NEW YORK (The Thursday Times) — US chipmaker Marvell Technology said on Monday it would buy optical components maker Lumentum in an all-stock deal worth $115 billion including debt, one of the biggest of 2026 and among the boldest bets yet on the artificial intelligence build-out.
“AI infrastructure is undergoing a fundamental architectural shift toward optical connectivity, creating an opportunity that comes along once in a generation,” Marvell chief executive Matt Murphy said. He will stay on as chairman and chief executive of the combined company.
Lumentum makes lasers and optical components used to move data at high speed in AI, cloud computing and communications networks. Marvell helps tech giants such as Amazon develop custom AI chips, and the deal strengthens its hand against its larger rival Broadcom.
Marvell will pay $1,132 per share in stock, a 23.9 per cent premium to Lumentum’s closing price on October 28, before talks were first reported. Lumentum shareholders will receive 4.5 Marvell shares for each share they own, giving them about 33 per cent of the combined company.
Investors are nervous
Lumentum shares fell 6.5 per cent before the opening bell and Marvell slipped 2.3 per cent. Both have dropped sharply since talks were reported, as doubts grow over whether AI spending can last, a worry that has already hit chip stocks.
“This is an enormous bet, and investors are right to ask whether Marvell is paying too much and taking on too much at once,” said Axel Rudolph, chief technical analyst at IG Group.
Marvell’s market value has surged to more than $170 billion in three years. Nvidia invested $2 billion each in Marvell and Lumentum earlier this year. In August Marvell signed a deal to supply chips that sit alongside Google’s AI processors, worth up to $120 billion in sales through fiscal 2033. The Lumentum deal has been approved by both boards and is expected to close in the first half of 2028.
