Marvell wraps $10B Inphi deal amid record semi merger streak

Marvell Technology finalized the acquisition of Inphi Corporation, a deal worth about $10 billion, amid a record merger climate for semiconductor companies.

Marvell said in a statement Tuesday that “the combination creates a U.S. semiconductor powerhouse positioned for end-to-end technology leadership in data infrastructure.”

The completion of the deal came earlier than expected, with Marvell saying in October it would close in the second half of 2021. Marvell will hold its first quarter 2022 earnings call on June 7 to discuss Inphi’s contributions to the quarter.

Marvell announced that Inphi’s CEO Ford Tamer has been appointed to the Marvel board, after serving nine years at Inphi. He has also been CEO of Telegent Systems and GM of Broadcom’s infrastructure networking group. He holds a PhD in engineering from MIT.

Inphi was known for making chips for storage and networking, but Marvell mainly wanted the company to sell semiconductors for hyperscale cloud data centers and 5G wireless infrastructure. 

“With the volume of data increasing to store it and move it around, you need silicon that is complex.” Raghib Hussain, chief strategy officer and executive vice president of networking and processors at Marvell, told Fierce Electronics last year. Marvell has needed much higher bandwidth data center interconnect modules that Inphi provides.

Copper-based interconnects can support up to 100 Gbps bandwidth, but Inphi has electro-optics interconnects that support up to 800 Gbps with a pulse amplitude modulation digital signal processor.

“We did not have a switching element for 5G but now will have the most comprehensive offering,” Hussain said. Marvell competes with Intel and Broadcom, among others.

Hussain predicted “huge room” for growth, noting that Google and Amazon are adding servers with the push for more work and learning at home placing more dependency on cloud data centers.

Optical interconnects from Inphi will also help Marvell prepare for future innovations such as 6G wireless, analysts said.

The announcement of the deal came just after AMD announced it would buy Xilinx for $35 billion, while Nividia announced in September it would pay $40 billion for Arm. Also in October, Intel announced the sale of its flash memory fab business to SK Hynix for $9 billion. And in July, Analog Devices announced it would pay $20 billion for Maxim Integrated Products.  Last spring, Nvidia acquired Mellanox Technologies for $7 billion.

Market dynamics have favored the consolidations with acquirers reaching peak market capitalization, which means the companies can leverage share price to pay for purchases. If an acquirer needs to borrow, money is at low interest. And on the demand side, companies want to acquire intellectual property to serve existing customers and find new customers.

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