The deal, worth up to $740 million, is the last and largest in foundry's three-phase restructuring plan
GlobalFoundries agreed to sell its ASIC business to Marvell Semiconductor for up to $740 million in the final step in a three-phase restructuring that repositions GlobalFoundries from a leading-edge chip foundry to a provider of specialty processes.
While the deal completes a restructuring plan initiated by Globalfoundries CEO Tom Caufield in August, it also bolsters Marvell's reach in 5G base stations and its position as a chip supplier for both wired and wireless infrastructure. The ASIC business — known as Avera — comes with what Marvell called "strategic design wins" with leading infrastructure OEMs.
Matt Murphy, Marvell's CEO, said in a conference call with analysts following the deal's announcement, that the acquisition would bolster Marvell's standard and semi-custom product portfolio with Avera's full custom ASIC development capabilities.
"Marvell will now offer customers an unparalleled breadth of standard, semi-custom and full ASIC capabilities, all under one umbrella," Murphy said.
Under the terms of the acquisition — which remains subject to approval of Marvell's stockholders — Marvell will pay GlobalFoundries $650 million in cash plus an additional $90 million contingent on the satisfaction of certain conditions over the next 15 months.
The deal is subject to review by U.S. regulators, but does not require the approval of China's Ministry of Commerce, Murphy said.
The acquisition includes Avera's revenue stream, design wins and the transfer of about 800 employees. It also includes a new long-term wafer supply agreement between Marvell and GlobalFoundries, the companies said.
Avera was part of IBM's Microelectronics business prior to its acquisition by Globalfoundries in 2014. Avera boasts capabilities in analog, mixed-signal and SoC design as well as an IP portfolio that includes high-speed SerDes, high-performance embedded memory and advanced packaging.
GlobalFoundries announced last August it would halt development on 7-nm process technology as part of a company-wide restructuring. The ASIC group was spun out as Avera at that time to enable it to engage with TSMC for 7 nm.
Avera represents GlobalFoundries' third and largest divestiture this year to downsize operations following the restructuring announcement. In January, GlobalFoundries sold its 200-mm Fab 3E in Singapore to Taiwan’s Vanguard for $236 million. Last month, the company announced a deal to sell its 300-mm Fab 10 in East Fishkill, N.Y. to ON Semiconductor for $430 million.
The deal marks the second major acquisition announced by Marvell this month. On May 6, Marvell announced it agreed to pay $452 million in acquire Aquantia to bolster its position in automotive Ethernet.