Fellow Fool Rich Smith has a soft spot for chip designer Marvell Technologies (Nasdaq: MRVL). He recently shouted out his support from his All-Star CAPS platform: "Cheap P/FCF ratio. Cheaper EV/FCF ratio. Superb, double digit growth estimates. Marvell's too cheap by half."

This week's fourth-quarter report didn't change that situation at all. Marvell reported earnings of $0.21 per share, 17% above analyst consensus estimates. Sales swooned 18% year over year to $743 million, again ahead of Wall Street's targets.

The outperformance gets even more impressive when you consider the headwinds blowing in Marvell's face:

  • Smartphone sales in China aren't growing as fast as you might expect, and that hurts Marvell's sales of China-specific 3G and 4G communications chips.
  • Smartphone sales were tremendously strong leading up to the holidays, but handset makers scaled back their chip orders faster than usual afterwards.
  • Flooding disasters in Thailand decimated orders for hard drive controllers, since that industry passes about 40% of its unit sales through factories around Bangkok. Those chips account for about 40% of Marvell's sales at today's disaster-stricken levels.

The hard drive market is particularly important. Marvell's revenue should bounce back strongly in 2012 as its largest market recovers. This recovery will mirror drive-building giants Seagate Technologies (Nasdaq: STX) and Western Digital (NYSE: WDC) to a large degree, but will actually happen before Seagate and WD recover to full health. Those controller chips need to be ordered well before you build a drive around it.

According to CEO Sehat Sutardja, Marvell really only has one serious rival in that particular market, that being LSI (NYSE: LSI). The flooding may even have increased Marvell's market share, or accelerated an ongoing shift. With much of the old manufacturing equipment on the fritz, Sutardja believes that the drive makers are gearing up for new processes ahead of schedule, often designed around supply contracts signed with Marvell years ago.

In the words of Kelly Clarkson, what doesn't kill you makes you stronger. Marvell is coming out of this setback with flying colors, ready to capitalize on market share shifts, renewed Chinese smartphone interest, and the proliferation of smart, Internet-connected consumer electronics. "The future is everything smart, smart TV, smart set-top boxes, smart everything, smart appliances, smart -- whatever it is that you want," Sutardja said. "Everything that you have in the smartphones, multiply that by many times performance to fit in the display size of a TV."

Sounds like Marvell just found a way to multiply the trillion-dollar revolution in mobile computing. Read up on that excitingly investable trend in this free report, then decide for yourself if this CEO's big dreams could be realistic. Meanwhile, Rich and I will keep feeding Marvell chips to our all-star CAPS portfolios. These bullish CAPScalls should reward us with fat scores in the long run.