Marvell is purchasing Lumentum for $115 billion to address the shift in data centers away from copper-based connectivity as they accelerate the move toward optical technologies to accommodate emerging AI applications. 

Reports about a potential deal emerged last week.

As AI infrastructure scales to increasingly complex architectures, particularly scale-up and scale-in, the industry is shifting from discrete, modular components toward highly integrated optical solutions that require much closer co-design of electrical and optical technologies to deliver greater bandwidth, performance and energy efficiency.

The combined company pairs Marvell's expertise in electrical and optical interconnects, network switching, custom XPU and XPU attach, and advanced semiconductor technologies with Lumentum's high-performance lasers, optical transceivers, optical circuit switching (OCS), and specialized compound semiconductor manufacturing.

After the deal closes, the combined company will offer what it says is a highly complementary portfolio spanning leading-edge CMOS, silicon photonics, compound semiconductors, advanced packaging and manufacturing capabilities. In particular, the new company will enable deeper integration and co-design across the electrical and optical signal chain, positioning Marvell to deliver highly optimized connectivity solutions across a wide range of distances, from distributed data centers to connections within advanced semiconductor packages.

Another key element of the acquisition is that the new company will have an even broader array of specialized manufacturing capabilities and enhanced R&D resources.

Lumentum brings advanced compound semiconductor manufacturing and process technologies, including indium phosphide (InP), as well as high-speed and high-power laser capabilities. When the deal closes, the combined company plans to bring together semiconductor design, advanced packaging, and specialized manufacturing capabilities to enable deeper heterogeneous integration, strengthen strategic supply, and accelerate the development of next-generation optical technologies.

From a financial perspective, the deal expands the combined company’s total addressable market to $550 billion and strengthens its ability to serve customers in emerging scale-up and scale-in markets.

Under the terms of the stock agreement, Lumentum stockholders will receive a fixed exchange ratio of 4.5 shares of Marvell common stock for each share of Lumentum common stock they own. When the acquisition closes in 2028, current Marvell stockholders will own approximately 67% of the combined company on a fully diluted basis, while Lumentum stockholders will own approximately 33%.

Upon closing, Matt Murphy will continue as Chairman and CEO of the combined company. As part of the transaction, three members of Lumentum's Board of Directors, including Lumentum CEO Michael Hurlston, will join Marvell's Board, which currently consists of seven directors.

After Marvell and Lumentum stockholders approve, regulatory approvals are received, and other customary closing conditions are met, the acquisition is set to close in the first half of 2028.

“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” said Matt Murphy, Marvell's Chairman and CEO. “The companies that move first and help define this transition will set the standard for decades to come.”

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