Chip supplier Marvell Technology has agreed to buy Inphi in a $10 billion cash-and-stock deal aimed at broadening Marvell’s business in data centers and 5G network infrastructure.
Marvell competes against Broadcom to supply chips that move data around on copper-based cables. Inphi designs chips that move data over fiber-optic cables hundreds of times faster than copper cables.
Companies such as Amazon.com, Alphabet’s Google, Microsoft and Facebook use Inphi’s chips for optical connections inside the massive data centers that power their online services.
Inphi has also won deals to help Microsoft string together its data centers with high-speed optical connections and to connect various parts of 5G networks.
“Data centers and 5G infrastructure are our two key markets,” Marvell CEO Matt Murphy said.
Last year, Marvell Technology Group has agreed to sell the Wi-Fi connectivity business to NXP Semiconductors in a deal valued at $1.76 billion.
The all-cash acquisition includes Marvell’s Wi-Fi and Bluetooth technology and related assets, and will allow the automotive industry’s biggest chip supplier to offer customers a range of options to connect devices to the internet.
The deal comes amid several tie-ups in the global semiconductor industry this year.
Advanced Micro Devices (AMD) said it would buy Xilinx in a $35 billion deal.
Nvida signed $40 billion deal to purchase SoftBank Group’s Arm. Analog Devices signed $21 billion acquisition of Maxim Integrated Products.
After the deal, Marvell shareholders will own about 83 percent of the combined company, with Inphi shareholders owning about 17 percent.
Marvell plans to use balance sheet cash and debt to fund the deal, taking on about $4 billion in new debt in connection with the transaction with financing commitments from JPMorgan Chase & Co.
While Marvell is headquartered in Silicon Valley, it’s currently domiciled in Bermuda. After the transaction, both Marvell and Inphi will become subsidiaries of a new U.S.-domiciled holding company. The deal is expected to close in the second half of 2021.