Marvell to Buy Lumentum for $115 Billion in All-Stock Deal

Marvell Technology has signed a definitive merger agreement to acquire Lumentum at an enterprise value of $115 billion. According to a joint press release issued by the two companies on November 2, the transaction will be completed entirely in stock and will bring two significant players in data center optics together under one roof.

Under the terms, Lumentum shareholders will receive 4.5 Marvell shares for each share they own. The companies put that ratio at roughly $1,132 per share, a premium of 23.9 percent to Lumentum's undisturbed closing price on October 28, the last trading day before news of the deal began to move the stock.

Deal terms and timeline

After the merger, existing Marvell shareholders will own about 67 percent of the combined company and Lumentum shareholders about 33 percent. Reports describe the transaction as the second-largest deal in the technology sector to date, behind the merger of SpaceX and xAI.

Both boards approved the agreement unanimously. The deal is expected to close in the first half of 2028, subject to regulatory and shareholder approval, so a long road and several approval processes still lie ahead.

The latest link in Marvell's optical chain

The Lumentum move continues Marvell's expansion in optical infrastructure. In 2021 the company bought Inphi for $10 billion, and it completed the acquisition of optical interconnect startup Celestial AI in February 2026 with an upfront payment of $3.5 billion. Each deal brought in a different piece of optical connectivity, one of the critical layers of AI infrastructure.

Marvell already offers optical DSPs, silicon photonics and high-speed SerDes solutions. With Lumentum, it would position itself as a broad optical interconnect supplier, covering links between data centers, networking inside them, and the emerging accelerator-level connections.

Why data centers are moving from copper to light

Modern AI data centers link thousands of accelerators that exchange enormous volumes of data. The copper cables traditionally used between racks run into physical limits as data rates and distances grow, and they stop being practical beyond roughly one to two meters. The industry's answer has been to carry data as light rather than electrical signals.

Optical transceivers and fiber cables have already replaced copper for rack-to-rack and longer links. Pluggable transceivers contain a laser chip, DSP chips and various optical components; they convert the accelerator's electrical signal to light, send it over fiber, and convert it back to an electrical signal at the receiving end.

The industry is now looking at moving optics directly into the processor package, through co-packaged optics and near-package optics. In conventional packages, signals leaving the logic chip travel centimeters over copper traces on the board to reach the transceiver. With co-packaged optics, the optical engine is taken out of the pluggable module and placed as a photonic integrated circuit directly on the switch or accelerator package, shortening the electrical path.

Two complementary portfolios

The optical interconnect market spans several critical technologies. On the electronics side, semiconductors such as high-speed SerDes and optical DSPs prepare and process electrical signals, while analog components such as drivers and TIAs interface with the optical hardware. Photonic integrated circuits manage light using microscopic structures such as waveguides, modulators and photodetectors, encoding information onto light and converting received light back into electrical signals. An optical engine, whether in a pluggable module or directly on a board, still needs a laser, which points to a separate specialty within semiconductor manufacturing.

Marvell covers much of the electronics side: custom AI accelerators, Ethernet switches, SerDes interfaces, DSPs, optical drivers, TIAs and silicon photonics. Lumentum supplies a range of optical components, including high-performance lasers, modulators, photodetectors, optical transceivers and optical circuit switches. Combining the portfolios would let Marvell design and optimize electrical and optical components together as parts of one system, enabling more complete solutions.

Perhaps the most strategically important element is Lumentum's expertise in compound semiconductors such as indium phosphide (InP), which is critical for lasers and other optical chips. Silicon is inefficient at generating light because of its indirect bandgap, whereas InP-based structures can emit and detect light efficiently, making the material well suited to producing the high-performance lasers and other optical components used in high-speed communication systems.

Lumentum also brings manufacturing experience to the merger. Unlike Marvell's largely fabless semiconductor business model, Lumentum directly controls front-end semiconductor fabrication processes.