NVIDIA Acquires Mellanox: Beyond the Numbers

Subject: Editorial | March 12, 2019 - 10:14 PM |
Tagged: nvswitch, nvlink, nvidia, Mellanox, Intel, Infiniband, Ethernet, communications, chiplets, amd

In a bit of a surprise this past weekend NVIDIA announced that it is purchasing the networking company Mellanox for approximately $6.9 billion US. NVIDIA and Intel were engaged in a bidding war for the Israel based company. At first glance we do not see the synergies that could potentially come from such an acquisition, but in digging deeper it makes much more sense. This is still a risky move for NVIDIA as their previous history of acquisitions have not been very favorable for the company (Ageia, Icera, etc.).

633889_NVLogo_3D_H_DarkType.jpg

Mellanox’s portfolio centers around datacenter connectivity solutions such as high speed ethernet and InfiniBand products. They are already a successful company that has products shipping out the door. If there is a super computer somewhere, chances are it is running Mallanox technology for high speed interconnects. This is where things get interesting for NVIDIA.

While NVIDIA focuses on GPUS they are spreading into the datacenter at a pretty tremendous rate. Their NVLink implementation allows high speed connectivity between GPUS and recently they showed off their NVSwitch which features 18 ports. We do not know how long it took to design the NVSwitch and get it running at a high level, but NVIDIA is aiming for implementations that will exceed that technology. NVIDIA had the choice to continue in-house designs or to purchase a company already well versed in such work with access to advanced networking technology.

Intel was also in play for Mellanox, but that particular transaction might not have been approved by anti-trust authorities around the world. If Intel had made an aggressive bid for Mellanox it would have essentially consolidated the market for these high end networking products. In the end NVIDIA offered the $6.9B US for the company and it was accepted. Because NVIDIA has no real networking solutions that are on the market it will likely be approved without issue. Unlike other purchases like Icera, Mellanox is actively shipping product and will add to the bottom line at NVIDIA.

mellanox-logo-square-blue.jpg

The company was able to purchase Mellanox in a cash transaction. They simply dove into their cash reserves instead of offering Mellanox shareholders equal shares in NVIDIA. This $6.9B is above what AMD paid for ATI back in 2006 ($5.4B). There may be some similarities here in that the price for Mellanox could be overvalued compared to what they actually bring to the table and we will see write downs over the next several years, much as AMD did for the ATI purchase.

The purchase will bring them instant expertise with high performance standards like InfiniBand. It will also help to have design teams versed in high speed, large node networking apply their knowledge to the GPU field and create solutions better suited for the technology. They will also continue to sell current Mellanox products.

Another purchase in the past that looks somewhat similar to this is AMD’s acquisition of SeaMicro. That company was selling products based on their Freedom Fabric technology to create ultra-dense servers utilizing dozens of CPUs. This line of products was discontinued by AMD after poor sales, but they expanded upon Freedom Fabric and created the Infinity Fabric that powers their latest Zen CPUs.

I can see a very similar situation occurring at NVIDIA. AMD is using their Infinity Fabric to connect multiple chiplets on a substrate, as well as utilizing that fabric off of the substrate. It also has integrated that fabric into their latest Vega GPUs. This philosophy looks to pay significant dividends for AMD once they introduce their 7nm CPUs in the form of Zen 2 and EPYC 2. AMD is not relying on large, monolithic dies for both their consumer and enterprise parts, thereby improving yields and bins on these parts as compared to what Intel does with current Xeon parts.

mellanox-quantum-connectx-6-chips-652x381.jpg

When looking at the Mellanox purchase from this view, it makes a lot of sense for NVIDIA. With process node advances moving at a much slower pace, the demand for higher performance solutions is only increasing. To meet this demand NVIDIA will be required to make efficient, multi-chip solutions that may require more performance and features than what can be covered by NVLINK. Mellanox could potentially provide the expertise and experience to help NVIDIA achieve such scale.

Source: NVIDIA

Intel is thinking even bigger and likely leveraging their McAfee assets

Subject: General Tech | January 24, 2012 - 01:24 PM |
Tagged: Intel, QLogic, purchase, Infiniband, HPC

Intel blew tiny $125 million piece of their record breaking quarterly income to purchase QLogic's InfiniBand business, which gives them access to a networking technology significantly faster than Ethernet.  InfiniBand is what is referred to as a switched fabric technology which allows multiple switches to connect to multiple hosts or data stores as opposed to the more point to point single broadcast which current ethernet based networks use.

fabric.png

That may look familiar to some, but not as a network technology; it matches the communications architecture behind PCIe and SATA.  As we have seen, the speed difference between parallel connections and serial is quite impressive and InfiniBand's fastest implementation is currently capable of transferring 25 Gbit/s per lane.  That is significantly faster than the 1Gbit/s per lane PCIe 3.0 can provide which is why some current implementations of InfiniBand are used in High Performance Computing (HPC) applications.  InfiniBand also offers incredibly low latency of between 100 to 200 nanoseconds, depending on the implementation.

IB-Roadmap072611.gif

Getting a hold of this interconnect technology gives Intel a huge boost in their capabilities of creating high performance networking technologies.  They have been looking for a way to grow in that area and push out Application Specific Integrated Circuit (ASIC) manufactures from the market, replacing those chips with low power Xeons or future Intel chips.  This would open up an entirely new market for Intel, who could see their already impressive growth increase significantly.  Intel could become even more attractive to customers by taking advantage of the benefits of owning McAfee by placing virus/malware protection directly onto their switches.   We have already seen evidence of one project along these lines at IDF 2011 when they announced the DeepSAFE project which is software that operates below the OS level, providing what they refer to as "hardware-assisted" security.  With that OS-agnostic approach it would be possible to run the security software on a network switch or on an HPC interconnect. That could give Intel not only the fastest interconnect technology but also the most secure.

When discussing this with The Inquirer, Intel's representative Kirk Skaugen stated that this purchase will help Intel design and produce an exaflop level supercomputer by 2018.  It is unlikely that this is Intel's only goal, with the purchase of Fulcrum Microsystems this summer, a company which designs ASICs for Ethernet switches and routers that run at 10Gbit and 40Gbit, they are well on their way to designing network switches for HPC applications.  The Register ponders what this could mean for companies which have used InfiniBand technology in their products.  Will they be snatched up by a networking company like Cisco, could AMD pick them up and provide competition in this industry or will they consider offering themselves to Intel the best alternative?  We will be keeping an eye on this as it will not only develop into the next generation of networking technology but could also drive the successor to PCIe.

012_julich1.jpg

"The high-performance networking market just got a whole lot more interesting, with Intel shelling out $125m to acquire the InfiniBand switch and adapter product lines from upstart QLogic.

Intel has made no secret that it wants to bolster its Data Center and Connected Systems business by getting network equipment providers to use Xeon processors inside of their networking gear – that Intel division posted $10.1bn in revenues in 2011, and the company wants to break $20bn in the next five years."

Here is some more Tech News from around the web:

Tech Talk

 

Source: The Register