UK — The Register

Marvell wants to be a copper topper, bets $115B on photonics leader to push optical networking

ChipsNovember 3, 20262 min read

Marvell Technology plans to buy photonics company Lumentum in an all-stock deal valued at $115 billion. The goal is to lead in optical networking, which uses light instead of copper wire to move data in AI data centers.

What happened

Marvell, a chip company, wants to buy Lumentum, a maker of photonics parts. Photonics means using light to move data. The deal is all stock, which means Marvell pays with its own shares instead of cash. The deal is expected to close in the first half of 2028. If it goes through, Marvell gets stronger tools for lasers, optical transceivers (parts that turn electric signals into light and back), optical circuit switches, and special chip-making work with indium phosphide.

Key numbers

Deal value: $115 billion, paid in Marvell stock.
Copper limit: a 400 Gbps signal over copper wire goes only about 1.25 meters.
Reach rule: each time the speed per lane doubles, copper's reach is cut in half.
Marvell's market value: about $180 billion right now.
Nvidia's investment in Lumentum: $2 billion, made eight months ago.

Why copper is hitting a wall

AI computers link many chips together with wires and cables called interconnects. Faster speeds make copper wire fail over short distances. Light-based optics can carry signals over kilometers and use less power and cooling. In 2024, Nvidia skipped optics in its first Blackwell rack systems because they would have added about 20 kW to a system that already used 120 kW.

Why it matters

AI companies want very large systems with thousands of GPUs (AI chips) working as one unit. Those systems need fast, long-distance links. By buying Lumentum, Marvell hopes to become a one-stop shop for the photonics parts that AI data centers need. The deal also shows how much money is flowing into optics.

What to watch

Whether regulators and shareholders approve the deal before the first half of 2028.
How Marvell combines Lumentum with its Celestial AI technology.
Whether Nvidia, AMD and other AI builders adopt more optical links in large racks.
Whether Marvell's market value moves closer to the $1 trillion that Jensen Huang predicted.

Glossary

Marvell Technology: A chip company that makes parts for data centers and AI networks.
Lumentum: A company that makes photonics parts, such as lasers and optical transceivers.
Photonics: The use of light, instead of electricity, to send and process data.

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