Marvell’s Data Center Strategy Behind Its $1.1B Acquisition of Innovium
In yet another move for cloud dominance, Marvell is merging with Innovium for its in-house Ethernet switch silicon.
This week, Marvell Technology acquired Innovium, a startup known for its switch silicon and software, for $1.1 billion. This latest acquisition is yet another move for Marvell to rapidly expand its cloud technology, specifically with new Ethernet switches. Last year, in fact, All About Circuits reported on Marvell's major purchase of Inphi Corp. for $10 billion.
The place of Marvell's current Ethernet switches in a data center ecosystem. Image used courtesy of Marvell Technology
What about Innovium appealed to the major semiconductor manufacturer in the first place?
Innovium’s Suite of Ethernet Switches
Innovium largely focuses on data center and networking silicon, the most sought-after offering being its Ethernet switches. Specifically, Marvell cites Innovium’s TERALYNX suite as a major draw in its acquisition.
The TERALYNX architecture. Image used courtesy of Innovium
TERALYNX is Innovium’s family of in-house, proprietary Ethernet switches, which are said to offer a combination of scalability, low latency, and high power efficiency. Innovium claims that this suite can:
- Support throughput as high as 25.6 Tbps
- Offer industry-leading radix
- Achieve up to two times the performance per watt compared to competitors
- Provide extensive telemetry for actionable analytics
These features vaulted Innovium to recognition in the merchant cloud industry. According to the company website, Innovium has more than 25 design wins with leading OEMs and ODMs, including deployment and trials at the majority of the top 25 cloud and edge companies.
In Marvell's press release, the company estimates that Ethernet switches within the data center market will expand to $2 billion by 2026. For Marvell, the merger was a vital maneuver to complement the company's own Ethernet offerings, thus expanding its reach in the cloud data center market.
Marvell expresses optimism that the new dedicated switch architectures from Innovium will bolster its position in the 5G, cloud, enterprise, and automotive end markets. Marvell also anticipates that adding Innovium's portfolio of Ethernet switch silicon to its own offerings will bring in an additional $150 million of revenue over the next year.
TERALYNX use cases. Image used courtesy of Innovium
Innovium also saw the merger as mutually beneficial.
In a company statement, Innovium's CEO and founder Rajiv Khemani cast the unification as an opportunity to increase the scale and breadth of market share. "This combination will enable Marvell to drive two dedicated R&D efforts," Khemani explains. "TERALYNX for the cloud data center switching market, and Prestera for the enterprise, carrier switch and related markets."
Together, Marvell and Innovium hope to bring their existing technologies to important market segments including cloud-scale data centers, enterprise networks, and 5G.
Terms of the Deal
The two companies anticipate the deal to close near the end of 2021. In the meantime, Marvell Technology and Innovium will function as two separate companies. Once the merger is complete, Marvell will begin leveraging Innovium’s IP (namely, TERALYNX and Prestera) while Innovium taps into Marvell’s engineering and financial resources.