2.5 billion! Infineon Acquires Marvell I Automotive Business

Infineon said the Marvell Automotive Ethernet division, whose customers include more than 50 automakers, is expected to generate $225 million to $250 million in revenue this year with a gross margin of about 60 percent.

Infineon will be in the process of financing the deal through existing liquidity and additional debt, and the business will become part of Infineon's automotive division once the acquisition is complete.
The sale of the automotive Ethernet business is good for both Infineon and Marvell. Automotive components have been a weak link in the chip industry in recent quarters, in part because of weak electric vehicle sales. marvell has been focusing on data center chips, which grew 78 percent in the fourth quarter, and its automotive and industrial division, which grew 4.1 percent over the same period. Divesting its automotive-related business will allow Marvell to focus on its faster-growing data center business.

For Infineon, the streamlining of the business continues to improve the automotive segment. In addition to acquiring Marvell's automotive Ethernet business. Infineon also recently sold its automated test equipment technology and related development team to Teradyne, and sold its 200mm fab in Austin, Texas ("Fab25") to SkyWater.

Looking back over the past few years, Infineon has been a consistent leader in the automotive semiconductor market. Since 2015, Infineon's microcontroller business has grown by an average of 13.0% per year, while the overall market has grown by only 4.0% per year.In 2023, Infineon climbed to the global number one position in the automotive microcontroller market for the first time. Now, the company has achieved the same feat in the entire microcontroller market (all end markets combined).

Infineon's first-quarter revenue of €3.424 billion was down 13 percent sequentially and 8 percent year-on-year, while profit came in at €573 million, with a margin of 16.7 percent. However, for the upcoming second quarter of fiscal year 2025, Infineon gave an optimistic outlook, with revenue expected to reach about 3.6 billion euros. Meanwhile, profit margins are expected to fluctuate within a range of 14% to 16%.