Marvell Technology Group Ltd. is nearing a deal to buy Inphi Corp. for as much as $10 billion, according to people familiar with the matter, in what would be the second big semiconductor tie-up this week as the industry rapidly consolidates.

The companies could announce a deal as soon as Thursday, assuming the talks don’t fall apart, the people said.

Marvell MRVL, -4.67%, which has a market value of roughly $26 billion, primarily makes chips used in data storage and networking. Buying Inphi IPHI, -2.55% would help Marvell expand its reach in networking, a fast-growing segment that has helped push Inphis stock up roughly 50% this year.

The semiconductor industry is in the midst of a full-fledged merger frenzy, all the more surprising in the middle of a pandemic. It has been fueled by surging demand for laptops and videogames, with people stuck at home, as well as growth in the data centers that facilitate companies’ shifting business activity online.