The semiconductor industry is a tough area to operate in and it is a dog-eat-dog world, and now it looks like Marvell Technology Group could be the next to be swallowed by a bigger dog on the market. According to an article in the New York Post, the chip maker could be up for sale and Broadcom/Avago could be the possible buyer.
This isn’t the first time that we’ve heard of Avago’s interest in Marvell. Last July several news outlets reported that Avago was interested in the purchase, but was holding their bid until the Broadcom and Avago merger was completed.
It hasn’t gone all that good for Marvell lately despite them making some great chips that we see all the time here in the office when we review products. For example, last month they reached a settlement with Carnegie Mellon University for $750 million and they have also just been through an audit for alleged fraud. They were however cleared in the audit and there wasn’t found any evidence of wrongdoing or accounting fraud as the allegations said.
Still, the stock has been on a steady decline as the semiconductor business generally has been going down and stockholders demand that the company cuts costs. After the stock dove about 40 percent of the past year, it doesn’t come as a big surprise that the stockholders demand some action.
Whether Broadcom (AVGO) will make an official bid or not is something time will tell and I’m sure that there will be a lot of details to iron out between the two before they’ll reach an agreement, if they do at all. There is however also some doubt on whether such a merger could result in an antitrust scrutiny as some of the areas of the two overlap, such as Wi-Fi, Bluetooth, and Ethernet switching chips, among others.