Marvell today announced it will acquire rival chipmaker Inphi for roughly $10 billion in cash and stock options. The announcement marks the second high-profile semiconductor acquisition of the week, following AMD's $35 billion purchase of Xilinx.

As part of the deal, which already received approval from both company's boards of directors, Marvell plans to reorganize the combined company into a single U.S.-based chip giant.

"I couldn't be more excited about this combination, and I believe it will be as transformational for Marvell in the cloud market as Cavium was for us in the 5G market," said Marvell CEO Matt Murphy on an investor call this morning.

Once combined, Marvell boasts the company will represent nearly $40 billion in market value and cover an addressable market worth more than $20 billion a year.

Inphi is a U.S.-based chipmaker specializing in optoelectrical interconnects, commonly used in cloud data centers, where the company can provide up to 800 Gb/s of throughput.

"Marvel's vision is to move, store, process, and secure the world's data faster and more reliably than anyone else, and this acquisition significantly accelerates the move element of our vision," Murphy said, referencing Inphi's optoelectrical interconnect technologies, which he called highly complementary to the company's existing physical layer (PHY) portfolio.

With workloads becoming increasingly distributed across cloud-data centers, higher-speed interconnects become necessary to satiate bandwidth demands, Marvell claims.

"Combining Marvell's copper Ethernet PHY franchise, with the Inphi electro-optical portfolio will create an industry-leading, high-speed data interconnect platform, serving the enterprise, carrier, data center, and automotive markets," Murphy said.

In an article contributed to Forbes, Patrick Moorhead, founder and principal analyst at Moor Insights and Strategy, said the acquisition made sense from both a technical and customer value standpoint. "Inphi adds that longer range, higher speed, lower power, and higher margin photonics networking capability to Marvell's copper-based networking," Moorhead wrote.

The acquisition is expected to close in the second half of 2021 subject to regulatory approval. Inphi CEO Ford Tamer will join Marvell's Board of Directs alongside much of the company's talent.