** Brokerage Melius Research downgrades chipmaker Marvell technology MRVL.O to "hold", sets PT at $66

** PT still implies 9.8% upside to the stock's last close

** Brokerage previously expected Marvell to do well due to its custom silicon business, but now thinks this may not happen

** Flags concerns about Marvell's role in Amazon's AMZN.O and Microsoft's MSFT.O custom accelerator projects, and potential competition from other companies

** Brokerage expects Marvell's optical AI business to do well, but thinks this may not be enough to offset issues in other areas

** Says MRVL's legacy businesses, such as industrial, telco, and enterprise networking, are in decline, but may see a modest recovery

** As of last close, MRVL stock down 45.6% YTD

(Reporting by Padmanabhan Ananthan)

((Padmanabhan.Ananthan@thomsonreuters.com))