Artificial intelligence chip manufacturer Myriel Technology ( Marvell ) has reached an agreement to acquire data center optical device manufacturer Lumentum in a all-stock transaction worth approximately $80 billion. This deal will merge two of the upstream technology suppliers with the strongest growth momentum in the AI sector.
Mellanox Technologies designs and customizes AI chips, as well as various technologies for interconnecting processors within data centers and for data transfer. The acquisition of Lumentum will expand Mellanox Technologies' product portfolio in optical transmission technology, which relies on optical signals to transfer data between chips and servers.
NVIDIA is the strategic investor in both of these companies.
On Monday, two companies announced the terms of the deal: For each share of Lumentum common stock held by a shareholder of Lumentum, they will receive 4.5 shares of Maiwei Technology common stock. Including the assumed debt, the overall value of this transaction is approximately $115 billion.
Lumentum manufactures lasers, chips, and optical interconnection hardware used in data center servers. In the once relatively niche field of photonics, Lumentum is a core enterprise. The technology developed by such companies enables data transmission speeds between computer chips to far exceed those of traditional copper wire connections.
Lumentum currently has a market value of about $76 billion, while Maiwell Technology has a market value of about $172 billion.
In 2016, data center business accounted for less than 10% of Microwell Technology's total revenue; today, this segment has become the main source of the company's revenue and also a core growth engine. The company's CEO, Matt Murphy, has stated that Microwell Technology has "betted everything" on developing its data center business.
At the beginning of March this year, NVIDIA announced that it had signed a multi-year procurement agreement with Lumentum to purchase their high-end laser components. As part of this collaboration, NVIDIA will invest $2 billion with Lumentum to support research and development as well as the construction of manufacturing capacity in the United States.
Later in the same month, NVIDIA also completed an investment in Maiwell Technology, and the two parties reached a strategic cooperation. The goal is to enable products from various custom AI chip manufacturers to be more easily integrated with NVIDIA systems.
If this acquisition is successfully completed, Myriel Technology's technology can also be utilized to serve the hardware of NVIDIA's competitors. Myriel Technology is best known for developing customized AI chips for Amazon Web Services ( AWS ). In August of this year, Myriel Technology announced an expansion of its business cooperation with Google, whereby Google obtained the relevant rights to purchase Myriel Technology's shares.
Murphy stated, "The AI infrastructure is undergoing a fundamental architectural transformation towards interconnected lighting. This is a major opportunity that only comes once in a generation." He added that this acquisition will help shape the next generation of AI interconnected technology landscape.
