Marvell and GlobalFoundries Rise on Expanded SiGe Deal

Shares of Marvell Technology, Inc. (NASDAQ:MRVL) and GLOBALFOUNDRIES Inc. (NASDAQ:GFS) rose sharply on September 17. Marvell gained more than 4%, while GlobalFoundries rose more than 6% by the session's close.

The rally followed a Reuters report that the two companies expanded a multi-year agreement to increase production capacity for silicon germanium (SiGe). This semiconductor technology is key for high-speed optical connections in data centers. The expanded capacity will be at GlobalFoundries' facility in Burlington, Vermont.

SiGe allows chips to operate faster while using less energy. This is increasingly important as data centers handle larger volumes of information.

The Expanded Partnership

Robb Johnson, Vice President of Foundry Technology at Marvell, said the collaboration ensures the company has the "SiGe technology and manufacturing capacity to support the significant growth" it anticipates. The increased capacity will help Marvell meet demand for optical networking products. These include pluggable optical transceivers, near-packaged optics, and co-packaged optics.

The two firms are not direct competitors. They are complementary partners in the semiconductor supply chain. Both have direct exposure to growing demand for AI data center infrastructure.

GlobalFoundries' Strong Demand

Recent results show why the expanded capacity is a potential growth driver for GlobalFoundries. The company reported $1.786 billion in revenue for the second quarter of 2026. This was a 6% increase year over year.

Strong demand from its communications infrastructure and data center end market supported the results. This segment accounted for about 16% of total Q2 2026 revenue. Revenue from this end market increased 20% sequentially and 62% year over year. It marked the seventh straight quarter of double-digit yearly growth and its fastest quarterly growth since 2022.

Within this market, GlobalFoundries is seeing strong customer demand for its silicon photonics and SiGe offerings. CEO Tim Breen said demand for SiGe remains strong. The company is "oversubscribed throughout 2027."

Marvell's AI-Driven Growth

Marvell continues to benefit from surging demand for AI-focused data center infrastructure. In the second quarter of fiscal 2027, it reported record net revenue of $2.739 billion. This represented 37% year-over-year growth.

Chairman and CEO Matt Murphy said AI-related bookings remain exceptionally robust. The company expects revenue growth to accelerate through the rest of fiscal 2027. Marvell raised its revenue outlook for fiscal 2027 and fiscal 2028 compared to prior guidance.

The company is seeing broad-based strength across its data center portfolio. It expects strong demand in Connectivity and a significant acceleration in its Custom business starting in the second half of fiscal 2027.

Risks remain. Lower capital spending by cloud providers or greater development of in-house chips could pressure its market share. Competition is also intense.

Investor Positioning and Valuation

Hedge fund interest in both companies increased in the second quarter. According to Insider Monkey's database, 46 hedge funds held GlobalFoundries stock at the end of Q2, up from 44 in Q1. Marvell saw a larger increase, with 96 hedge fund portfolios holding the stock, compared to 79 in the previous quarter.

Short interest and valuation metrics show clear differences between the two stocks.

Marvell appears to be delivering faster overall revenue growth with strong AI bookings. Its high valuation leaves little room for disappointment if AI spending slows. GlobalFoundries offers visible SiGe demand through 2027 and a lower valuation. Its higher short interest points to greater market skepticism.