On April 8, it was reported by Asian Technology that automotive MCU giant Infineon has acquired Marvell’s automotive Ethernet division for $2.5 billion (approximately ¥18.22 billion) in cash to expand its MCU division.
According to the statement, the transaction is expected to be completed by 2025.
The automotive Ethernet division provides high-speed connectivity solutions and products for vehicles. It is reported that the division’s revenue is expected to be between $225 million and $250 million (approximately ¥1.64 billion to ¥1.82 billion) this year, with a gross margin close to 60%.
Given such profitability, why is Marvell selling?
Image source: AFP
The answer is clear: they no longer want to pursue it.
Long ago, Marvell stated that it is an AI-first company, with a future focus on AI and data centers.
Marvell’s senior director stated, “Currently, automotive Ethernet is no longer a focus for us, and we are willing to sell at a reasonable price. Infineon’s offer of 10 times the sales price is quite attractive.”
In fact, Marvell has already made significant progress in AI. They signed a five-year agreement with Amazon to customize AI chips for data centers. In the fourth quarter of last year, data center business surged by 78%, accounting for 75% of total revenue.
Additionally, Marvell’s AI-related revenue is expected to reach $2.5 billion (approximately ¥18.22 billion) in the fiscal year 2025.
Marvell’s sale of the automotive Ethernet business is simply a shift from a diversified portfolio to focusing on core competencies.
Image source: Asian Technology
For Infineon, this acquisition seems quite satisfactory, as Infineon is already focused on automotive chips.
Although the automotive chip market is somewhat sluggish, the long-term growth potential for automotive-grade chips remains significant.
In 2015, Infineon acquired Freescale, strengthening its position in the automotive semiconductor market. In 2020, Infineon acquired Cypress Semiconductor, becoming the world’s largest automotive chip supplier, with automotive business revenue reaching approximately $4.9 billion (approximately ¥35.31 billion).
Industry insiders indicate that this acquisition is aimed at completing Infineon’s automotive communication segment, leveraging Marvell’s established partnerships with over 50 automotive manufacturers to expand and create a more complete product portfolio.
Image source: Reuters
Infineon has also timed this acquisition well, as the automotive chip market is currently in a correction phase, with demand slowing and inventory rising, leading to reduced orders for many manufacturers. Infineon seized the opportunity to enhance its market influence while avoiding competition at higher prices when the market rebounds.
Overall, this can be seen as a typical win-win transaction. Marvell is streamlining its focus on AI, while Infineon is expanding its team and completing the automotive chip puzzle.
However, whether Infineon truly “got a bargain” and whether Marvell will advance further in the AI sector remains to be seen.
Looking for an AI hardware innovation team, providing capital and full-chain support! Project submission email: [email protected]
Source: Asian Technology – “Marvell Sells Automotive Ethernet Division to Infineon for $2.5 Billion”
*The content of this article is for sharing and discussion only and does not represent our endorsement or agreement. Some images and text materials are sourced from the internet,for infringement pleasecontact for removal!
End
__
Selected Articles
_
-
Breaking: 50-year tech giant withdraws from Shanghai!
-
Shock worldwide, Trump imposes “reciprocal tariffs”, 15 countries retaliate!
-
2nm is coming!
-
Tech giants implement voluntary layoffs, with the highest compensation nearing 4 million!
-
[New Product Release] ChuanTu Microelectronics launches its first LIN transceiver CA-IF1021-Q1!
If you find this article unhelpful, pleasegive it a thumbs up!
