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Summary of article:
Before Marvel announced the acquisition of Lumentum, it had the backing of Jen-Hsun Huang. Both parties are expected to strengthen their high-speed optical communications supply capabilities through the merger to cope with the rapid expansion of AI data centers.
Marvell, a major American IC design company, announced on the 2nd that it will acquire Lumentum, a major optical communications company, in an all-stock manner. According to a new report by Bloomberg News, the CEOs of both the companies had metHuida (NVIDIA CEOJen-Hsun Huang Help.
Marvell Chief Executive Matthew Murphy and Lumentum Chief Executive Michael Hurlston consulted with Huang’s views over the phone before the deal was announced, according to people familiar with the matter cited by Bloomberg. The people familiar with the matter requested to remain anonymous because the details have not been made public.
Huang’s support highlights that as the market demand for high-speed optical communications increases, this field has gradually become a bottleneck in the construction of larger and larger data centers, and AI leader Huida is actively promoting the integration of major suppliers. Huida is a leading supplier of chips for training and running large-scale language models. Earlier this year, it invested US$2 billion in Marvell and Lumentum.
“I think the response to HUIDA has been very positive,” Halston told Fox Business Network earlier Monday. “We believe that through this merger, we will be able to provide HUDA with more products, faster.”
Representatives for Huida, Marvell and Lumentum did not immediately respond to requests for comment.
Marvell agreed to acquire Lumentum in an all-stock deal, bringing the value of the deal to $115 billion if debt is included, making it the second-largest technology M&A in history and highlighting how AI is driving corporate M&A activity. The acquisition will combine Marvell’s custom chips with Lumentum’s optical components. The latter uses light to transmit large amounts of data between chips and servers.
Through this transaction, Marvell will become a more vertically integrated supplier of high-speed connectivity devices. As technology companies race to build larger and more technologically advanced AI computing clusters, the importance of high-speed connected devices is increasing.
People familiar with the matter said the two companies began discussing a potential merger this summer, and the negotiation process involved only the two parties and did not include other participants. The two companies originally planned to announce the transaction coinciding with Lumentum’s scheduled earnings release on Thursday, but decided to announce it earlier after news of the transaction plan leaked.
Murphy said at an investor meeting to discuss the deal: “Mike (Halston) and I have a similar vision for the future direction of the world. We have a long-term relationship professionally and personally, and Lumentum has been a valued customer of Marvell. We have a lot of communication with their team, and this transaction just happened.”
Summary FAQ
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Marvell agreed to acquire Lumentum in an all-stock deal worth $115 billion, including debt. The deal will combine Marvell’s custom chips with Lumentum’s optical components.
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Since Huida is an important leader in the AI chip and data center ecosystem, it has the greatest influence on the change in demand for high-speed optical communications. Huang Renxun’s support also means that this merger will help Huida accelerate supplies.
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As large-scale AI computing clusters continue to expand, high-speed connections and optical communications have become bottlenecks, prompting suppliers to accelerate consolidation. The combination of Marvell and Lumentum will be more conducive to vertical integration and expansion of production capacity.
