Infineon further strengthens its number one position in automotive microcontrollers and boosts systems capabilities for software-defined vehicles with acquisition of Marvell's Automotive Ethernet business

Rhea-AI Summary

Infineon Technologies AG (OTCQX: IFNNY) has announced the acquisition of Marvell Technology's Automotive Ethernet business for US$2.5 billion in an all-cash transaction. The deal strengthens Infineon's position as the global leader in automotive semiconductors and enhances its capabilities for software-defined vehicles.

The acquired business is projected to generate revenue of US$225-250 million in 2025 with a gross margin of approximately 60%. Marvell's Brightlane™ Automotive Ethernet portfolio includes PHY transceivers, switches, and bridges supporting network data rates up to 10 Gbps. The business serves over 50 automotive manufacturers and has a design-win pipeline of around US$4 billion until 2030.

The transaction will be financed through existing liquidity and additional debt, with closing expected within calendar year 2025, subject to regulatory approvals.

Positive

• Acquisition strengthens Infineon's market leadership in automotive microcontrollers
• Strong gross margin of 60% from acquired business
• US$4 billion design-win pipeline until 2030
• Serves 8 of 10 leading automotive OEMs
• Expected revenue contribution of US$225-250 million in 2025

Negative

• High acquisition cost of US$2.5 billion requiring additional debt
• Transaction subject to regulatory approval risks
• Integration costs and risks with several hundred employees across multiple regions

Insights

Financial Analyst

Infineon's $2.5 billion acquisition of Marvell's Automotive Ethernet business represents a strategic investment with compelling financial fundamentals. The target business generates $225-250 million in annual revenue with an impressive 60% gross margin, significantly above semiconductor industry averages. At approximately 10x revenue, the valuation reflects the premium nature of high-margin automotive semiconductor assets.

The deal's financial structure is prudent, combining existing liquidity with new debt. The $4 billion design-win pipeline through 2030 provides substantial revenue visibility and supports the acquisition price. Synergies from R&D consolidation and leveraging Infineon's manufacturing scale should enhance profitability beyond the already strong baseline margins.

This transaction strengthens Infineon's competitive moat in automotive semiconductors. By expanding from microcontrollers into high-speed networking, Infineon gains both vertical integration advantages and cross-selling opportunities. The timing is particularly advantageous as vehicle architectures transition to centralized computing requiring high-bandwidth networking—effectively capturing market share in a segment with expanding TAM rather than just consolidating existing markets.

The acquisition effectively leverages Infineon's existing customer relationships while maintaining manufacturing and R&D investments in strategic locations, including the U.S. While adding debt, the transaction's financial profile suggests it will be accretive fairly quickly, making this a well-structured deal that enhances Infineon's competitive positioning without overstretching its balance sheet.

Automotive Technology Specialist

This acquisition perfectly positions Infineon at the intersection of two critical automotive technology trends: the rise of domain and zonal architectures in vehicles and the exponential growth in bandwidth requirements for advanced driver systems. Marvell's Ethernet portfolio, with speeds from 100 Mbps to 10 Gbps, addresses precisely the technical bottleneck that automakers are facing as they implement more sophisticated ADAS and autonomous capabilities.

The strategic brilliance here is combining Infineon's dominant AURIX microcontroller family with Marvell's Ethernet expertise. Traditional vehicle architectures used CAN and FlexRay networks with bandwidth, but modern architectures require the high-speed backbones that only automotive-grade Ethernet can provide. This acquisition creates an integrated solution addressing both processing and networking requirements.

Securing relationships with eight of the top ten OEMs is particularly valuable as automotive design cycles are lengthy, and incumbent suppliers have significant advantages. The mention of $4 billion in design wins through 2030 confirms Marvell's technology has already been designed into future vehicle platforms—revenue that's highly likely to materialize regardless of market fluctuations.

Beyond automotive applications, the technology's applicability to humanoid robotics represents an adjacent growth vector. Robotics shares similar requirements for reliable, low-latency, high-bandwidth communication in physically constrained environments. As physical AI advances, Infineon now possesses key technologies for both the processing and connectivity layers of these systems, creating multiple paths for long-term growth beyond the core automotive market.

