The Wall Street Journal, which first reported the discussions, said Cavium shareholders would receive a modest premium. The deal could happen in the next few weeks.
Neither company responded to requests for comment.
As of market close on Friday, Cavium had a market value of about $4.5 billion while Marvell was valued at about $9 billion.
Marvell is based in Bermuda with U.S. headquarters in Santa Clara, California. It ships more than 1 billion chips a year and makes storage, networking, and wireless products for the enterprise, cloud, automotive, and industrial markets.
Cavium, based in San Jose, California, makes programmable chip platforms for enterprises, data centers, and carrier networks. China Unicom is using Cavium silicon-based white boxes to test 5G technology in China.