On Monday, Marvell announced that it had signed an agreement to purchase Avera Semiconductor from GlobalFoundries. The acquisition will give Marvell more chip design opportunities, and will make it possible to develop a wider range of products. In particular, the company says that the acquisition will strengthen its position as a leading supplier of semiconductor solutions for infrastructure. Meanwhile, the agreement also sees Marvell entering into a wafer delivery agreement with GlobalFoundries.
GlobalFoundries spun its ASIC Solutions division (as it came from IBM) to Avera Semiconductor in November 2018. The business unit helps chip designers to develop semi-custom of full-custom chips. Avera employs about 800 engineers and has a comprehensive portfolio of silicon-proven IP including armrests, performance and density-optimized SRAM, built-in TCAM, high-speed SerDes, interfaces and other useful IP. In particular, Avera has design experience in fields such as analog and mixed signal and SoCs for switches, routers and other devices. Avera is now developing several projects for the next data center.
Marvell will pay GlobalFoundries $ 650 million in cash on completion (at the end of Marvell's fiscal year 2020) plus an additional $ 90 million in cash if certain business relationships are met within the next 1
Since Avera used to work exclusively with customers from GlobalFoundries, the vast majority of IP blocks were designed for GlobalFoundries process technology. So Marvell signs a long-term supply agreement with GlobalFoundries makes sense for both companies, as Marvell will use GlobalFoundry's capacity anyway.
With the addition of Avera engineers and IP, Marvell hopes to address (among other markets) customized ASICs aimed at base stations, which will have positive effects on revenue and profitability.
Overall, the sale of the Avera business is part of a major transformation of GlobalFoundries. Since the company has ceased the development of groundbreaking process nodes (7nm +) and relocated to specialty technologies, customer base and business needs also change.