Marvell宣布完成对Cavium收购Release time：2018-07-12

As reported in November, Marvell had tooffer approximately $5.5 billion for outstanding shares of Cavium and absorbCavium’s debt of approximately $637.6 million, which brought the value of thetransaction to over $6.1 billion. For a rather hefty sum of money, Marvellobtained a developer of ARM and MIPS-based SoCs for network, video, security,storage connectivity, server, and other applications. Essentially, the companytransformed itself from a developer of storage controllers (HDD, SSD, RAID,etc.), networking and connectivity solutions into a corporation with a muchgreater potential.

Marvell now pins a lot of hopes on suchapplications as AI, 5G, and Cloud & Edge computing. It is particularlynoteworthy that in its letter to customers, the company even put processingahead of storage when describing its new portfolio of products.

Applications such as AI, 5G, Cloud,automotive, and edge computing all require engineering solutions that combinehigh bandwidth, very low power consumption, and leadership in complex system ona chip solutions,” said Matt Murphy, Marvell’s CEO. “As a combined company, wenow offer industry-leading IP, a broad portfolio of infrastructure solutions,and a talented team of innovators ready to tackle our customers’ toughestchallenges. We’re excited to get started.

As for the actual merger, while the mergeritself was in the planning stages well before it was even announced, in a sensethe company can only now really get started on being a merged entity now thatthe merger has been completed. Due to regulations, companies cannot work reallyclosely (i.e., share confidential information) before the transaction isclosed. As a result, Marvell and Cavium will have to create a new roadmap from scratchin the coming months while talking to their clients and having all the requiredinformation about each other’s capabilities.

Moving on to the impact on employees. Withthe acquisition of Cavium, Marvell’s headcount should have increased to around7000. Meanwhile, in letters to clients and suppliers Marvell’s management saidthat the combined company would employ “5000+” people, roughly the same numberMarvell employed before the takeover. Perhaps Marvell’s execs are toooptimistic about synergies between two companies, and are planning onsignificant layoffs. Obviously, letting almost 30% of the staff go sounds likea rather drastic measure that is going to cost a lot a lot of money. Anotherexplanation is that Marvell does not want certain businesses it now has, sothey will be eventually sold off and the headcount will reduce to 5000+.

Speaking of prospects of the merged companyin general, it remains to be seen whether the “new Marvell” wants to keep allthe business units, but optimize the workforce, or get rid of certainbusinesses. I will repeat what I said back in November:

"In the coming years the expectedserviceable addressable market for CPUs and specialized SoCs will grow. Inparticular, low-power CPUs will be needed for 5G base stations and otheremerging applications. Cavium already has custom ThunderX SoCs for servers andtelecom equipment, so Marvell will need to develop them further to gain in thefuture."

What I can add to this is that computecapabilities are getting increasingly important for storage industry ingeneral. In fact, in-storage processing looks to be gaining traction. SinceMarvell announced plans to acquire Cavium, Western Digital has disclosed plansto use RISC-V cores for all of its products in the coming years and has impliedthat they'll be using in-storage processing. Furthermore, NGD released itssecond-gen Catalina SSD with in-storage processing and is gearing up to releasean ASIC-based Catalina 3 later this year.

Finally, with the closure of the deal,Marvell has also announced that Syed Ali (co-founder and CEO of Cavium), BradBuss (a director of Cavium) and Dr. Edward Frank (a director of Cavium) wouldjoin Marvell’s board of directors.