Marvell Technology Inc. has agreed to sell its Automotive Ethernet business to Infineon Technologies AG in a cash deal valued at $2.5 billion. The transaction includes Marvell's Brightlane® Automotive Ethernet portfolio and associated assets, and is expected to close by the end of 2025, pending regulatory approvals and other closing conditions.

The automotive Ethernet business, which serves over 50 automotive manufacturers, is expected to generate $225-250 million in revenue for Infineon in fiscal 2026, with a gross margin of approximately 60%. The acquisition is part of Infineon's strategy to enhance its position in automotive technologies, particularly in the realm of software-defined vehicles.

In a statement, Marvell's CEO, Matt Murphy, emphasized that the sale allows the company to focus on its data infrastructure business, which has seen rapid growth, particularly in the data center segment. In its most recent financial report, Marvell's data infrastructure division grew by 78% in the fourth quarter, while its automotive and industrial sectors grew by only 4.1%.

The move aligns with Marvell's shift toward becoming a more AI-centric company, prioritizing custom silicon and networking solutions. Infineon, on the other hand, plans to integrate the acquired business into its Automotive division and leverage its technology to drive further innovation in the automotive sector.

Infineon intends to finance the acquisition using a combination of existing liquidity and additional debt. The deal highlights the growing importance of semiconductor technologies in the automotive industry, particularly in areas like AI and software-defined vehicles.

Marvell will provide further details about the transaction during its first-quarter earnings call, scheduled for May 29, 2025.