Marvell to buy Celestial for $3.25bn to get into photonics

Marvell is to buy photonics startup Celestial for $3.25bn – $1bn in cash and the rest in 27 million Marvell shares – to get it into the photonics business.

“We’re going to have a silicon photonics powerhouse at Marvell when this is all done,” said Marvell CEO Matt Murphy.

Datacentre architectures are changing. Systems are no longer confined to a single rack – they are evolving into multi-rack configurations connecting hundreds of XPUs with an integrated high-bandwidth, ultra-low latency, any-to-any scale-up fabric.

This architecture allows each XPU to access the memory of every other XPU directly. These advanced fabrics demand purpose-built switches and protocols such as UALink, engineered to deliver the performance and efficiency required at scale.

Given the power, bandwidth, latency, and reach requirements of multi-rack scale-up fabrics, interconnects will increasingly transition to all-optical connections.

This acquisition positions Marvell to capture a brand-new semiconductor TAM for optical interconnects.

“The acquisition of Celestial AI is a transformative step in Marvell’s evolution and expands our leadership in AI connectivity, as scale-up becomes the next frontier in AI infrastructure,” adds Murphy. “This builds on our technology leadership, broadens our addressable market in scale-up connectivity, and accelerates our roadmap to deliver the industry’s most complete connectivity platform for AI and cloud customers.”

Marvell is expecting $10bn in total revenue for the next fiscal year, a 25% jump in datacentre revenue and a 20% increase in its custom IC business.

It is expected that photonics technology will start being used in datacentres in 2027/8.