U.S. semiconductor firm Marvell Technology Group Ltd. today said it has completed its $6 billion takeover of rival Cavium Inc. after receiving regulatory approval in China.

The newly combined company packs a broad portfolio of intellectual property and patents that will “unlock significant opportunities” for growth as new kinds of compute workloads emerge, Cavium Chief Executive Officer Syed Ali said in a statement. Marvell said the transaction is likely to generate “at least $150 million to $175 million of annual run-rate synergies within 18 months.”

For its money, Marvell has acquired a respected developer of ARM and MIPS-based system-on-a-chip processors for use in networking, server, storage and other data center applications. Cavium began its life as a developer of storage controllers for hard disk drives and solid-state drives before evolving into a supplier with much greater potential. The idea is that Marvell will now be able to diversify from its primary business selling computer chips for storage gear by expanding into networking equipment.

Still, Marvell has a lot of housecleaning to do, since Cavium has been massively unprofitable of late. In 2017 the company posted a $68.9 million loss on revenue of $98 million, following a $147.2 million loss the previous year.

Marvell’s books aren’t exactly a pretty picture, either. The company posted revenue of $2.1 billion for the year ending Feb. 3, but pulled in a measly operating income of just $429,700. Marvell’s problems are said to stem from a steady decline in hard disk drives, which are being taken over by better-performing solid-state drives for high-performance data center applications.

By acquiring Cavium’s assets, which include its ARM chips and SoCs plus its storage host bus adapters, Marvell should be able to diversify itself into more of a general infrastructure semiconductor firm. However, it could be a bloody operation, since the company will need to stem Cavium’s losses and that could involve a lot of cost-cutting measures, and likely some job losses, The Register reported.

“As networking becomes increasingly software-defined and integrated onto a system on a chip, networking companies feel the pressure to integrate,” Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told SiliconANGLE when the deal was announced.

“With the deal going final, Marvell picks up an enterprise and carrier-worthy data center play,” the analyst said today. “Cavium is one of the few big compute ARM-based data center players to make headway, particularly among networking applications.”

The acquisition is the latest in a series of moves toward consolidation in the semiconductor industry, with smaller players either selling themselves or pursuing mergers to try to compete better against powerhouses such as Intel Corp. and Qualcomm Technologies Inc.

Examples of this consolidation merry-go-round include Qualcomm buying the Dutch firm NXP Semiconductors N.V. for $44 billion, Broadcom Inc.’s failed takeover attempt of Qualcomm and rumors that Intel is itself interested in buying Broadcom.

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