Marvell Technology acquires XConn Technologies for $540M to strengthen AI infrastructure play

Marvell to buy networking equipment firm XConn in $540 million deal amid AI infrastructure push

Jan 6 (Reuters) - Marvell Technology said on Tuesday it will buy networking equipment provider XConn Technologies in a deal worth about $540 million, as the chipmaker doubles down on data center hardware amid a race to expand artificial intelligence infrastructure. XConn's acquisition will help the custom AI chipmaker (MRVL.O), opens new tab expand its networking portfolio - an essential fixture in AI data centers that helps connect different types of hardware across servers and is instrumental in determining the speed at which data can be processed. Marvell's shares rose more than 2% in early trading. Shares of the chipmaker fell more than 23% last year amid stiff competition from larger rivals Broadcom (AVGO.O), opens new tab and the world's most valuable firm Nvidia (NVDA.O), opens new tab, whose top-of-the-line networking equipment often accompanies its leading AI chips. Through the cash-and-stock acquisition, Marvell will also add XConn engineers with an expertise in certain networking devices to its team, the company said. The transaction amount will include about 60% cash, while the remaining stock portion will be valued at Marvell's 20-day volume-weighted average price. The chipmaker, valued at more than $76.52 billion, will issue around 2.5 million shares under the deal. "This combination creates a compelling switching platform for accelerated infrastructure, advancing Marvell's connectivity strategy for next-generation AI and cloud data centers," said Marvell CEO Matt Murphy. Switching generally refers to the process of data transfer across the data center. Marvell expects XConn products to add to its sales and profit in the second half of fiscal year 2027, ramping to about $100 million in revenue in fiscal 2028. Analysts expect Marvell to record $12.75 billion in revenue in fiscal 2027, according to data compiled by LSEG. The transaction is expected to close in early 2026. Reporting by Arsheeya Bajwa in Bengaluru; Editing by Leroy Leo Our Standards: The Thomson Reuters Trust Principles., opens new tab

Marvell buys network switching specialist XConn for $540M to boost its AI story - SiliconANGLE

XConn is a maker of interconnect switching technologies for artificial intelligence and data center infrastructure. The addition will help to strengthen Marvell's own switching portfolio, the chipmaker said. Switching is necessary to connect large numbers of AI chips into giant clusters, so they can work together to run powerful large language models. Shares of Marvell rose more than 4% on news of the acquisition, which will also see the company add XConn's engineering teams to its own networking unit. The deal will help to fuel Marvell's efforts to improve its AI infrastructure story and make its custom AI processors a more compelling story for data center operators such as Amazon Web Services Inc. Marvell was once seen as one of the most promising bets outside of Nvidia Corp., and many experts believed it was primed to become a major beneficiary of the AI boom. But that hasn't happened. While Marvell's business has grown over the last three years, it has struggled to match the momentum of Nvidia or another key rival, Broadcom Inc., which also makes custom AI processors on behalf of large companies. Marvell has been trying to change that story through acquisitions. Last month, it swooped to buy the optical interconnect technology firm Celestial AI Inc. for $5.5 billion. Optical interconnects are becoming essential in AI, because they enable clusters of AI accelerator chips to communicate with each other with sub-second latencies - much faster than traditional data center interconnects. The acquisition of XConn adds another piece of the puzzle, for its switches can likely be paired with Celestial AI's optical interconnects to help Marvell build larger clusters of "XPUs", which are the customized AI processors it develops for data center operators such as AWS. "This combination creates a compelling switching platform for accelerated infrastructure, advancing Marvell's connectivity strategy for next-generation AI and cloud data centers," said Marvell Chief Executive Matt Murphy (pictured). "Combined with the pending acquisition of Celestial AI, we will be well positioned to deliver customers the performance, flexibility and architectural choice they need as AI systems grow in size and complexity." Ultimately, the acquisition will help Marvell to better compete with Broadcom. While Marvell is known to develop XPUs for AWS, its rival is thought to be developing chips for at least four different hyperscalers, and it has sold many more of them over the past couple of years. Marvell is really playing catch up, and it needs to offer a more compelling product. XConn will hopefully enable it to do that. The acquisition will also help to bolster Marvell's finances. The chipmaker said it expects XConn to contribute around $100 million in revenue in fiscal 2028. The deal is expected to close early this year, subject to regulatory approval.

Why Is Marvell Technology Stock Gaining Tuesday? - Marvell Tech (NASDAQ:MRVL)

Marvell Technology, Inc. (NASDAQ:MRVL) stock rose Tuesday after the chipmaker announced an acquisition aimed at strengthening its position in AI and data center connectivity. Marvell agreed to buy XConn Technologies to strengthen its switching silicon lineup, adding expertise in advanced PCIe and CXL switch products. Marvell said the deal will expand its Ultra Accelerator Link switch portfolio and add experienced switching engineers. Also Read: Goldman's 2026 Call: S&P 500 To 7,600 -- But Valuations Are The Wild Card Transaction Terms And Timeline Marvell will pay about $540 million using a mix of cash and stock. The structure calls for roughly 60% cash and 40% stock priced off Marvell's 20-day VWAP. The stock portion should equal about 2.5 million Marvell shares. Marvell expects to close the deal in early 2026, pending approvals and standard conditions. Why It Matters For AI Data Centers As AI workloads scale, data center designs are moving beyond single racks into multi-rack systems. These newer architectures demand high bandwidth and ultra-low latency connections across many accelerators. UALink is an open standard aimed at scale-up connectivity across large accelerator clusters. The standard builds on PCIe ecosystem advances and targets next-generation performance and reach needs. Matt Murphy, chairman and CEO of Marvell, said the combination strengthens Marvell's connectivity strategy for AI and cloud data centers. Murphy said XConn also complements Marvell's pending Celestial AI acquisition. Gerry Fan, CEO of XConn, said the companies share a view that high-speed connectivity underpins modern data centers. Product Roadmap And Revenue Outlook XConn's PCIe 5 and CXL 2.0 switches are in production today. Its PCIe 6 and CXL 3.1 products are sampling now with customers. Marvell expects revenue contribution to begin in the second half of fiscal 2027. The company expects XConn to become accretive to non-GAAP earnings then. Marvell projects the business could reach about $100 million revenue in fiscal 2028. MRVL Price Action: Marvell Tech shares were up 3.32% at $93.23 at the time of publication on Tuesday, according to Benzinga Pro data. Now Read: Nvidia Takes On Robotaxis With Chips, Software And Big Ambitions Photo via Shutterstock MRVLMarvell Technology Inc$93.763.91%OverviewMarket News and Data brought to you by Benzinga APIs