Marvell agrees to buy Lumentum, uniting AI chips and optics

Marvell agreed on November 2 to acquire optical-components maker Lumentum in an all-stock transaction implying a $115 billion enterprise value for Lumentum. The companies aim to combine chips and lasers for AI data-center connections, with completion expected in the first half of 2028.

For customers designing AI servers, the proposed change is a supplier able to design electronics and optics together. A joint investor presentation maps existing optical connections between data centers and racks toward more tightly integrated links near computing chips. It describes a transition from discrete modules to customer-specific integration.

Each Lumentum common share would receive 4.500 Marvell common shares under a fixed exchange ratio. The announced equivalent of about $1,132 per share represents a 23.9% premium using both companies’ unaffected October 28 closing prices. Existing Marvell and Lumentum holders would own approximately 67% and 33%, respectively, on a fully diluted basis.

The presentation pairs Marvell signal-processing electronics with Lumentum lasers inside optical modules. Its longer-term designs place optical engines close to processors and switches to address bandwidth density, latency and power requirements. The companies present these as integration paths for the combined business.

Co-packaged optics, or CPO, moves electrical-to-optical conversion close to the main semiconductor. In a November 3, 2025 technical explanation, Marvell said shorter copper traces can reduce signal-conditioning power, with benefits dependent on the application.

Its reference designs include detachable optical connections and front-mounted laser modules for easier service access and cooler operation. Marvell identifies cabling, cooling and serviceability as design considerations alongside power consumption. These interfaces help explain the engineering scope of the proposed combination.

Optical circuit switches instead change the light path itself. Lumentum’s existing R300 description specifies microscopic electromechanical mirrors that establish direct paths between endpoints, avoiding intermediate optical-to-electrical-to-optical conversion. The company markets that approach for reducing latency and network power in large GPU clusters. Lasers, optical modules and circuit switches therefore cover light generation, transmission and path selection within the proposed portfolio.

Lumentum’s results released the same day provide context for the optical demand behind the acquisition. Revenue for its fiscal first quarter, ended September 26, reached $1.2626 billion, up 136.5% from a year earlier. CEO Michael Hurlston identified pump lasers and optical circuit switches as leading contributors to growth.

Hurlston also reported a second major near-packaged/co-packaged optics design win, backed by purchase commitments exceeding $5 billion. Lumentum forecast next-quarter revenue of $1.575 billion to $1.625 billion. The commitments describe prospective business, while the quarterly revenue figure measures sales already recognized for the period.

Completion requires Lumentum shareholder approval of the merger agreement and Marvell shareholder approval of the share issuance and an increase in authorized shares. Antitrust clearance, other required regulatory approvals and effectiveness of the registration statement are also conditions. The companies plan an S-4 containing their joint proxy statement.

The agreement, signed November 1, sets an initial outside date of November 1, 2027, at 11:59 p.m. Pacific Time. Under specified regulatory conditions, extensions can run through February 1, May 1 and August 1, 2028. Those contractual termination dates differ from the expected closing timetable.