Updated version 4 - Sources say Marvell Technology is in advanced talks to acquire optical manufacturer Lumentum.

The full source information has been modified and details have been supplemented.

Milana Vinn

Reuters, October 29 - A source told Reuters on Wednesday that Marvell Technology (MRVL.O) is in advanced negotiations to acquire data center optical component manufacturer Lumentum Holdings (LITE.O), and the deal could be announced as soon as next week.

Marvell and Lumentum have not yet responded immediately to Reuters' request for comment.

Lumentum produces optical components used in communications networks and data centers, and these sectors are drawing increasing investor attention as AI workloads drive demand for faster data transmission.

Marvell has become one of the biggest beneficiaries of the artificial intelligence spending boom, with its stock price nearly tripling this year due to surging demand for its custom AI chips and networking products.

This potential acquisition would further propel Marvell’s entry into optical communication technologies used in AI infrastructure. Bernstein analysts said the company’s announcement late last year to acquire photonics company Celestial AI for $3.25 billion (link) reinforced this strategy.

Earlier this month, Marvell raised its fiscal year 2028 revenue forecast (link) from $15 billion to $20 billion, citing strong demand for custom AI chips and networking products for data centers.

Although Marvell held approximately $3.92 billion in cash and cash equivalents as of the latest quarter, Bernstein analysts said a deal of this scale would likely require additional financing and could pose integration challenges.

According to a report first by Bloomberg, Lumentum—whose market capitalization is about $8.3 billion—saw its stock rise about 9% in after-hours trading, while Marvell’s stock dropped over 8%.

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