Marvell's Big Move in AI and Data Centers

Marvell Technology has made a significant move to boost its AI and data center capabilities. The company announced it will acquire XConn Technologies. This deal is all about enhancing Marvell's switching silicon lineup. XConn brings expertise in advanced PCIe and CXL switch products. Marvell aims to strengthen its Ultra Accelerator Link (UALink) switch portfolio. The acquisition also adds experienced engineers to the team. The financial details of the deal are interesting. Marvell will pay about $540 million. This amount will be split between cash and stock. The deal is expected to close in early 2026. However, this is subject to approvals and standard conditions. Why does this matter for AI data centers? AI workloads are growing. Data center designs are evolving. They are moving beyond single racks to multi-rack systems. These new architectures need high bandwidth and ultra-low latency connections. UALink is an open standard. It aims to improve connectivity across large accelerator clusters. This standard builds on PCIe ecosystem advances. It targets next-generation performance and reach needs.Matt Murphy, Marvell's CEO, sees this as a strategic move. He believes the combination strengthens Marvell's connectivity strategy. It supports AI and cloud data centers. Murphy also noted that XConn complements Marvell's pending Celestial AI acquisition. Gerry Fan, XConn's CEO, agrees. He said high-speed connectivity is crucial for modern data centers. XConn's products are already in production. Their PCIe 5 and CXL 2. 0 switches are available today. PCIe 6 and CXL 3. 1 products are sampling now. Marvell expects revenue from this acquisition to start in late 2027. The company projects XConn to become profitable by then. Marvell aims for the business to reach about $100 million in revenue by fiscal 2028. Marvell's stock saw a boost on Tuesday. Shares were up 3. 32% at $93. 23. This shows investor confidence in the company's strategic move.