--- title: Marvell Will Buy Lumentum for $115 Billion to Own the Lasers That Connect AI Chips description: Marvell will pay $1,132 a share in stock for Lumentum, a 23.9% premium. What Lumentum makes, who it competes with and what the deal means for AI optics. author: Dr Marina Nani (Editor-in-Chief) date: 2026-11-03T09:30:47.790Z updated: 2026-11-03T09:30:47.813Z canonical: https://www.sovereignmagazine.com/article/marvell-lumentum-acquisition-115-billion image: https://cdn.nanimediahouse.com/pexels-4864249.webp categories: Markets, Science & Tech content_type: News region: United States publication: Sovereign Magazine about: - type: Organization name: Marvell Technology description: US chipmaker that designs custom AI processors and networking chips for data centres. url: https://www.marvell.com industry: Semiconductors - type: Organization name: Lumentum description: US maker of lasers, transceiver modules and optical subsystems used in AI and cloud data centres, telecom networks, 3D sensing and manufacturing. url: https://www.lumentum.com industry: Optical and photonic products --- Marvell Technology agreed on Monday 2nd November to buy Lumentum, the maker of lasers and optical parts that carry data between AI chips, in an all-stock deal that values Lumentum at $115 billion including debt. Marvell will pay $1,132 a share in its own stock, a premium of 23.9% to Lumentum's closing price on 28th October, the last trading day before talks between the two companies were first reported. The deal has an equity value of $102.54 billion, Reuters reported. If you hold Lumentum shares, you will receive 4.5 Marvell shares for each one, and Lumentum's shareholders together will own about 33% of the combined company on a fully diluted basis. The exchange ratio is fixed, so the value of the offer rises and falls with Marvell's share price. Three Lumentum directors, including chief executive Michael Hurlston, will join Marvell's board, which has seven members today, according to the announcement the companies filed with the US Securities and Exchange Commission. ## The Marvell and Lumentum Deal in Numbers - Enterprise value, including debt: $115 billion - Equity value: $102.54 billion - Price per Lumentum share: $1,132, paid in Marvell stock - Premium to the 28th October close: 23.9% - Exchange ratio: 4.5 Marvell shares for each Lumentum share - Lumentum shareholders' stake in the combined company: about 33% - Total addressable market Marvell claims for the combined company: $550 billion The purchase is Marvell's largest since it paid $10 billion for Inphi in 2021. ## What Lumentum Makes for AI Data Centres Lumentum makes lasers, transceiver modules and optical subsystems. Its products move data at high speed through AI and cloud data centres, link data centres to one another and run through telecom networks, and its lasers are also used in 3D sensing and manufacturing. AI data centres now connect thousands of chips at once, and the growing use of chatbots and AI agents has raised demand for faster optical links between them. Marvell designs custom AI processors and networking chips, and it has helped Amazon develop its own AI chips. With Lumentum, Marvell can sell the chips and the optical parts that connect them from one company. Marvell has been building up its photonics business all year. It closed its $3.5 billion purchase of Celestial AI in February. ## Marvell's Race With Broadcom for Custom AI Chips Broadcom has long been Google's main partner for custom chips and sells a wider range of AI data centre hardware than Marvell does. Reuters reported that Lumentum could give Marvell more muscle in that race. Marvell won one of its largest contracts in August, when it agreed to supply chips that sit alongside Google's AI processors. That agreement is worth up to $120 billion in sales through fiscal 2033 and gives Google the right to buy a $12.2 billion stake in Marvell. Three years ago few investors outside the chip industry paid much attention to Marvell. Its annual revenue has grown from $3 billion in fiscal 2021 to $8.2 billion in fiscal 2026, and its market value is now above $170 billion. Its shares hit a record in June after Nvidia chief executive Jensen Huang called it the next 'trillion-dollar company'. Nvidia invested $2 billion in Marvell and another $2 billion in Lumentum earlier this year. ## Why Marvell and Lumentum Shares Fell Lumentum's shares had fallen about 8% and Marvell's about 22% between the first reports of the talks and Monday's announcement, as a broad sell-off in chip stocks gathered pace after Intel's weak forecast, which we [covered on 2nd November](https://www.sovereignmagazine.com/article/is-the-ai-bubble-bursting-october-2026). Both stocks fell again after the deal was announced. Lumentum also reported results for its fiscal first quarter on Monday, with revenue of $1.26 billion, and forecast revenue of $1.575 billion to $1.625 billion for its fiscal second quarter. Analysts had expected $1.48 billion on average, according to Reuters. ## Lumentum's Rivals and the Proposed US Ban on Chinese Transceivers Lumentum competes with Coherent, which is listed in the US, and with Zhongji Innolight of China. A proposed US ban on new Chinese optical transceivers could move orders from Chinese makers towards American suppliers, and Lumentum is one of the companies that stands to gain if the ban goes ahead. ## FAQ **Q: Why is Marvell buying Lumentum?** Marvell designs custom AI chips and networking chips, and Lumentum makes the lasers and optical components that move data between chips in AI data centres. Owning Lumentum lets Marvell sell both, which puts it in a stronger position against Broadcom, a larger rival that already offers a wider range of AI data centre hardware. Marvell says the combined company will have a total addressable market of $550 billion. **Q: What products does Lumentum make?** Lumentum makes optical and photonic products, including lasers, transceiver modules and optical subsystems. They are used in AI and cloud data centres, in the links between data centres, in telecom networks, in 3D sensing and in advanced manufacturing. **Q: Who is Lumentum's biggest competitor?** Lumentum's main competitors in optical components include Coherent, a US-listed maker of lasers and optical parts, and Zhongji Innolight, a Chinese maker of optical transceivers.