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Marvell (MRVL) Enhances CXL Portfolio With Tanzanite Buyout

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Marvell Technology (MRVL - Free Report) recently announced entering into a definitive agreement to acquire the privately-held tech start-up, Tanzanite Silicon Solutions Inc., in an all-cash transaction. However, the company didn’t disclose the terms of the all-cash transaction.

Marvell expects to complete the buyout in the second quarter of fiscal 2023, subject to the satisfaction of customary closing conditions, including the approval of Tanzanite shareholders.

Tanzanite Buyout to Boost Marvell’s CXL Portfolio

Tanzanite developed extensive expertise in Compute Express Link (CXL) technology that helps firms with infrastructure agility. The CXL technology is an open standard for the high-speed central processing unit (CPU) that helps maintain memory coherency between the CPU memory space and memory in attached devices.

In March this year, the California-based tech start-up showcased its architectural vision and product roadmap with a system-on-a-chip mapped to the field programmable gate array Proof-Of-Concept vehicle demonstrating Memory Expansion and Memory Pooling, with multi-host CXL-based connectivity.

Marvell believes that the future cloud data center will be built on fully disaggregated architecture utilizing CXL technology as it will require greater high-speed interconnectivity combined with optimized compute, networking, memory, security and storage chipset solutions. This technology helps data centers instantly allocate resources per workload requirements, thereby improving utilization while reducing the total cost of ownership.

Therefore, the buyout is likely to broaden MRVL’s silicon solutions portfolio and, in turn, enhance the company’s cloud data center business.

Noam Mizrahi, corporate chief technology officer at Marvell, said, "The integration of CXL across our end-to-end, cloud-optimized silicon portfolio will bring new levels of data center efficiency, scalability and flexibility to power emerging metaverse and next generation AI applications."

Marvell Ups Data Center-Focused Investments

The Tanzanite acquisition is in line with Marvell’s ongoing step-up investments in the data center business. Over the past few years, Marvell has been expanding its capabilities in the data center end-market semiconductor business. Until 2017, the company was known as the leading supplier of chips for hard disk drives used in PCs.

However, the acquisition of Cavium in 2018 helped Marvell expand its capabilities in the networking market and capture a significant market share in the fast-growing data center space.

The completion of the Inphi Corporation acquisition in April 2021 also opened up new avenues of growth for the company. The combination of Marvell, a leader in infrastructure semiconductor products, and Inphi, which makes high-speed data movement systems and has a strong presence among cloud customers, opened up new opportunities for Marvell's data processing unit and application specific integrated circuit products. Additionally, it reinforced Marvell's leadership position in data centers and extended its 5G network infrastructure.

Marvell further boosts its data center capabilities by completing the acquisition of the California-based high-performance, innovative switching silicon solutions provider for cloud and edge data centers, Innovium, in October 2021.

Zacks Rank & Other Stocks to Consider

Marvell currently carries a Zacks Rank #2 (Buy). Shares of MRVL have rallied 21.5% in the past year.

Some other top-ranked stocks from the broader technology sector are Semtech (SMTC - Free Report) , MaxLinear (MXL - Free Report) and Analog Devices (ADI - Free Report) . Semtech sports a Zacks Rank #1 (Strong Buy), while MaxLinear and Analog Devices each carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Semtech's first-quarter fiscal 2023 earnings has been revised to 76 cents per share from 70 cents over the past 60 days. For fiscal 2023, earnings estimates have moved north by 8% to $3.38 per share in the past 60 days.

Semtech's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of SMTC have declined 6.1% in the past year.

The Zacks Consensus Estimate for MaxLinear's second-quarter 2022 earnings has been revised upward by three cents to 10 cents per share over the past 30 days. For 2022, MaxLinear's earnings estimates have moved north by 36 cents to $4.07 per share in the past 30 days.

MaxLinear's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.1%. Shares of MXL have soared 20.7% in the past year.

The Zacks Consensus Estimate for Analog Devices' second-quarter fiscal 2022 earnings has been revised upward by 4 cents to $2.12 per share over the past 60 days. For fiscal 2022, earnings estimates have moved north by 11 cents to $8.43 per share in the past 60 days.

Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6%. Shares of ADI have increased 1% in the past year .