Your browser is not supported. Please update it.

9 August 2021

Marvell targets Broadcom with acquisition of switch-chip maker Innovium

Marvell has been assembling a full 5G- and cloud-oriented portfolio for several years now, through development and acquisition, and offers solutions ranging from high end cloud processors capable of supporting virtualized RANs, to RAN acceleration platforms and small cell processors. That has placed it in the race with Intel, especially in the context of vRAN and Open RAN infrastructure, but its latest acquisition, of switch-chip vendor Innovium, also brings Broadcom into its sights.

Broadcom does not play directly in the RAN processor field but it is hugely powerful in conventional and white box switching platforms. So the $1.1bn in stock that Marvell has paid for Innovium will fill a gap in its growing line-up and help it compete more effectively with Broadcom.

Innovium was founded in 2014 and has raised $402.3m in venture capital funding. In those seven years, it has won almost 30% of the merchant silicon switching market with its Teralynx ASIC portfolio.

The latest generation, Teralynx 8, was unveiled last year and boasts throughput up to 25.6Tbps, and a large customer base including some Cisco appliances. This will be a high end complement to Marvell’s existing switch-chip family, Prestera.

Guy Azrad, general manager of Marvell’s networking switch business unit, said: “In Marvell Prestera switches we were very focused on feature-rich switches.” But there was clearly  an emerging need for a dedicated architecture for high end clouds and cloud-based networks that required very fast throughput and low latency switching.

Talking to SDxCentral, Azrad made a direct comparison with Broadcom’s portfolio, saying: “Innovium is becoming our Tomahawk line and Prestera is our Trident line. We think that with this acquisition we can actually run very fast in the cloud and the data center and, of course, we’ll keep investing on the enterprise and carrier.”

The new acquisition will also complement the opto-electrical interconnect technology that Marvell acquired with its $10bn purchase of Inphi in late 2020. “Combining Marvell’s copper Ethernet PHY franchise with the Inphi electro-optical portfolio will create an industry-leading, high speed data interconnect platform, serving the enterprise, carrier, data center and automotive markets,” Marvell said at the time.

Zeus Kerravala, principal analyst at ZK Research, said the new deal was a “great move for Marvell as it gives them a credible threat to try and chip away at Broadcom’s lock in the hyperscale market  …Broadcom has had a near monopoly in the high end data center switch market, has grown arrogant, and is difficult to work with.”

Marvell estimates the switch-chip market will grow to $2bn, at a 15% CAGR, by 2026.

It expects Innovium to deliver $150m in incremental revenue as early as the 2022 calendar year partly thanks to a recent contract with an unnamed “Tier 1 cloud provider”.

Innovium CTO and founder Puneet Agarwal will join Marvell, while the company’s CEO Rajiv Khemani will serve as an advisor to Marvell once the deal closes.

This is the latest in a string of acquisitions to build Marvell up as a full-portfolio chip supplier for cloud, 5G and carrier network applications. In 2017 it paid $6bn for Cavium and gained a data center processing and security platform to join its original core business in storage controllers and networking and wireless connectivity chips.

In 2019, it bought the Avera ASIC business from GlobalFoundries for $650m, and Aquantia for $450m. Avera became the Marvell custom ASIC business, which focuses on very high performance customized chips for cloud data centers, 5G and automotive. Aquantia brought high speed Ethernet connectivity. Then Inphi followed in late 2020 – the most expensive deal at $10bn. That acquisition closed in April.