More semiconductor consolidation as Marvell buys Cavium for $6 billion

US networking and wireless chip company Marvell is dropping $6 billion on Cavium, which also makes chips that do similar stuff.

Both companies work largely behind the scenes, designing SoCs that control things like storage units, networking products and wireless connectivity. Here’s how the announcement describes the deal.

‘The transaction combines Marvell’s portfolio of leading HDD and SSD storage controllers, networking solutions and high-performance wireless connectivity products with Cavium’s portfolio of leading multi-core processing, networking communications, storage connectivity and security solutions.’

The rest of it is the usual M&A talk about synergies, scale and end-to-end solutions. “This is an exciting combination of two very complementary companies that together equal more than the sum of their parts,” said Marvell CEO Matt Murphy.

“This combination expands and diversifies our revenue base and end markets, and enables us to deliver a broader set of differentiated solutions to our customers. Syed Ali has built an outstanding company, and I’m excited that he is joining the Board. I’m equally excited that Cavium’s Co-founder Raghib Hussain and Vice President of IC Engineering Anil Jain will also join my senior leadership team. Together, we all will be able to deliver immediate and long-term value to our customers, employees and shareholders.”

“Individually, our businesses are exceptionally strong, but together, we will be one of the few companies in the world capable of delivering such a comprehensive set of end-to-end solutions to our combined customer base,” said Cavium Co-founder and CEO, Syed Ali. “Our potential is huge. We look forward to working closely with the Marvell team to ensure a smooth transition and to start unlocking the significant opportunities that our combination creates.”

As they said Murphy will be the CEO of the combined company, with Ali adopting a more strategic role as an advisor and board member. The semiconductor sector has been subject to consolidation for some time, with the mega-acquisition attempt by Broadcom of Qualcomm set to be one of the biggest acquisitions ever if they pull it off.