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GlobalFoundries and Marvell Expand Chip Deal to Meet AI Data Center Demand
GlobalFoundries and Marvell Technology have expanded a multi-year agreement to increase manufacturing capacity for specialized semiconductors essential for high-speed connectivity in data centers. The announcement, reported by Reuters, sent shares of both companies higher in premarket trading Thursday.
Details of the Agreement
The expanded deal focuses on boosting production of GlobalFoundries' silicon germanium (SiGe) technology. This process enables the creation of faster and more energy-efficient semiconductors used in optical networking.
Production will be scaled up at GlobalFoundries' manufacturing facility in Burlington, Vermont. The increased capacity is intended to help Marvell meet its supply needs for a range of advanced optical products, including pluggable optical transceivers, near-packaged optics, and co-packaged optics.
AI Boom Drives Demand
AdThe collaboration addresses the surging demand for high-performance optical connections, a direct consequence of the rapid growth in artificial intelligence infrastructure. As AI models and data volumes expand, data centers require faster internal networking to function efficiently, driving the need for advanced SiGe components.
"Our expanded collaboration with GF will help ensure we have the SiGe technology and manufacturing capacity to support the significant growth we see ahead," said Robb Johnson, Vice President of Foundry Technology at Marvell, in a statement.
Market Reaction
Investors reacted positively to the news on Thursday. In premarket trading following the announcement, shares of GlobalFoundries (GFS) rose nearly 6%, while Marvell Technology (MRVL) shares were up 4.5%.
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