Marvell Semiconductors has entered into an agreement to purchase Avera Semiconductor, the application specific integrated circuit (ASIC) business of Globalfoundries.
The agreement will transfer the custom ASIC business of Avera as well as a long-term wafer supply agreement and any design wins to Globalfoundries.
The acquisition continues a trend happening in 2019 where semiconductor companies are grabbing up other companies. According to market research firm IDC Corp., market consolidation is expected to continue this year and for the next few years, particularly in the sensor, connectivity, automotive and AI/computer vision markets.
Avera was previously part of IBM’s microelectronics business and has executed more than 2,000 designs. The company designs analog, mixed-signal and system-on-chips as well as an IP portfolio including high-speed SerDes, high-performance embedded memory and advanced packaging technology.
The deal will allow Marvell to expand its customer ASIC offerings using IP. The company has 5G silicon platforms that enable a wide range of digital processing including baseband, processors and Ethernet switches. As 5G has been rolled out live to certain cities in certain countries, Marvell said it has expanded its custom system-on-chips to address a broad portion of the 5G base station. These devices are designed to replace field programmable gate arrays (FPGA) with optimized silicon.
Likewise, Avera has provided custom products to be deployed in the radio head of a wireless infrastructure OEM for multiple generations. These types of crossover markets will expand Marvell’s main base within both wired and wireless infrastructure, the company said.
Marvel will pay Globalfoundries $650 million in cash with an additional $90 million in cash if certain business conditions are accomplished in the next 15 months. The deal is expected to close by the end of Marvell’s fiscal year 2020.
A key to the acquisition trend happening in 2019 is the forecast that the semiconductor industry will decline in revenues this year by 7.2%. One of the biggest acquisitions so far this year was Nvidia’s purchase of intelligent interconnect device and service maker Mellanox for $6.9 billion. However, many other smaller acquisitions have been happening all over such as Xilinx buying Solarflare, Intel buying FPGA maker Omnitek, Dialog’s purchase of Silicon Motion Technology and Taoglas’ acquisition of Think Wireless, an antenna maker for wireless systems inside vehicles.
