Marvell To Acquire XConn In $540 Million Deal To Dominate AI Data Center Connectivity

Marvell Technology, Inc. (NASDAQ:MRVL) stock rose Tuesday after the chipmaker announced an acquisition aimed at strengthening its position in AI and data center connectivity.

Marvell agreed to buy XConn Technologies to strengthen its switching silicon lineup, adding expertise in advanced PCIe and CXL switch products.

Marvell said the deal will expand its Ultra Accelerator Link switch portfolio and add experienced switching engineers.

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Transaction Terms And Timeline

Marvell will pay about $540 million using a mix of cash and stock.

The structure calls for roughly 60% cash and 40% stock priced off Marvell’s 20-day VWAP.

The stock portion should equal about 2.5 million Marvell shares.

Marvell expects to close the deal in early 2026, pending approvals and standard conditions.

Why It Matters For AI Data Centers

As AI workloads scale, data center designs are moving beyond single racks into multi-rack systems.

These newer architectures demand high bandwidth and ultra-low latency connections across many accelerators.

UALink is an open standard aimed at scale-up connectivity across large accelerator clusters.

The standard builds on PCIe ecosystem advances and targets next-generation performance and reach needs.

Matt Murphy, chairman and CEO of Marvell, said the combination strengthens Marvell’s connectivity strategy for AI and cloud data centers.

Murphy said XConn also complements Marvell’s pending Celestial AI acquisition.

Gerry Fan, CEO of XConn, said the companies share a view that high-speed connectivity underpins modern data centers.

Product Roadmap And Revenue Outlook

XConn’s PCIe 5 and CXL 2.0 switches are in production today. Its PCIe 6 and CXL 3.1 products are sampling now with customers.

Marvell expects revenue contribution to begin in the second half of fiscal 2027.

The company expects XConn to become accretive to non-GAAP earnings then. Marvell projects the business could reach about $100 million revenue in fiscal 2028.

MRVL Price Action: Marvell Tech shares were up 3.32% at $93.23 at the time of publication on Tuesday, according to Benzinga Pro data.

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