SoftBank once considered acquiring Marvell and merging it with ARM to create a chip giant.

Earlier this year, SoftBank Group explored a potential deal to acquire American chipmaker Marvell Technology, aiming to merge it with its chip design subsidiary ARM to create a semiconductor giant for the artificial intelligence race.

On November 6th, according to Bloomberg citing sources familiar with the matter, SoftBank expressed interest in acquiring Marvell several months ago, but the two sides failed to agree on terms. Currently, there are no active negotiations between the parties.

After the news broke, Marvell's stock price surged by up to 13% on the alternative trading platform Blue Ocean during Asian trading hours. So far this year, the company's shares have fallen by 18% in total, with a market value of around $80 billion. By contrast, the stocks of Nvidia, Broadcom, and ARM have all risen sharply this year.

(Marvell Technology has fallen over 18% so far this year)

Masayoshi Son’s AI Ambitions

Driven by a boom in the construction of AI data centers, the AI chip market holds enormous potential, providing strong impetus for SoftBank's strategic expansion.

According to media reports citing sources familiar with the matter, Masayoshi Son has sporadically studied the feasibility of acquiring Marvell as a potential target for years.

However, even if SoftBank restarts negotiations, the deal would still face major obstacles.

First, the deal price may approach $100 billion, making it a massive investment.

Second, the deal would face strict regulatory scrutiny. Although Masayoshi Son has close ties with U.S. President Trump, the U.S. government is committed to developing its domestic semiconductor industry, and it remains unclear whether it would approve a Japanese company’s acquisition of a key American chipmaker.

Additionally, antitrust review is a significant challenge. Previously, regulators in the U.S., Europe, and China forced Nvidia to abandon its acquisition of ARM in 2020.

Finally, sources reported by the media revealed that ARM and Marvell have failed to reach agreement on the integration of their management teams. ARM's CEO Rene Haas is 63 years old, while Marvell’s CEO Matthew Murphy is just over 50.

Marvell’s Opportunities and Challenges

Marvell was once highly sought after in the market for the prospects of its custom chip business, with customers including Amazon’s cloud division and Microsoft.

Led by CEO Matthew Murphy, Marvell specializes in designing and developing semiconductor chips and related technologies for data centers, and reported a record revenue of $2 billion in the quarter ending August 2.

However, its performance has not been smooth sailing. In March this year, Marvell’s stock suffered its worst single-day drop in more than twenty years after its revenue forecast missed the highest expectations.

Meanwhile, Broadcom, its main rival in the custom AI chip sector, has successfully won new customers such as OpenAI. Some analysts have expressed concerns about the predictability of Marvell’s future business.

In September this year, due to customer uncertainty, TD Cowen downgraded its rating to “Hold.” With a market value of about $80 billion, ARM's market value has reached about $170 billion.

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