The race to own the “plumbing” of the AI data center is heating up.
Marvell Technology has agreed to acquire networking equipment provider XConn Technologies for approximately $540 million in a cash-and-stock deal.
💰 THE DEAL METRICS:
- Price Tag: ~$540 Million.
- Structure: ~60% Cash / ~40% Stock (approx. 2.5 million shares).
- Closing: Expected early 2026.
- Revenue Impact: Expected to ramp to $100 million in revenue by fiscal 2028.
🛠️ THE STRATEGIC THESIS (The “Switching” Battle): Marvell is fighting to gain ground against giants Broadcom and Nvidia in the critical networking layer.
- The Tech: XConn specializes in PCIe and CXL switching silicon—the essential “traffic cops” that determine how fast data moves between AI accelerators and memory.
- The Gap: Nvidia (via Mellanox/InfiniBand) and Broadcom (via Ethernet/Jericho) dominate high-end switching. Buying XConn gives Marvell a proprietary “switching platform” to bundle with its custom AI chips and optical interconnects.
💡 ANALYST TAKEAWAY: Connectivity is the new bottleneck. As AI clusters scale from single racks to warehouse-sized supercomputers, the speed of the switch is just as important as the speed of the GPU. Marvell is betting $540M that XConn’s CXL technology will be key to the next generation of disaggregated memory architectures.
👇 Hardware Pros: Is CXL switching the next big battleground, or will Ethernet continue to eat everything?