If you believe CPO/NPO is the future of data center networking, then this is a smart deal for all concerned. Lumentum CPO/NPO lasers and module expertise will be coupled with a leader in custom ASIC and PHY silicon development.
If you are not convinced that CPO/NPO is the future, then the deal is still a good one for Marvell, which would become a full-spectrum component and module supplier across all leading-edge pluggable modules. The advantages of the deal for Lumentum are not clear outside of DSPs for its CloudLight module business. Lumentum already sells all of the lasers it can build and has businesses like OCS, SiGe, and line systems that aren’t relevant to the vertical integration story.
Nearly two years ago we wrote that CPO was inevitable but not imminent. This spring the market turned as Nvidia pushed this technology to market (see OFC 2026 Show Report). Marvell acquiring Lumentum is an early signal that the optics supply chain recognizes the value chain is compressing and that vertical integration is needed to maximize value and innovation.
Combining these two companies has the potential to create a strong competitive advantage not unlike the one achieved by Broadcom in Ethernet switching over the past 20 years.
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