Marvell Buys Lumentum for $115B to Chase AI Optical Data Infrastructure

American semiconductor company Marvell is acquiring optical component manufacturer Lumentum for $115 billion, according to a report by Reuters. The deal unites two firms backed by Nvidia and aims to help Marvell compete more aggressively against Broadcom for artificial intelligence investments.

Following the announcement, Marvell shares dropped more than 10%, reflecting analyst concerns that the chipmaker is taking on excessive obligations. The equity-value portion of the transaction stands at $102.5 billion—more than half of Marvell's market capitalization and over ten times the cost of its previous largest acquisition, the $10 billion purchase of Inphi in 2021. Lumentum shares fell more than 15%.

Marvell is banking on massive demand for optical components, which transmit data to high-cost processors at ultra-high speeds as modern data centers link thousands of chips together faster than traditional copper wiring allows. Marvell CEO Matthew Murphy stated that AI infrastructure is undergoing a generational shift toward optical communications. Murphy also highlighted that Nvidia previously invested $2 billion in each company, calling the merger a double endorsement from Nvidia.

If the deal falls through, termination fees include $5.8 billion payable by Marvell or $2.9 billion payable by Lumentum, alongside a $3.2 billion regulatory breakup fee. The companies aim to close the transaction in the first half of 2028, targeting over $21 billion in annual combined revenue.

Source: habr