🚗 Infineon strengthens in automotive. Buys Marvell's Ethernet division for $2.5 billion
Germany's Infineon Technologies $IFX.DE has announced that it will acquire the automotive Ethernet division of Marvell Technology $MRVL for approximately $2.5 billion in cash . The goal is to significantly strengthen its position in microcontrollers and expand its offering of in-vehicle communication solutions.
📦 What the division will focus on
This is a division that develops Ethernet technologies for automobiles, systems that enable high-speed data transfer between sensors, cameras, control units and other elements of today's vehicles.
In 2025, this business is expected to generate revenues of between $225-250 million with gross margins of nearly 60 %.
The total acquisition price is equivalent to approximately 10 times annual sales, which analysts say is a reasonable valuation given the growth potential of this segment.
💡 Why it makes sense for both parties
Marvell is increasingly focused on AI infrastructure and data centers, where it sees higher margins and strategic importance. Automotive Ethernet has thus ceased to be a priority.
Infineon on the other hand, has been gaining strength in the automotive segment for a long time and is looking to position itself as a key supplier of chips for smart and advanced vehicles. This acquisition is a strategic step to consolidate this position.
Previously Infineon slightly raised its revenue guidance for the full year, despite the fact that Q1 was worse than the market had hoped for.
Infineon strengthens its strategic role in the smart mobility supply chain with this transaction. Ethernet infrastructure is an essential component of modern vehicles, and its importance will only grow with the advent of autonomous driving.
Infineon's shares have written off more than 15 %.
For Marvell, this is an important infusion of capital and focusing its business solely on AI and data centers. However, the company's shares have written down more than 55 % and from the highs, they've more than 60 %.
What's your take on these companies? Do you see more opportunity in Germany's Infineon, which specializes in advanced vehicle technology, or Marvell, which is making inroads in AI infrastructure and data centers? Do you like another player in these areas?