Marvell Technology Strengthens AI Data Center Ambitions with Strategic Acquisitions

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Marvell Technology is making decisive moves to capture a larger share of the booming artificial intelligence data center market. The semiconductor firm has unveiled two strategic acquisitions in quick succession, aimed at significantly enhancing its data center infrastructure capabilities. These purchases focus on the critical interconnect technologies required for high-performance AI systems.

This strategic offensive is built upon a backdrop of robust financial health. For the third quarter of its fiscal 2026, Marvell reported record revenue of $2.075 billion, representing a 37% year-over-year increase. Adjusted earnings per share saw an even more dramatic rise, climbing 77% to $0.76. The data center segment, now the company's largest, generated $1.52 billion in revenue, growing by nearly 38%.

These figures demonstrate that Marvell is already benefiting substantially from the AI expansion. The recent acquisitions are designed to solidify and extend this advantageous position in preparation for the next phase of industry growth.

Acquiring Key Interconnect Technologies

The company's latest agreement involves the acquisition of XConn Technologies for approximately $540 million. The deal will be financed with 60% cash and 40% Marvell stock. XConn specializes in PCIe and CXL switching chips, which are essential for managing data flow between processors and accelerators within AI data centers. This technology is particularly vital for scale-up architectures in multi-rack configurations, where modern AI workloads demand extremely low latency and high bandwidth.

This move follows closely on the heels of another deal: the purchase of Celestial AI, a provider of optical interconnect solutions. Together, these acquisitions are intended to create a comprehensive offering for AI data centers, covering everything from chip-to-chip communication to optical connections over longer distances.

By integrating XConn's switching technology with its own CXL controllers, Marvell is assembling one of the industry's most extensive CXL portfolios. The company expects XConn to begin contributing to revenue in the second half of fiscal 2027, with an estimated contribution of around $100 million in fiscal 2028.

Navigating a Competitive Landscape

Marvell's strategy is unambiguous: to establish itself as a leading provider of infrastructure technology for AI data centers in a fiercely competitive market. The success of these investments will hinge on the speed and effectiveness of the integration process, as well as the actual growth trajectory of demand for these specialized components in the coming years. The company is betting that its enhanced portfolio will be crucial for building the next generation of AI-optimized data centers.