President & COO, Marvell Technology
Marvell buys Innovium for $955M. We are LIVE with Marvell's Chris Koopmans and Nariman Yousefi.
On this episode of The Six Five – Insiders Edition Patrick Moorhead and I are joined by Chris Koopmans, COO of Marvell and Nariman Yousefi, EVP Automotive, Coherent DSP and Switch Group at Marvell.
Our conversation covered the breaking news that Marvell has acquired Innovium, what this means for the future of the industry as well as Marvell. It was an awesome conversation and one you should definitely check out.
Breaking Down Marvell’s Acquisition of Innovium
Our conversation with Chris and Nariman also revolved around the following:
● An overview of Innovium and how it will boost Marve...
About Christopher Koopmans
On August 3, 2021, Marvell Technology announced its acquisition of Innovium, a venture-backed switching company, for $955 million. Chris Koopmans, then Chief Operations Officer at Marvell, stated that the acquisition "complements what Marvell is doing perfectly and really broadens and rounds out our portfolio of offerings for our hyperscale data center customers." He described Innovium as a company with "a very rich set of IP, a great team" that had been able to "penetrate key accounts and generate sizable revenue" as a startup. Koopmans explained that Innovium's switching technology is used in data center platforms, connecting servers in top-of-rack configurations and aggregating packets through spine, leaf, and DCI layers. He said the combination of Innovium's switching assets with Marvell's existing physical-layer technology would allow Marvell to "give some really innovative solutions to the customers" and be "very aggressive in investments" in the data center space.
Transcript (21 segments)
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Pat0:11
Where are you broadcasting from?
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Chris Nicholson0:13
I'm broadcasting from North Austin. But you know, sometimes the big moments pop up and we just have to do this wherever we are.
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Pat0:21
You're in your living room, I think?
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Chris Nicholson0:22
I'm in the back seat of my car. I propped myself up on some boxes to make it look like a good setup. But we look good, and that's the beauty of a high-tech, connected world with fast speeds. We need those data centers switching fast. And by the way, I think we're doing this because there's some pretty big news breaking, and we want to be part of sharing it. Let's bring in our special guests right now from Marvel. How are you gentlemen?
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Chris Koopmans1:11
I cover and run marketing and operations at Marvel. Hi guys, great to be here.
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Nariman Yousefi1:17
My name is Nariman Yousefi. I'm the executive vice president responsible for the switching, coherent DSP, and automotive division at Marvel.
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Chris Nicholson1:27
So who wants to be the first to break the big news here?
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Chris Koopmans1:31
Can I ask Chris? I'll do it. So this morning we announced that Marvel is acquiring Innovium. Innovium is a venture-backed company in the switching business. Marvel is already in the switching business, but we're focused primarily on the feature-rich segment. Innovium has been very successful at gaining share in the cloud or hyperscale data center market.
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Chris Nicholson2:10
This is a big move for the company. It seems like several months ago, and I can't remember the day, but I wasn't home for that one either, the Inphi news broke. You guys are getting into bigger and bigger spaces with 10 billion deals. This one's closer to a billion, but still a really big deal. It takes you into a space in the market that everyone was asking about after the Inphi deal, after you really expanded the optics play. Nariman, why is this such a big deal? The name's not a household name, but for what you're doing, Pat and I both said as soon as we heard it, this is big news.
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Nariman Yousefi2:49
There's a lot of emphasis that company has done towards connectivity, high-speed switching. The big deal is that even though Inphi has products where we focus a lot on the optical and physical layer, you still need switching technology to connect everything together. Now with the combination of both assets, we can provide very competitive solutions. We can innovate in terms of what the customers need, not just today but also in the future. The combination will enable us to provide solutions that are scalable, lower power, and meet the requirements, because a lot of these players also want multiple sources. Right now, there's one particular company, Broadcom, which has a pretty dominant position.
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Chris Nicholson4:10
I've been in semiconductors for a long time, and I've been covering it even longer. Anytime you have a market with less than three players, it's a huge issue. Right now it's a two or three horse race between Innovium and Broadcom. Customers don't like that. They really don't.
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Chris Koopmans4:36
To that point, getting these new chips out is expensive, and scale matters. Our combination of the deep infrastructure of Marvel, the know-how, the investment capacity, plus the innovating features that Innovium brings in terms of a very rich set of IPs and a great team, we really like what they've done. As a startup company, they've been able to penetrate some key accounts and have very sizable revenue.
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Chris Nicholson5:27
Can one of you talk about specifically what type of devices in these hyperscalers do these chips go into?
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Nariman Yousefi5:37
These go into switching platforms that are either packaged into one or two boxes or chassis. They're typically used in top of the rack, where they connect different servers together and cover the infrastructure on the back end.
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Chris Koopmans6:10
Innovium brings the switching, and with the optical elements and the assets that we have from Inphi, which brings the physical layer, the combination is very strong.
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Chris Nicholson6:23
So just to be clear, this could be in the top of rack switch, the spine switch, and the core router switch?
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Nariman Yousefi6:31
In the core router, probably not as much, because this technology is more for highly scalable flat networks that typically use these products. But that's where the volume is, and that gets complemented with another Marvel technology called Falcon class of products, which could also be used in the core router switches.
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Chris Koopmans7:12
It's definitely a good expansion of what we're doing today. Particularly with Inphi, Marvel now has the broadest portfolio of silicon solutions for hyperscale data centers to really help them design their next generation architecture. When they're trying to build these networks out, it's more than just one piece; they all have to work together. It's hard when you have to buy point things from here and there and then architect the whole thing. Having a partner who can help put it all together is very helpful.
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Chris Nicholson7:46
I was going to wrap this up because I know we've got your time, and you have lots of media interviews. We were lucky to get early access. You've now expanded your TAM greatly; you're going to compete with Tomahawk and Broadcom, which has a large market share. It's an opportunity. What does this say about Marvel? How will this propel the company? Will simplifying the buying process be the win, or is it because people like working with Marvel? What does this deal really mean, and how quickly will markets see this acquisition make an impact, whether in quarterly numbers or new customer wins?
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Nariman Yousefi8:50
I think it's twofold. One, the infrastructure is paramount. Having companies like Marvel with scale that can have the customers' back and supply technologies from a procurement perspective is huge, especially with chip shortages. But even more importantly, it's about how you solve problems innovatively and efficiently. To do that, you need intellectual property, teams that can execute, and scale with investment capacity. Data center operators look to us to not only supply what they currently have but also what's to come. You'll see us be very aggressive in investments.
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Chris Nicholson10:11
This is great news. Some days I wake up and say, how would I spend a billion dollars today? You guys figured it out for me. This is the type of pieces that will continue to make the company more complete, whether it's the DPU and the Octeon products, continuing to differentiate and get out ahead with the move to Inphi and now into switching. We had Matt Murphy at our 6-5 Summit, and we continue to be impressed with the story and how it evolves. I hope the market is paying attention, because Marvel is clearly a company that sees where it's going and is making significant moves to get there. Thank you both so much for taking the time to join us.