Once and former AMD fabrication division GlobalFoundries is shrinking yet again, with the sale of its application specific integrated circuit (ASIC) subsidiary Avera Semiconductor to Marvell.
Formed when an at-the-time financially ailing AMD spun off its fabrication division and sought outside investment but now an independent company in its own right, GlobalFoundries has been slowly shrinking of late. Following the company's admission that it would be unable to offer a 7nm process node to its customers, it span off its customer application specific integrated circuit (ASIC) business in a move which appeared to foreshadow its sale to outside investors and sold off its Fab 10 facility in East Fishkill - a move chief executive Dr. Tom Caulfield spun as fuel for the company's 'long-term growth' rather than a sign of shrinkage.
Now, the other shoe has fallen: As predicted, the newly-formed Avera Semiconductor ASIC subsidiary is being sold off. The buyer: Marvell, which has trumpeted the buy as extending the company's reach into the burgeoning market for 5G New Radio (NR) cellular base stations and bringing it a 'substantial revenue stream'.
'Our acquisition of Avera enables us to offer the complete spectrum of product architectures spanning standard, semi-custom to full ASIC solutions,' crows Matt Murphy, president and chief executive at Marvell, of the deal. 'With their highly experienced design team and Marvell’s leading technology platform, we will be better positioned to capitalise on our expanding opportunity in wired and wireless infrastructure, starting immediately in the fast growing 5G base station market. In addition, we are looking forward to furthering our successful partnership with GlobalFoundries in the coming years and beyond.'
'This transaction is another example of our commitment to focus on our core business of providing differentiated foundry offerings as a manufacturing service provider, while establishing deeper relationships with customers who are leaders in their respective sectors,' adds GlobalFoundries' Dr. Caulfield. 'With this deal and our growing strategic partnership with Marvell, we will forge new opportunities for the teams of both companies to leverage GF's broad set of offerings and capitalise on the 5G infrastructure market as well as other opportunities. We look forward to becoming a strategic provider for Marvell for decades to come.'
The deal seems to come relatively cheaply for what Marvell receives: The company is to pay £511 million in cash at close plus a further £70.8 million 'if certain business conditions are satisfied in the next 15 months'.
July 1 2020 | 17:34