• Infineon enters into agreement for acquisition of Marvell Technology's Automotive Ethernet business for US$2.5 billion
• Transaction combines Infineon's market-leading portfolio for automotive microcontrollers with benchmark Automotive Ethernet business of Marvell, accelerating Infineon's system capabilities for software-defined vehicles
• Additional growth opportunities to address future IoT applications such as humanoid robots
• Business expected to generate revenue of US$225 – US$250 million in calendar year 2025 with a gross margin of around 60%
• All-cash transaction to be financed from existing liquidity and additional debt

NEUBIBERG, Germany, April 8, 2025 /PRNewswire/ -- Infineon Technologies AG (FSE: IFX) (OTCQX: IFNNY) is accelerating the build-up of its system capabilities for software-defined vehicles with the acquisition of Marvell Technology's Automotive Ethernet business, complementing and expanding its own market-leading microcontroller business. Infineon and Marvell Technology, Inc. (NASDAQ: MRVL) have entered into a definitive transaction agreement for a purchase price of US$2.5 billion in cash. The transaction is subject to regulatory approvals. Ethernet is a key enabling technology for low-latency, high-bandwidth communication, which is crucial for software-defined vehicles. Additionally, it has significant potential in adjacent fields of use such as humanoid robots. The planned investment will strengthen Infineon's already strong footprint in the U.S., including extensive R&D activities.

"The acquisition is a great strategic fit for Infineon as the global number one provider of semiconductor solutions to the automotive industry," says Jochen Hanebeck, CEO of Infineon. "We will leverage this highly complementary Ethernet technology by combining it with our existing, broad product portfolio to provide our customers with even more comprehensive, leading solutions for software-defined vehicles. The transaction will support our profitable growth strategy going forward, including new opportunities in the field of physical AI such as humanoid robots."

Marvell's leading Brightlane™ Automotive Ethernet portfolio of PHY transceivers, switches and bridges supports network data rates ranging from today's 100 Mbps (megabits per second) up to market-leading 10 Gbps (gigabits per second). It also supports the security and safety features required for today's and tomorrow's in-vehicle networks.

Among the customers of Marvell's Automotive Ethernet business are more than 50 automotive manufacturers, including eight of the ten leading OEMs. The strong customer relationships are backed by a design-win pipeline of around US$4 billion until 2030 and a strong innovation roadmap, paving the way for future revenue growth. The business is expected to generate revenue of US$225 – US$250 million in the 2025 calendar year with a gross margin of around 60%, based on the strong potential for further acceleration through Infineon's unmatched access to global automotive customers. Additional cost synergies are expected from combining R&D forces and leveraging Infineon production reach. Marvell's Automotive Ethernet business has several hundred highly skilled and dedicated employees, with main offices in the U.S., Germany and Asia. After the transaction closes, Marvell's Automotive Ethernet business will become part of Infineon's Automotive division.

Ethernet connectivity solutions are vital to software-defined vehicles and are the basis for highly efficient E/E-architectures comprising central compute, zones and endpoints. Sophisticated features such as advanced driver-assistance systems, autonomous driving, and over-the-air software updates require massive amounts of secure data processing, networking and storage. The combination with the Infineon AURIX™ microcontroller family creates a comprehensive product offering combining communications solutions as well as real-time control. The acquisition is intended to further strengthen Infineon's number one position in microcontrollers.

Infineon will use existing liquidity and will incur additional debt in order to fund the planned acquisition of Marvell's Automotive Ethernet business in an all-cash transaction. Infineon has secured acquisition financing from banks. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close within calendar year 2025.

Infineon will host a telephone conference call including a webcast for analysts and investors, scheduled for Tuesday, 8^th April at 8:30 am (CEST). During the call, Infineon management will comment on the strategic rationale and financial aspects of the transaction and answer related questions. A replay of the conference call will be available for download on Infineon's website at www.infineon.com/investor.

About Infineon

Infineon Technologies AG is a global semiconductor leader in power systems and IoT. Infineon drives decarbonization and digitalization with its products and solutions. The Company had around 58,060 employees worldwide (end of September 2024) and generated revenue of about €15 billion in the 2024 fiscal year (ending 30 September). Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the OTCQX International over-the-counter market (ticker symbol: IFNNY).

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Further information is available at www.infineon.com

This press release is available online at www.infineon.com/press

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Contact:

Andre Tauber
Infineon Technologies AG
Head of Strategy and Business Communications
CP CC SBI
Office: +49 89 234 36705
Mobile: +49 175 4077932
Andre.Tauber@infineon.com

 

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SOURCE Infineon Technologies AG

FAQ

How much is Infineon (IFNNY) paying for Marvell's Automotive Ethernet business?

Infineon is acquiring Marvell's Automotive Ethernet business for US$2.5 billion in an all-cash transaction.

What revenue is expected from the acquired Marvell Ethernet business in 2025?

The business is expected to generate revenue of US$225-250 million in calendar year 2025.

What is the design-win pipeline value for IFNNY's newly acquired Ethernet business?

The business has a design-win pipeline of approximately US$4 billion until 2030.

How many automotive manufacturers does the acquired Marvell Ethernet business serve?

The business serves more than 50 automotive manufacturers, including 8 of the 10 leading OEMs.

What is the gross margin of the Marvell Automotive Ethernet business being acquired by IFNNY?

The business has a gross margin of approximately 60%.