(Reuters) - Marvell Technology forecast first-quarter revenue in line with Wall Street estimates on Wednesday, but its shares plunged 14% in extended trading as it failed to excite investors who expected sharper AI-driven growth.

The demand and resulting shortage of AI chips have driven up the prices of Nvidia's AI processors. As a result, tech giants such as Microsoft, Meta Platforms, and Amazon.com are reducing their reliance on Nvidia by developing their own AI processors.

This strategic shift has benefited other chipmakers such as Marvell and Broadcom.

"The earnings print was generally ok, but I believe investors were expecting more given all the bullish data-points in the overall AI space and the ramp of custom ASICs (AI chips) with certain hyperscalers," said Tore Svanberg, analyst at brokerage Stifel Nicolaus and Co.

Marvell's data center segment reported a 78% rise in fourth-quarter sales from a year earlier to $1.37 billion, boosted by a surge in demand for custom AI chips from businesses looking to optimize their AI workloads.

The segment accounted for about 75% of Marvell's overall quarterly revenue.

The company forecast first-quarter revenue to be $1.88 billion, compared with analysts' average estimate of $1.87 billion according to data compiled by LSEG.

However, Marvell also reported a year-over-year decline in revenue for its enterprise networking and carrier infrastructure units, as customers in those end-markets reduced spending as they work through existing inventories.

Revenue at its enterprise networking segment declined 35% from a year earlier to $171.4 million in the fourth quarter, while its carrier infrastructure unit's sales dropped 38% to $105.8 million.