Marvell Technology shares jumped as much as 5.4% on Wednesday after a Reuters report said SK Hynix is in talks with Intel to make memory chips in the U.S. for the first time. Marvell already partners with SK Hynix on data-transfer technology, so easing the AI industry's memory chip bottleneck would benefit the company too. SK Hynix confirmed it is exploring the discussions but said no agreement has been reached.
Shares of Marvell Technology (NASDAQ: MRVL) jumped as much as 5.4% on Wednesday, before easing to a 3.5% gain by 11:59 a.m. ET. The move came after a report that first appeared in Reuters said SK Hynix is in talks with Intel to manufacture memory chips in the U.S. for the first time.
SK Hynix and Intel discuss a first-of-its-kind deal
As part of the proposed arrangement, SK Hynix could lease a portion of Intel's chipmaking facility in Ohio, a plant that has faced multiple delays and is expected to become operational in 2030. SK Hynix is also exploring a joint venture with Intel and major cloud providers to lock in a supply of memory chips.
SK Hynix confirmed the talks without committing to a deal. According to the company: "SK Hynix is exploring various options to strengthen its global competitiveness", but it added that no specific plans or arrangements have been finalized.
Why the deal moves Marvell
Marvell and SK Hynix are already partners, working together to accelerate data transfers between processors and memory chips. The memory chip shortage remains one of the biggest bottlenecks holding back AI infrastructure, so any deal that eases the backlog benefits the wider industry, including Marvell.
Marvell shares last traded near $230.21, with a market capitalization close to $194 billion. The stock trades at 34 times next year's expected earnings, and the company's record revenue and accelerating growth suggest it might still be worth a look.
Sources: Motley Fool via Yahoo Finance, The Motley Fool
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