Tech
Marvell to Buy Lumentum in $115 Billion Deal in AI Data-Centre Bet
Marvell Technology is buying optical components maker Lumentum in a $115 billion all-stock deal, one of the biggest of 2026, betting that Big Tech's AI spending boom will keep demand for high-speed optical parts outstripping supply.
Photo: Hustvedt / Wikimedia Commons (freely licensed). Photo shows a generic optical fibre cable, not a Marvell or Lumentum product.
Marvell Technology is buying optical components maker Lumentum in a $115 billion all-stock deal, including debt, as the custom chipmaker steps up its challenge to larger rival Broadcom during an AI spending boom.
The deal, announced on Monday, is one of the biggest in 2026 and among the boldest corporate bets yet on an AI boom that chip executives expect to underpin industry demand for years.
Under the agreement, Marvell will pay $1,132 per share in stock, a 23.9% premium to Lumentum's last unaffected closing price on October 28, before deal talks were first reported. That gives the deal an equity value of $102.54 billion.
By buying Lumentum, a company roughly half its size, Marvell is betting that Big Tech's AI spending boom is here to stay and would keep demand for optical components used to move data at high speeds outstripping supply. Marvell said the deal would expand the combined company's total addressable market to $550 billion. Its shares were up 2.8% in premarket trading, while trading in shares of Lumentum was halted.
AI chip giant Nvidia invested $2 billion each in Marvell and Lumentum earlier this year. Just three years ago, Marvell was a relatively little-known chipmaker, but its market value has since surged to more than $170 billion, thanks to its role in helping tech giants such as Amazon develop custom AI chips and networking technology for data centres.
Marvell notched one of its biggest wins in August, signing a deal to supply chips that sit alongside Google's AI processors worth up to $120 billion in sales through fiscal 2033, giving the search giant the right to buy a $12.2 billion stake.
Monday's deal could also add more muscle to Marvell in its race with rival Broadcom, which has long been Alphabet-owned Google's main custom-chip partner and offers customers a broader menu of AI data centre hardware under one roof.
Lumentum, which competes with US-listed Coherent and China's Zhongji Innolight, stands to benefit from a proposed US ban on new Chinese optical transceivers that could shift demand toward domestic suppliers.
Marvell has already been beefing up its photonics business this year. It closed a $3.5 billion purchase of Celestial AI in February as rising use of AI agents and chatbots drives demand for faster optical links connecting thousands of chips in AI data centres.
Since the Marvell-Lumentum talks were first reported late last month, Lumentum's shares have fallen about 8% and Marvell about 22%, as a broad-based chip selloff accelerated following Intel's weak forecast. Marvell's acquisition of Lumentum is its largest purchase since its $10 billion buyout of Inphi in 2021, and its annual revenue has more than doubled from $3 billion in fiscal 2021 to $8.2 billion in fiscal 2026.
Source: Reuters
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