Marvell Technology is buying optical-components maker Lumentum in a deal valued at $115 billion, as the custom chipmaker steps up its challenge to larger rival Broadcom amid an AI spending boom.
The deal, announced on Monday, is one of the biggest in 2026 and among the boldest corporate bets yet on an AI boom that chip executives expect to underpin industry demand for years.
Tune in at 9:15 a.m. ET as Marvell CEO Matt Murphy and Lumentum CEO Michael Hurlston join CNBC TV to discuss the deal. Watch in real time on CNBC+ or the CNBC Pro stream.
By buying Lumentum – a company roughly half its size – Marvell is betting that Big Tech’s AI spending boom is here to stay and would keep demand for optical components used to move data at high speeds outstripping supply.
AI chip giant Nvidia invested $2 billion each in Marvell and Lumentum earlier this year.
Just three years ago, Marvell was a relatively little-known chipmaker. But its market value has since surged to more than $170 billion, thanks to its role in helping tech giants such as Amazon develop custom AI chips and networking technology for data centers.
Monday’s deal could also add more muscle to Marvell in its race with rival Broadcom, which has long been Alphabet-owned Google’s main custom-chip partner and offers customers a broader menu of AI data center hardware under one roof.
Marvell notched one of its biggest wins in August, signing a deal to supply chips that sit alongside Google’s AI processors worth up to $120 billion in sales through fiscal 2033, giving the search giant the right to buy a $12.2 billion stake.
Lumentum could benefit from proposed Chinese ban
Since the Marvell-Lumentum talks were first reported late last month, Lumentum’s shares have fallen about 8% and Marvell about 22%, as a broad-based chip selloff accelerated following Intel’s weak forecast.
Lumentum, which competes with US-listed Coherent and China’s Zhongji Innolight, stands to benefit from a proposed US ban on new Chinese optical transceivers that could shift demand toward domestic suppliers.
Marvell has already been beefing up its photonics business this year. It closed a $3.5 billion purchase of Celestial AI in February as rising use of AI agents and chatbots drives demand for faster optical links connecting thousands of chips in AI data centers.
Shares of Marvell hit a record high in June after Nvidia CEO Jensen Huang called the custom chipmaker the next “trillion-dollar company.” Its annual revenue has more than doubling from $3 billion in fiscal 2021 to $8.2 billion in fiscal 2026.
Marvell’s acquisition of Lumentum is its largest purchase since its $10 billion buyout of Inphi in 2021.