Chipmaker NXP Semiconductors is set to buy Marvell Technology Group’s wireless connectivity business for $1.76 billion in cash.
NXP Semiconductors aims to sell Marvell’s connectivity products such as WiFi and Bluetooth along with its edge computing platforms to its clients in industrial, automotive and communication infrastructure markets.
Marvell Technology generated revenue of $300 million from wireless connectivity business in fiscal 2019. NXP aims to double that revenue by 2022.
“NXP had been underinvesting in WiFi for the last few years, as it had assumed it would be able to access Qualcomm’s WiFi technology, but in mid-2018, the deal collapsed,” said PiperJaffray analyst Harsh Kumar.
Chipmaker Qualcomm agreed to buy NXP in 2016 but walked away from the $44 billion deal last year after failing to secure Chinese regulatory approval.
The deal with Marvell will help NXP, which makes a range of chipsets for industrial and automotive customers, to cross-sell Marvell’s products to its clients.
For Marvell, a sale of its connectivity business made strategic sense as it is focusing more on the network equipment market following its $6 billion acquisition of Cavium in 2017.
The acquisition includes Marvell’s Wi-Fi and Bluetooth technology portfolios and related assets. The business employs approximately 550 people worldwide.
Matt Murphy, CEO of Marvell, said: “This transaction yields a premium valuation and substantially higher economic return for Marvell.
The US-based Marvell said it aims to accelerate it transformation into a leading infrastructure supplier spanning 5G, data center, enterprise and automotive Ethernet applications.
Marvell on May 20 announced its deal to buy Avera Semiconductor, the Application Specific Integrated Circuit (ASIC) business of GLOBALFOUNDRIES, for $650 million in cash.
This acquisition brings together Avera Semiconductor’s custom design capabilities with Marvell’s technology platform and scale, creating a leading ASIC supplier for wired and wireless infrastructure.
The agreements include transfer of Avera’s revenue base, strategic design wins with leading infrastructure OEMs, and a new long-term wafer supply agreement between GLOBALFOUNDRIES and Marvell.
Meanwhile, Cypress Semiconductor is exploring options, including a potential sale, after receiving takeover interest, Bloomberg reported on Wednesday.