Chipmaker Marvell Technology is acquiring optical components manufacturer Lumentum in a deal valued at $115 billion, CNBC reported. The custom chipmaker is stepping up competition with its larger rival, Broadcom, amid a wave of investment in artificial intelligence.
The acquisition is considered one of the largest deals of 2026 and a bold bet on demand for AI infrastructure, which semiconductor industry executives say will continue to support the sector in the coming years. Marvell expects major technology companies to maintain their heavy investment in AI infrastructure for some time and demand for optical components used to transmit data at high speeds to continue outstripping supply.
Marvell Technology
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Earlier this year, Nvidia invested approximately $2 billion in each of the two companies, Marvell and Lumentum. Just three years ago, Marvell was a relatively little-known chipmaker. Since then, its market capitalization has surged to more than $170 billion, partly thanks to its role in helping technology giants such as Amazon develop custom AI chips and data center communications technologies.
In June, Marvell's stock received another boost when Nvidia CEO Jensen Huang called it "the next trillion-dollar company." Marvell's annual revenue has more than doubled, rising from $3 billion in fiscal 2021 to $8.2 billion in fiscal 2026.
The deal could also strengthen Marvell's position in its rivalry with Broadcom, which has long been a key partner of Google in developing custom chips and offers customers a broader range of AI data center hardware under one roof.
In August, Marvell scored one of its biggest wins when it signed an agreement to supply chips that operate alongside Google's AI processors, with sales potentially reaching $120 billion by fiscal 2033. Under the agreement, Google secured the right to acquire a $12.2 billion stake in Marvell.
Lumentum, which competes with U.S.-listed Coherent and Chinese manufacturer Zhongji Innolight, is also likely to benefit from a U.S. proposal to ban imports of new Chinese-made optical transceivers, a move that could shift demand toward domestic suppliers.
Marvell has already been working to expand its photonics business this year. In February, it completed its $3.5 billion acquisition of Celestial AI amid growing use of AI agents and chatbots, which is driving demand for faster optical connections between thousands of chips in AI data centers. The acquisition of Lumentum would be Marvell's largest since its $10 billion purchase of Inphi in 2021.
Under the terms of the agreement, Marvell will pay $1,132 per share, representing a 23.9% premium over Lumentum's closing share price on October 28. The deal was unanimously approved by the boards of both companies, which expect the transaction to close in the first half of 2028.