Marvell Technology Inc. is in advanced talks to acquire Lumentum Holdings Inc., a maker of lasers and optical components used in AI data centers, in what would rank among the largest semiconductor deals of the year.
The discussions became public Wednesday evening through a published report citing people familiar with the matter, who said an agreement could be announced as soon as next week. No purchase price, payment mix or financing plan has been disclosed, and neither company has confirmed the talks. Terms could still change, and the negotiations could collapse.
A roughly $83 billion target
Lumentum carried a stock market value of about $83 billion when the talks surfaced, while Marvell was valued at roughly $221 billion. Any offer would likely include a premium to Lumentum’s market price, which would make the combination one of the biggest chip-sector transactions on record.
Investors split on the news. Lumentum shares jumped more than 9% in after-hours trading Wednesday, while Marvell fell more than 7%, a sign that shareholders were weighing the cost of a deal that could require a large stock issuance, heavy borrowing or both.
Optics as the AI bottleneck
Lumentum’s lasers and high-speed optical parts carry data between servers and racks inside large AI clusters. As those clusters have grown, the links between chips have become a constraint on performance and power use, and optical suppliers have drawn heavy strategic investment, including a $2 billion Nvidia investment in the sector earlier this year.
Marvell sells custom chips and networking silicon to cloud operators and already works with Lumentum. In March the two companies outlined a planned demonstration of an all-optical approach for AI data center networks meant to cut energy use. Buying Lumentum would give Marvell direct control of optical technology it now buys from outside suppliers.
The talks follow Marvell’s purchase of Celestial AI, completed in February, which carried upfront consideration of about $3.25 billion in cash and stock plus potential milestone payments. A deal for Lumentum would be many times that size and would likely draw close antitrust scrutiny in the U.S. and abroad.
