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Marvell to Acquire Avera Semiconductor from GlobalFoundries

Marvell on Monday announced that it had entered into agreement to buy Avera Semiconductor from GlobalFoundries. The acquisition will bring additional chip design capabilities to Marvell and will enable it to develop a wider range of products. In particular, the company says that that the takeover will help it to strengthen its position as a leading supplier of infrastructure semiconductor solutions. Meanwhile the deal also sees Marvell signing a wafer supply agreement with GlobalFoundries.

GlobalFoundries spun off its ASIC Solutions division (which it got from IBM) into Avera Semiconductor in November 2018. The business unit helps chip designers to develop semi-custom of full-custom chips. Avera employs about 800 engineers and has a comprehensive portfolio of silicon-proven IP, including Arm cores, performance and density-optimized SRAMs, embedded TCAMs, high-speed SerDes, interfaces, and other useful IP. In particular, Avera has design experience in fields such as analog and mixed-signal and SoCs for switches, routers, and other devices. Right now, Avera is developing several projects for next-gen datacenters.

Marvell will pay GlobalFoundries $650 million in cash at closing (by the end of Marvell’s fiscal year 2020) plus an additional $90 million in cash if certain business conditions are satisfied within the next 15 months. The contracts involve handing over Avera’s revenue base, strategic design wins with infrastructure OEMs, and a long-term wafer supply agreement between GlobalFoundries and Marvell.

Since Avera used to work exclusively with customers of GlobalFoundries, the vast majority of its IP blocks were designed for GlobalFoundries’ process technologies. So Marvell signing a long-term supply agreement with GlobalFoundries makes sense for both companies, as Marvell is going to be using GlobalFoundries capacity anyhow.

With addition of Avera engineers and IP, Marvell hopes to address (among other markets) custom ASICs aimed at base stations, which will have positive effects on its revenue and profitability.

Overall, selling off its Avera business is part of a greater reshaping of GlobalFoundries. As the company has ceased development of cutting-edge process nodes (7nm+) and shifted to specialty process technologies, its client base and business needs are shifting as well.

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Source: Marvell