Marvell Tech to acquire chip tech startup Innovium for $1.1 billion to bolster its share of networking chips in the cloud data center market

Marvell Technology, a Broadcom rival and one of the leading companies in infrastructure semiconductor solutions, on Tuesday announced it has agreed to acquire chip startup Innovium in a $1.1 billion all-stock deal aimed at bolstering Marvell’s share of networking chips sold to large cloud-computing companies.

The acquisition will help Marvell to take on its rival Broadcom, which currently dominates the semiconductor market for chips that go into the switches that help move digital information around inside massive data centers owned by big cloud players like Amazon Web Services (AWS), Microsoft, and many others. Unlike Broadcom, however, Innovium’s chip sits at the heart of the switches and competes directly against Broadcom. The transaction is expected to close in the first full quarter.

As you may recall last month, we wrote about Innovium last month after it scored $170 milling in new funding for next-generation cloud data center networks,  making the 7-year old startup a member of the highly coveted unicorn club.

“Our acquisition of Innovium and its complementary offerings further extends Marvell’s leadership in the cloud, and I am excited that Innovium has secured significant share at a marquee cloud customer,” said Matt Murphy, President and CEO of Marvell. “Innovium has established itself as a strong cloud data center merchant switch silicon provider with a proven platform, and we look forward to working with their talented team who have a strong track record in the industry for delivering multiple generations of highly successful products.”

Founded in 2014 by Rajiv Khemani, Mohammad Issa, and Puneet Agarwal, Innovium is a leading provider of high-performance, innovative switching silicon solutions for Cloud and Edge data centers. Innovium’s TERALYNX family delivers software compatible products ranging from 1Tbps to 25.6Tbps with unmatched telemetry, low latency, programmability, and large buffers, and feature-rich architecture that scales to 100Tbps+.

“The Innovium vision is centered on delivering breakthrough switch silicon and choice for next-generation cloud and edge data centers. Bringing technology leadership and customer-focused innovation to the market is what drives our team every day,” said Rajiv Khemani, CEO and Founder of Innovium. “I want to recognize and thank our valued employees for their passion, commitment, and outstanding execution. We are excited to join Marvell and accelerate the growth of our business, partnerships, and solution value, while contributing to the company’s fast-growing cloud opportunity.”