California-based chipmaker Marvell will acquire Avera Semiconductor, GlobalFoundries' semiconductor chip-design arm, for $650 million in cash.
The sale is expected to close at the end of the fiscal 2020, subject to an antitrust approval by US agencies as Marvell is registered in Bermuda.
In an interview with Bloomberg, Matt Murphy, president and CEO of Marvell, said the transaction will net the company about $300 million in revenue for 2020. The company will also gain 800 engineers focused on application-specific integrated circuit (ASIC) chip-design.
ASICs are designed for a specific purpose, like for use in data centers and 5G phones, and can be the fastest and most efficient at handling a pre-defined workload - but limited beyond that.
The company was previously IBM’s microelectronics arm, but after the chip designer was acquired by GlobalFoundries in 2015 the semiconductor manufacturer decided to rebrand the microelectronics business as a wholly-owned subsidiary of its new owner and name it Avera Semiconductor.
At the time of the company’s creation, GlobalFoundries said that Avera had more than 850 employees and with annual revenues in excess of $500 million.
Murphy said: “Our acquisition of Avera enables us to offer the complete spectrum of product architectures spanning standard, semi-custom to full ASIC solutions… we will be better positioned to capitalize on our expanding opportunity in wired and wireless infrastructure, starting immediately in the fast growing 5G base station market.”