The deal is not imminent and may not take place while talks are still at an early stage and Mellanox is not saying anything on the record.

For those who came in late, Mellanox is based in Israel and the United States and makes chips and other hardware for data center servers that power cloud computing. The company has a market capitalisation of about $4 billion.

Activist investor Starboard Value, which took a stake of 10.7 percent in the company last year, had raised concerns about Mellanox’s rejection of a potential merger with Marvell. It has been critical of the company’s financial performance and has also called its 2018 financial targets “insufficient”.

Mellanox struck a settlement with Starboard in June to appoint new board members and name a director if the company failed to meet certain operating goals. Starboard has cut its stake in the company to about 8.6 percent in July but still remains its largest shareholder.