Semicondcutor Biggest Buys and Sells of 2019

The past year has been inundated by a wave of consolidation among chipmakers. Throughout 2019, billions of dollars changed hands as industry giants attempted to fill gaps in their product lines and bolster their positions in some of the world’s most competitive markets including data center connectivity, artificial intelligence (AI), and 5G networking.

Here’s a rundown of 2019’s five hungriest hippos and the silicon morsels they gobbled up or tossed aside.

Intel Gets Serious About AI

Intel closed out 2019 by betting big on AI with the purchase of AI startup Habana Labs for $2 billion. The purchase is aimed at cementing Intel’s position in the highly competitive data center processor space, which the company predicts will be worth more than $25 billion by 2024.

Founded in 2016, Israel-based Habana Labs’ chip portfolio includes two platforms. The company’s Goya AI inference Process launched in late 2018, and has already seen implementation in Facebook’s Glow machine learning (ML) compiler. Habana’s second chip dubbed the Gaudi Training Process launched in June.

“This acquisition advances our AI strategy, which is to provide customers with solutions to fit every performance need – from the intelligent edge to the data center,” said Navin Shenoy, EVP and GM of Intel’s Data Platforms Group, at the time of the acquisition. “More specifically, Habana turbocharges our AI offerings for the data center with a high-performance training processor family and a standards-based programming environment to address evolving AI workloads.”

The purchase came just months after Intel signed an agreement to buy Barefoot Networks for an undisclosed amount in a bid to boost its hyperscale cloud data center business.

Barefoot made Ethernet switch silicon and software for use in data centers, and is perhaps best known for its P-4 programmable Tofino Ethernet Switches, which have been widely used to interconnect major cloud providers’ data centers.

Infineon Opens Its Wallet

German semiconductor business Infineon Technologies purchased Cypress Semiconductor this spring for approximately $10 billion. The acquisition of San Jose, California-based Cypress makes Infineon the No. 8 chipmaker in the world, and boosts its position to the No. 1 supplier of chips to the automotive market, the company claims.

Cypress specializes in developing chips for connected devices and designing software and connectivity components. The acquisition is projected to close in early 2020.

Marvell Snaps Up Avera, Offloads WiFi to NXP

It was a busy year for Marvell, which began 2019 by writing a check for $650 million to buy application-specific integrated circuit (ASIC) maker Avera Semiconductor.

The combination of Marvell’s merchant silicon and semi-custom chips combined with Avera’s ASICs will create a “leading ASIC supplier for wired and wireless infrastructure,” according to Marvell.

In an email to SDxCentral, Zeus Kerravala, principal analyst at ZK Research, called the acquisition a “very strategic” move for Marvell. “The network and compute industries of changing faster than ever before and ASICs are gaining popularity as they can be customized for very specific purposes. Also, at scale, ASICs provide much better price/performance and can be created much faster than general silicon and can be used in a wider range of devices, he said.

Shortly after unveiling plans to purchase Avera, Marvell announced it would sell off its WiFi connectivity business to NXP for $1.76 billion in a move to allow greater investment in 5G and data center silicon. The sale includes both Marvell’s WiFi and Bluetooth portfolios as well as related assets.

Nvidia Invests Big in Interconnected Infrastructure

In a bid to bolster its data center business, Nvidia in March shelled out $6.9 billion buy fellow chipmaker Mellanox Technologies outbidding Intel, Xilinx, and Microsoft.

The Sunnyvale, California, and Yokneam, Israel-based company is perhaps best known for its high-speed networking interconnects, which are heavily utilized in high-performance computing (HPC) and hyperscaler applications. Mellanox’s InfiniBand interconnect technology and high-speed Ethernet products are now used in more than half of the world’s fastest supercomputers and hyperscale data centers.

Nvidia plans to leverage Mellanox’s technology to optimize data center-scale workloads to achieve better performance and lower operating costs for customers, said Nvidia CEO Jensen Huang, said at the time of the announcement.

In late December, Nvidia received the second of three rubber stamps required to finalize the deal. With approval secured from both U.S. and EU regulatory bodies, the fate of the merger rests in the hands of Chinese regulators.

Cisco Gets Lit on Luxtera

In an ongoing march toward realizing its vision of intent-based networking (IBN), Cisco late last year dropped $660 million in cash for silicon photonics maker Luxtera.

Luxtera’s silicon photonics technology integrates high-performance optics directly with silicon electronics to enable what it calls “fiber-to-the-chip” connectivity.

Cisco plans to integrate Luxtera’s technology across its IBN portfolio, which spans data center and service provider markets. Specifically, the technology will be used to enhance the networking giant’s 100GbE and 400GbE portfolios.

Optics are a fundamental part of realizing this goal, said David Goeckeler, EVP and GM of Cisco’s networking and security business, in a statement at the time of the announcement.