Marvell bets $115 billion on the wires behind the AI boom
An all-stock deal would combine Marvell's chips with Lumentum's optical technology, with a close targeted for 2028.
The chips doing the calculations get most of the attention. Marvell's next big bet is on moving the data between them: it has agreed to buy optical-components maker Lumentum in an all-stock deal with an implied enterprise value of $115 billion.
Under the agreement announced Monday, Lumentum shareholders would receive 4.5 Marvell shares for each Lumentum share. The exchange ratio is fixed, so the market value of what they receive will move with Marvell's share price. This is a proposed combination, not a completed acquisition.
Why the connection matters
The companies describe a combination of Marvell's electrical and optical interconnect, switching and custom-chip technology with Lumentum's lasers, optical transceivers and optical circuit switching. Their aim is to design more of the connection together, rather than supply separate pieces.
That is a different part of the AI spending story from the processors themselves. As systems grow, getting data between chips and across data centers becomes part of the engineering challenge. The companies are betting that closer integration of electrical and optical technology can help meet it.
A long road to closing
The boards have approved the agreement, but shareholders of both companies and regulators still need to approve it. Closing is expected in the first half of 2028, subject to those approvals and other customary conditions.
The companies project more than $1 billion in annual run-rate cost savings and expect the deal to add to Marvell's non-GAAP earnings per share in the first year after closing. Those are management expectations, not benefits already achieved.
For now, the distinction is simple: the agreement and exchange terms are set; whether the combined business delivers the promised gains is a question for after the approvals and integration.
