Marvell’s latest acquisition: switch-chip firm Innovium

• Innovium will be Marvell's fifth acquisition in four years  

Marvell is buying switch-chip maker, Innovium, for $1.1 billion to bolster its revenues from the lucrative data centre market.

Nariman Yousefi

The combination of Innovium with Inphi, Marvell’s most recent $10 billion acquisition, will enable the company to co-package optics alongside the high-bandwidth, low-latency switch chips.

“Inphi has quite a bit of experience shipping silicon photonics with the ColorZ and ColorZ II [modules],” says Nariman Yousefi, executive vice president, automotive, coherent DSP and switch group at Marvell. “And we have programmes inside the company to do co-packaged optics as well.”

Innovium

Innovium’s Teralynx family addresses the needs of large-scale data centres and will complement Marvell’s Prestera switch-chip portfolio that addresses enterprise and carrier applications.

Formed in 2014, Innovium is a private company with a staff of 230, 185 of which are engaged in R&D. The company has also raised a total of $400 million in funding.

Innovium is already shipping its 12.8-terabit Teralynx 7 to a leading cloud provider and expects revenues of $150 million in 2022. And earlier this year, it announced it shipped over 1 million 400-gigabit switch-silicon ports in 2020.

“The top cloud players are the ones that drive most of the revenues,” says Yousefi. “But there is a long list of customers that are engaged with Innovium at different capacities and there are a bunch of Tier-2s [data centre operators].”

Devan Adams

Marvell gained the Xpliant programmable switch-chip architecture for the data centre when it acquired Cavium Networks in 2018, says Devan Adams, principal analyst at LightCounting.

But soon after the acquisition, the Xpliant switch chip line was discontinued as Marvell decided to concentrate on expanding its Prestera chip family.

Now Marvell has returned to the market to gain a scalable, low-latency architecture that addresses the needs of the mega data centre players.

“When you think of the overall data centre market and how it is booming, Innovium makes Marvell’s solutions more attractive to the key cloud customers by helping them expand their switch-chip offerings,” says Adams.

Marvell says it was impressed with the Innovium design team and with the Teralynx architecture when assessing the company as a potential buy. “We also liked the fact that customers have validated the architecture and that it is shipping and in live networks,” says Yousefi.

Broadcom dominates the switch-chip market. According to the market research company, 650 Group, Broadcom had 72 per cent of the 50-gigabit serialiser-deserialiser (serdes) cloud-based switch market in the first quarter, 2021, while Innovium had 27 per cent.

The cloud players want a choice of suppliers, not just for procurement reasons but to ensure sufficiently strong suppliers that can address their needs.

This latest acquisition, expected to close before the year-end, will be Marvell’s fifth acquisition in four years.

Marvell acquired Inphi earlier this year and two custom ASIC companies in 2019: Avera Semiconductor, originally the ASIC group of IBM Microelectronics, and Aquantia that has multi-gigabit PHY expertise. A year before that, Marvell acquired Cavium, as mentioned.

Marvell will use its sales force to promote Innovium’s products to a larger customer base including customers using its Prestera switch chips.

Adams also notes that Marvell has a broad supply chain and a strategic relationship with leading foundry TSMC that will benefit Innovium in the making of its chips, especially when semiconductors are currently in short supply.

Switch chip styles

There are two types of Ethernet switch chips. For the mega data centres, what is important is capacity and the chip’s throughput per Watt (gigabit-per-second/ Watt). Cloud players need to move traffic efficiently in the data centre and with a low latency. Such chips have a streamlined packet-processing capability. Examples include Broadcom’s Tomahawk and Innovium’s Teralynx lines.

In contrast, enterprises need to support various networking protocols and that requires a broad feature set and packet-processing capability. Marvell’s Prestera and Broadcom’s Trident portfolios fall into this category.

“It is hard to design one device that addresses both,” says Yousefi. “That is why there are two different architectures, design teams, databases and chips.”

Marvell highlights Innovium’s Teralynx portfolio’s low power and low latency. “Even though the application for these devices is supposed to be streamlined, Innovium has managed to put in programmability features that makes the architecture more flexible,” says Yousefi. “These are important differentiators.”

Innovium’s Teralynx 8 family includes a 7nm CMOS, 25.6-terabit chip with 112 gigabit-per-second (Gbps) serialisers-deserialisers (serdes). “The Teralynx 8 switch chip is in the bring-up phase with customers; it is not shipping in volume yet,” says Yousefi. 

A future Teralynx 9 has also been mentioned.

Yousefi confirms there will be a next-generation 51.2-terabit switch chip and devices beyond that; what the next device will be called is to be determined.

The Marvell acquisition will also combine the serdes expertise of Inphi and Innovium. “We are going to help, but right now we can’t really do much as two separate companies,” says Yousefi.

Integration

Yousefi is also definitive about Marvell’s co-packaged optics plans but points out that the adoption of the technology will take time for the whole industry.

The integration of the Innovium team within Marvell will be fine-tuned once the two companies formally merge. At a high-level, the Innovium team will continue to focus on what it does best: the high-capacity product line, says Yousefi.

“The real opportunity is how do you leverage the collective teams’ knowledge and efficiencies, share the best practices, help each other out during peak resource crunches, and release products more efficiently,” he says.

More acquisitions

The Innovium deal follows the likes of Intel buying Barefoot Networks and Nvidia buying networking specialist Mellanox which designs its own switch chips.

For Adams, it was those deals that suggested it was only a question of time before someone bid for Innovium.

Adams admits he has no insight into Marvell’s acquisition plans, but he points to how Marvell had its own server CPU chip, the ThunderX3 chip based on ARM cores, which was cancelled last year. Could Marvell decide to re-enter the market via the acquisition route?

Another potential technology Marvell could acquire is programmable logic. FPGAs are used in the data centre as accelerators. Adams also points out that certain switch vendors have added FPGAs to their platforms for niche applications such as high-frequency trading.

As for artificial intelligence (AI) hardware, Marvell has its own IP and has added hardware blocks for AI as part of it Octean 10 design. So perhaps the buying of an AI chip start-up is less likely for now.

Yousefi does not rule out more Marvell acquisitions. “The industry is all about growth and how you can position yourself to do many things,” he says.

But he stresses it will take Marvell time to absorb the latest acquisitions of Inphi and Innovium: “That is just as important as acquiring the right assets.”