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Marvell is betting on data centers and AI by teaming up with TSMC on 2-nanometer Chips

Marvell is betting on data centers and AI by teaming up with TSMC on 2-nanometer Chips

March 12 , 2024 0

Marvell has announced an expanded collaboration with TSMC to jointly develop the industry's first 2nm chip production platform for accelerated infrastructure optimization. This move is undoubtedly aimed at adapting to future developments in the data center and AI space.

In 2023, the rapid growth of generative AI will enable more and more enterprises to begin to lay out related industrial chain products and technologies, and Marvell will also focus on data centers and artificial intelligence. Over the past year, Marvell's data center and artificial intelligence (AI) businesses saw strong growth despite declines in other businesses, such as carrier infrastructure and enterprise networks.

At the same time, driven by the rising demand for computing power, advanced chip technology has become a new competition point for major manufacturers. Compared with the previous 5nm and 3nm processes, 2nm chips will have significant improvements in performance, power consumption, area, and transistor density. Such technological advances are crucial for cloud computing and AI. Cloud computing needs to process huge amounts of data, while AI relies on powerful computing power for deep learning and reasoning.

In recent years, Marvell's growth as one of the leading suppliers of networking chips has largely been achieved through a series of acquisitions. In 2021, Marvell acquired Innovium for $1.1 billion to enhance Marvell's enterprise capabilities. The acquisition is small compared to the $10 billion acquisition of data center chip supplier Inphi in 2020 and Marvell's $6 billion acquisition of enterprise chip supplier Cavium in 2017.

Marvell has also focused on the high computing and enterprise infrastructure services markets through acquisitions of Cavium (Arm server chips), Aquantia (Ethernet connectivity), and Inphi (analog chips). Currently, Marvell's results are led by its data center division. Within the data center, there is strong demand for AI solutions, and this is an area where the company wants to see future growth.

On March 7, Marvell announced its financial results for the fourth quarter and full year of fiscal year 2024 ended February 3, 2024. Fiscal year 2024 revenue was $5.508 billion. Among them, the data center market revenue in fiscal year 2024 was $2.217 billion, down 8% from the previous year. Operator infrastructure market revenue was $1.052 billion, down 3% from the prior year. Enterprise network market revenue was $1.228 billion, down 10% from the prior year. Consumer market revenue was $622 million, down 11% from the prior year. Automotive/Industrial revenue was $388 million, up 9% from the prior year.

Marvell President and CEO Matt Murphy said: "Artificial Intelligence (AI) drove our data center end market revenue growth of 38% sequentially and 54% year-over-year. As a key enabler of accelerating AI infrastructure, Marvell is well positioned to capitalize on this massive technological change and continue its momentum. Looking ahead to the first quarter of fiscal 2025, we expect continued sequential growth in data center revenue, and initial shipments of our chips optimized for the AI application cloud will complement our electro-optical business. While we expect weak demand to impact consumers, carrier infrastructure and enterprise networks in the near term, we expect revenue declines in these end markets to end beyond the first quarter and expect a recovery in the second half of the fiscal year."

Therefore, in the context of increasing AI load and increasing requirements for performance, power consumption, area and crystal density, Marvell will further expand its silicon wafer manufacturing capabilities and accelerate its layout in the AI field through the cooperation with TSMC.