After Marvell Buys Lumentum: DSPs and Lasers, Two Bottlenecks Under One Roof — 2026 W45 Industry Review
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On Nov 2, Marvell announced an all-stock acquisition of Lumentum: 4.5 Marvell shares for each Lumentum share, implying about $1,132 per share and an enterprise value of about $115B, with closing expected in 1H 2028. Lumentum fell 18.6% that day. Three days later, the US midterm elections raised concerns over data-center regulation and power, the SOX fell 12.25% in a single day, and Taiwan's electronic components index fell 21.6% for the week.
Yet the same week's earnings calls were about supply.
First, Coherent said its calendar-2027 capacity is essentially booked, and signed a five-year agreement worth about $20B with one AI customer.
Second, AOI said 1.6T is held back by DSP shortages, with supply covering less than 80% of demand, and cut its year-end capacity target from 650K to more than 500K units a month.
Third, Innolight said the 1.6T DSPs it has secured are close to its order needs, and most of its 2027 orders are already covered.
STT's view: 2027 optical module output is limited by two components, DSPs and InP lasers. With Lumentum, Marvell holds both bottlenecks under one roof, and module makers will start looking for second sources.
▲ Revenue growth from this week's earnings vs. stock and index declines over the same period (Image source: Simple Tech Trend original; data from company 8-Ks, Yahoo Finance, TradingKey, Nextapple, 10jqka)
Further reading: Marvell Wants InP Capacity: Q3 Shortages Grow Further Upstream as Module Makers Diverge.
What's in the Premium Section
The familiar script: why the deal, the election and power concerns were priced together
Another reading: which two constraints the five companies' 2027 limits narrow down to
DSP breakdown: AOI's 1.6T backlog as a multiple of Q4 shipments, and how much its capacity target was cut
Laser breakdown: the size of three long-term agreements from Coherent, Lumentum and AOI
Deal breakdown: how the all-stock exchange value moved in four days, and what the spread is pricing in
The map: when each of the five constraints is set to ease
The other side's roadmap: CPO timelines from Arista, Fabrinet and Innolight
Taiwan supply chain, link by link: Airoha, LandMark Optoelectronics, VPEC, WIN Semiconductors, GCS, EZconn and Foxconn, and the two real bottlenecks
7 counterarguments
8 signals to watch: three of them are verifiable calls
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That's the summary of this piece.
STT's full analysis — the DSP and laser bottlenecks, how the value of Marvell's share exchange moved, when the five constraints ease, and the mass-production window for Taiwan's second sources — is in the premium section, with 6 original charts.
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