Marvell Technology debuts 2nm optical chips as AI networking shifts focus to power efficiency

Marvell Technology pushes 2-nanometer process for optical interconnect efficiency

Marvell Technology presented what it calls the first optical networking chips built on a 2-nanometer process at the European Conference on Optical Communication (ECOC 2026) in Málaga, Spain1

1

. The demonstration included signal processors inside optical transceivers, the modules that convert electrical signals into light and back, alongside a 102.4-terabit co-packaged optics platform1

1

. The announcement comes as AI data centers face mounting pressure to balance speed with power consumption, a challenge that has become central to infrastructure planning.

The showcase featured a single-channel 400G optical PAM4 solution on the 2nm process, 800G ZR/ZR+ pluggable modules, and 1.6T ZR technology, all designed to meet the bandwidth demands of hyperscale AI deployments2

2

. Marvell's strategy involves shrinking its pluggable signal processors to 2nm to reduce power consumption while simultaneously advancing co-packaged optics designs that mount optics directly beside switch chips1

1

. This dual approach positions the company to serve multiple design architectures as the industry debates which topology will dominate.

Broadcom rivalry intensifies over power efficiency claims

Marvell's "industry first" claim centers on reaching 2nm fabrication ahead of competitors, not on achieving specific speed milestones first1

1

. Broadcom had previously marketed its own 3nm signal processor as the industry's first to support 400 gigabits per lane when it launched in March1

1

. The distinction matters because design wins tend to persist once transceiver manufacturers qualify a chip, making early leadership in power efficiency a potential competitive moat1

1

.

Research firm LightCounting projects more than 100 million optical transceivers in the 1.6-terabit and 3.2-terabit classes will ship over five years, with nearly half using 400G optics1

1

. That market represents the battleground where Marvell and Broadcom are competing for share. The timing of Marvell's announcement gains context from last year's ECOC, where Meta research showed co-packaged optics consumed about 65% less power than comparable pluggable modules1

1

. The data underscored how architectural choices directly impact data center power budgets, a constraint that has become binding as facilities hit electrical capacity limits.

GlobalFoundries partnership hedges architectural uncertainty

Four days before the ECOC showcase, on September 17, Marvell and GlobalFoundries expanded a multi-year agreement for silicon germanium capacity at a Burlington, Vermont plant1

1

. GlobalFoundries markets that process for amplifiers and drivers used inside data center optical links, components that function across pluggable, near-packaged, and co-packaged optics designs1

1

. The arrangement ensures Marvell can supply critical components regardless of which optical architecture customers adopt.

Marvell executives stated on the August 27 earnings call that the amplifier and driver business is on pace toward a $1 billion annual run rate1

1

. That revenue stream rarely attracts headlines but may prove more resilient than products tied to specific architectural bets. Data center revenue climbed 46% last quarter, pushing total sales to a record $2.74 billion in the second quarter1

1

. The growth makes Marvell stock a direct proxy for AI infrastructure spending trends.

Market reaction and October 6 investor event in focus

Marvell Technology stock rose 3.1% in pre-market trading following the ECOC announcement, with shares opening at $251.40 on September 21, up from the prior close of $244.251

1

2

2

. Morgan Stanley raised its price target to $268 from $246 while maintaining an Equal Weight rating, citing expectations that Marvell could use its October 6 Investor Day to project fiscal 2030 revenue above $40 billion1

1

. That figure would represent more than triple the roughly $12 billion expected this fiscal year1

1

.

The stock carries a Momentum score near perfect levels and a Growth score of 99.57, reflecting market confidence in the company's trajectory in custom silicon and optical connectivity2

2

. Of 45 analysts tracked, 40 rate Marvell a buy or strong buy with none recommending sell, yielding an average target of $289.04 that implies about 15% upside1

1

. Shares remain roughly 24% below their 52-week high of $329.881

1

.

Power budgets emerge as decisive factor for AI infrastructure

Big Tech capital spending could exceed $1 trillion in 2027 according to Evercore and Bank of America estimates1

1

. Each new facility operates within a fixed power envelope, meaning every watt the network saves becomes available for AI processors. That constraint elevates power efficiency from an engineering preference to a strategic imperative. Marvell's earlier guidance called for approximately $300 million in fiscal 2028 scale-up optics revenue, an opportunity management described in August as now meaningfully larger1

1

. Updated figures at the October 6 event would clarify how much of the company's growth depends on near-packaged and co-packaged optics adoption.

The AI networking story spent two years rewarding companies that delivered the fastest processors. The next phase appears likely to favor those that minimize energy waste in moving data between compute nodes. Marvell's positioning across multiple optical architectures and its 2nm process leadership in signal processors place it to benefit regardless of which design topology prevails, a hedge that may prove valuable as the industry sorts out long-term standards.