beyond scale-out.
  • Marvell is also entering the CXL switching market through the XConn Acquisition, adding a third switching revenue stream.

 

Analysis

Switching is one of those product categories that receives disproportionately little attention from investors relative to its strategic importance. Every data centre needs switches — devices that route data packets between servers, between racks, and between facilities. In a traditional enterprise data centre, the switch market is mature, competitive, and Margin-thin. In an AI data centre, where the requirements for bandwidth, latency, and programmability are an order of magnitude more demanding than conventional workloads, the switch market is being rebuilt from the ground up — and Marvell Technology (NASDAQ: MRVL) is one of the companies doing the rebuilding.

 

The Revenue Trajectory

The numbers management has disclosed are striking in their clarity. Switch revenue exceeded $300M in FY26. It is expected to surpass $600M in FY27, implying year-on-year growth exceeding 100%. It is tracking toward $1 billion in FY28. This is a Business doubling and then doubling again over a 24-month window — a trajectory that, if delivered, makes the switching segment one of the fastest-growing at scale in the semiconductor industry.

 

To contextualise: $300M in FY26 represented roughly 3.7% of total revenue. At $1 billion in FY28 on a total revenue base approaching $16.5 billion, switching would represent approximately 6% of revenue — meaningfully larger in absolute terms, and growing faster than the company average. For a quality investor, the important question is whether this growth is driven by Volume, by pricing power, or by both. The architecture transition from 400G to 800G ethernet switching, combined with the introduction of proprietary AI-optimised switching protocols, suggests that this cycle is not purely volume-driven.

 

Scale-Out and Scale-Up: Two Different Markets

The Q1 FY27 Earnings materials introduced an important distinction between scale-out and scale-up switching. Scale-out refers to traditional ethernet switching that connects servers within and between racks in a conventional topology. This is the market where the $300M to $600M to $1 billion trajectory is primarily located. Scale-up refers to a new category of switching that operates within AI Training clusters, connecting GPUs to each other through ultra-low-latency, ultra-high-bandwidth fabrics that are architecturally different from conventional ethernet.

 

In March 2026, Marvell launched the industry's first 260-lane PCIe 6.0 Switch for AI data centre scale-up infrastructure. This is a genuinely novel product — PCIe 6.0 at 260 lanes pushes the theoretical bandwidth envelope far beyond what prior-generation switches could offer. Management noted in Q1 FY27 that multiple tier-1 customer engagements are underway for scale-up switching, which suggests that commercial validation of this product is in process rather than aspirational.

 

CXL: The Third Switching Leg

The XConn acquisition adds a third switching revenue stream: CXL memory switching. While scale-out switching connects compute nodes and scale-up switching connects GPUs within training clusters, CXL switching connects processors to memory pools across a shared fabric. The CXL switch market is nascent but growing rapidly as the industry converges on CXL as the standard for disaggregated memory architectures. In March 2026, Marvell launched its next-generation CXL switch enabling memory pooling to address what it described as the AI 'memory wall.'

Three distinct switching revenue streams — scale-out ethernet, scale-up PCIe 6.0, and CXL memory fabric — each at different stages of the S-curve and each growing simultaneously. For a long-term investor, this is the kind of multi-vector growth opportunity that creates durable compounding over a five to ten year horizon, provided management executes on the product roadmap and converts the tier-1 customer engagements into production revenue.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. All data is sourced from Marvell Technology's official earnings presentations (FY26 Q4 and Q1 FY27). Investors should conduct their own Due Diligence before making Investment decisions.