Marvell Hints at Tech Turnaround

(Updates stock prices throughout)

Chipmaker Marvell(MRVL Quote) offered a hint that the tech sector is poised to rebound Monday, raising its second-quarter revenue forecast.

The Santa Clara, Calif.-based firm now expects sales between $600 million and $630 million, compared to its earlier projection of $540 million to $580 million.

As a key component manufacturer, Marvell's improved outlook could bode well for the broader tech sector, which has suffered during the global economic slowdown.

"We are optimistic in our near-term outlook based on the improved order rate we have experienced so far in our second quarter," said Dr. Sehat Sutardja, Marvell's CEO. "We believe [this] generally signals some strengthening in our customers' expectations for their businesses."

Despite Marvell's positive outlook, shares of the company dipped 53 cents, or 4.4%, to $11.48, as the Nasdaq fell 3.35%. Rival LSI(LSI Quote), meanwhile, fared better as investors reacted to Marvell's forecast. The stock fell 7 cents, or 1.5%, to $4.49.

Marvell's stock was recently upgraded by JMP Securities thanks to the popularity of its flash memory controllers and demand from hard disk drive manufacturers. Storage accounted for more than half of Marvell's sales during its recent first quarter, and the firm also sells silicon for mobile handsets, PCs, switches and wireless networks.

"We are reiterating our positive outlook on MRVL following this upside surprise," wrote Avi Cohen, an analyst at Avian Securities, in a note released Monday, adding that the ripple effect will reach other parts of the tech sector.

Specifically, Cohen expects the upgrade to lift shares of hard drive maker Western Digital(WDC Quote).