What's Happening?
Marvell Technology, Inc. has announced a definitive agreement to acquire XConn Technologies, a provider of advanced PCIe and CXL switching silicon. This acquisition aims to expand Marvell's switching portfolio
by integrating XConn's products and enhancing Marvell's Ultra Accelerator Link (UALink) scale-up switch team with experienced engineering talent. The acquisition is part of Marvell's strategy to address the evolving needs of AI workloads, which are shifting from single-rack to multi-rack configurations in data centers. UALink, an open industry standard, is designed to facilitate high-speed communication across multiple accelerators, enabling them to function as a single, larger system. This move is expected to strengthen Marvell's position in the AI and cloud data center markets.
Why It's Important?
The acquisition of XConn Technologies by Marvell is significant as it positions Marvell to better serve the growing demand for high-performance data center connectivity solutions. As AI systems become more complex, the need for efficient, high-bandwidth connectivity solutions like UALink becomes critical. By acquiring XConn, Marvell not only expands its product offerings but also gains access to XConn's customer base and engineering expertise. This strategic move is expected to enhance Marvell's competitive edge in the AI and cloud data center markets, potentially leading to increased market share and revenue growth. The acquisition also highlights the importance of advanced connectivity solutions in supporting the next generation of AI platforms.
What's Next?
The transaction, valued at approximately $540 million, is expected to close in early 2026, subject to customary closing conditions and regulatory approvals. Marvell plans to integrate XConn's PCIe and CXL switching products into its portfolio, with revenue contributions anticipated to begin in the second half of fiscal year 2027. The acquisition is expected to become accretive to Marvell's non-GAAP earnings, with projected revenues of approximately $100 million in fiscal 2028. As the integration progresses, Marvell will likely focus on leveraging XConn's technology to enhance its offerings and strengthen its position in the AI and data center connectivity markets.
