Marvell Technology, a specialist in infrastructure semiconductor solutions, has acquired Innovium, a provider of networking solutions for cloud and edge data centres, in an all-stock transaction.
Marvell has an extensive portfolio of Ethernet switch semiconductor solutions with a growing position in the enterprise and carrier segments it services. Given Marvell’s growing momentum in the cloud data centre market, which was further enhanced with the recent acquisition of Inphi, developing dedicated high radix, performance optimised switch silicon for use in hyperscale data centres is of increasing strategic importance to the firm.
Innovium’s Teralynx switching architecture is said to deliver the ultra-low latency, optimised power, high performance and innovative telemetry that are critical in today’s cloud-scale data centres. The company has been working to cement its position as a supplier in the merchant cloud semiconductor switching market. The acquisition of Innovium allows Marvell to immediately participate in the fastest growing segment of the switch market with a cloud-optimised solution.
Going forward, Innovium has been selected to become a significant supplier at a Tier 1 cloud customer, and this is expected to drive a significant revenue ramp in calendar 2022. In addition, Innovium is currently engaged with several other leading cloud data centre customers in building out their future network architectures.
By 2026, the data centre market for merchant Ethernet switch silicon is estimated to grow to approximately $2 billion at a 15% CAGR. Marvell’s scale and leading technology platform will enable the extended team to accelerate their roadmap in this large and fast-growing market.
The addition of Innovium is expected to provide Marvell with incremental engineering resources to focus on cloud optimised silicon through the Teralynx platform as the 9K product family, while continuing to drive its PresteraTM 2K to 8K product families for the enterprise and carrier switch market. Dedicated architectures could accelerate Marvell’s ongoing growth in the 5G, cloud, enterprise and automotive end markets, which all leverage Marvell’s Ethernet platform.
Marvell expects the acquisition of Innovium will enable the addition of approximately $150 million in incremental revenue next fiscal year.
The transaction is expected to be neutral to Marvell’s non-GAAP earnings per share in the first full quarter after the transaction closes, and accretive in the first full fiscal year thereafter.
Innovium CTO and founder, Puneet Agarwal, who has more than 20 years of experience in defining and architecting groundbreaking products, will join Marvell after close of the transaction. He will be joined by the talented team from Innovium who will continue to drive the cloud-optimised switch program within the combined company. Innovium CEO Rajiv Khemani will serve as an advisor to Marvell post close.
Matt Murphy, President and CEO of Marvell (pictured), said: “Our acquisition of Innovium and its complementary offerings further extends Marvell’s leadership in the cloud, and I am excited that Innovium has secured significant share at a marquee cloud customer.
“Innovium has established itself as a strong cloud data center merchant switch silicon provider with a proven platform, and we look forward to working with their talented team who have a strong track record in the industry for delivering multiple generations of highly successful products.”
Rajiv Khemani, CEO and Founder of Innovium, said: “The Innovium vision is centred on delivering breakthrough switch silicon and choice for next-generation cloud and edge data centers. Bringing technology leadership and customer-focused innovation to the market is what drives our team every day.
“I want to recognise and thank our valued employees for their passion, commitment, and outstanding execution. We are excited to join Marvell and accelerate the growth of our business, partnerships, and solution value, while contributing to the company’s fast-growing cloud opportunity.”
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