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Marvell WiFi biz follows Quantenna into automotive

In the midst of an acquisition spree of its own, US semiconductor maker Marvell has sold its WiFi and Bluetooth businesses to NXP Semiconductor, which itself was on the verge of being engulfed by Qualcomm last year were it not for a swift desertion. Valued at $1.76 billion, the deal is the second significant acquisition of WiFi assets by a company associated more with IoT endeavors in as many months, following the purchase of Quantenna by ON Semiconductor in March for $1.1 billion.

As with the Quantenna deal, there is a heavy focus on automotive. NXP is tipped as the largest supplier of silicon to the automotive industry and will therefore bulk up its existing portfolio with the addition of WiFi 4, 5 and 6 technologies combined with Bluetooth/BLE, as well as edge computing capabilities and a new line of processors.

It suggests the demand from automotive industry players is one of adding multiple and varied connectivity options to vehicles, possibly driven in turn by growing apprehension about 5G network roll outs arriving on time, or indeed the untested technology’s reliability in delivering applications such as in-vehicle infotainment (IVI) systems.

Similarly to NXP, we understand the automotive sector to be ON Semiconductor’s largest business, in recent years getting involved in modular automotive imaging platforms, while wireless, industrial and consumer segments are all quickly growing segments for ON Semi. Notable acquisitions by the firm prior to Quantenna include the $2.4 billion purchase of Fairchild Semiconductor and a more modest $13 million for Axsem.

Marvell’s strategy on the other hand lies in pursuing an end-to-end chip platform for telecoms networks and data centers, agreeing just days prior to the NXP deal to acquire Avera Semiconductor, the ASIC (application specific integrated circuit) business of GlobalFoundries, for $650 million in cash, plus an additional $90 million depending on meeting future targets.

At scale and for the right tasks, ASICs can deliver better price/performance than general purpose silicon and can be used in a wider range of products, and there is expected to be rising demand for these semiconductors, driven by the rise of 5G and edge computing, which sees data being processed in a wider variety of locations.

This came only a few weeks after Marvell spent $452 million in cash on high-speed transceiver manufacturer Aquantia, citing in-car high-speed technology as a key deal breaker, as well as complementary copper and optical physical layer product offerings to expand in the multi-gigabit Ethernet segment. It’s unclear if any Aquantia assets are being sold to NXP as part of the deal but we suspect that is highly unlikely given the 39% premium Marvell just paid and besides Marvell claims it remains focused on growing demand for in-vehicle networking in the automotive sector, specifically for automotive Ethernet applications.

Marvell’s WiFi and Bluetooth division employs approximately 550 people worldwide and generated roughly $300 million in revenue in Marvell’s fiscal 2019. This transaction has been approved by the boards of directors of NXP and Marvell and is expected to close by Q1 2020, subject to customary closing conditions and regulatory approvals.

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