Copper wiring is running out of room inside the data centers being built for artificial intelligence, and Marvell is paying in its own stock to secure the optical alternative. The chip designer agreed to buy Lumentum, a San Jose maker of lasers and optical transceivers, offering 4.500 Marvell shares for each Lumentum share in a deal that puts Lumentum's enterprise value at $115 billion and carries a premium of about 24% to the undisturbed price, the companies said in a release. Lumentum investors would hold a minority stake in the enlarged company, with Marvell's existing holders keeping control.
Marvell has spent much of the past decade assembling connectivity assets through acquisition. It designs the electrical side of the data center link, from digital signal processors and laser drivers to Ethernet switches and custom accelerators for cloud customers. Earlier deals brought in Cavium and Inphi, and the pace has not slowed. Revenue reached $8.2 billion in fiscal 2026 (ended January 31, 2026) as operating income swung to $1.3 billion after losses in each of the two prior years, and the company closed its purchase of optical interconnect startup Celestial AI in February, its filings show. The Lumentum agreement moves Marvell from buying optical chips to owning the factories that make lasers.
What Lumentum adds is the light itself. Its indium phosphide lasers, transceivers and optical circuit switches come with specialized compound-semiconductor manufacturing, which the buyer frames as a way to tighten supply and design electrical and optical parts together. The companies estimate yearly cost savings above $1 billion at run rate, anticipate closing in the first six months of calendar 2028 and plan for Matt Murphy to stay on as chairman and chief executive with three Lumentum directors joining the board, the release said. Completion depends on stockholder votes at both companies and on regulatory clearances, with a joint proxy still to be filed.
The announcement doubled as a progress report on the current quarter. Preliminary revenue for the third quarter of fiscal 2027 came in consistent with earlier guidance, with the midpoint unchanged and the range tightened to plus or minus 2% from plus or minus 5%, Marvell said. The merger agreement was disclosed in a Form 8-K filed Monday, the SEC filing shows. Semiconductor combinations of this scale typically pass through antitrust reviews in several jurisdictions before closing. Until the votes and reviews are complete, the two companies continue to operate independently.