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Marvell has entered into a definitive agreement to acquire Lumentum in an all-stock transaction valued at approximately USD 115 billion, representing a 23.9% premium. Post-merger, optical interconnect will be extended to intra-package optical paths.
Yunnan Germanium Industry has signed a five-year supply agreement with AOI to deliver 900,000 pieces of 4-inch InP substrates. The contract value for 2027 stands at USD 194 million, equivalent to 122% of the company’s 2025 revenue.
Shennan Circuits’ FC-BGA substrates are in mass production for layers up to 26 layers, while samples for configurations above 30 layers are under development. Its packaging substrate revenue reached RMB 3.667 billion in the first half, up 110.76% year-on-year.
Goldman Sachs forecasts tight NAND supply will persist through 2027. Average NAND selling prices for Samsung and SK Hynix are expected to rise by 34% and 30% respectively next year.
According to CITIC Construction Investment’s estimates, the shift toward high-voltage direct current (HVDC) in AIDCs (AI data centers) will drive incremental demand for SiC devices on the order of tens of billions by 2030.
In-depth Analysis
Optical Communications & Optical Chips: Marvell and Lumentum entered into a definitive agreement on November 2. The transaction implies an enterprise value of USD 115 billion, equivalent to USD 1,132 per share; Lumentum shareholders will receive 4.5 Marvell shares for each Lumentum share. The combined business will span silicon photonics, compound semiconductors and advanced packaging. Innolux (Zhongji Xuchuang) clarified that no customer order cuts have occurred, its 2027 order book is fully covered for the full year, and it denied the Nomura downgrade report. Accelink Technology refuted market rumours of a production shutdown. Yunnan Germanium Industry secured an annual supply contract with AOI for 180,000 pieces of 4-inch InP substrates, signalling that overseas optical chip players are accelerating the locking-in of domestic upstream capacity.
Advanced Packaging & Testing: Shennan Circuits has advanced its FC-BGA substrate technology: mass production is available for up to 26 layers (up from 22 layers), while designs above 30 layers are in sampling phase, with capacity ramping at its Guangzhou plant. Nevertheless, its stock hit the 10% down limit on November 3, decoupling earnings fundamentals from market sentiment. Advanced Micro-Fabrication Equipment (AMEC) targets capturing over 70% of the advanced packaging equipment market. The impact of TSMC’s 10%–20% CoWoS price hike is still propagating. The Annual Packaging & Testing Conference will be held in Nanjing on November 4–6. Shengyi Technology enjoys a solid order backlog, yet its cumulative three-day price deviation from the benchmark exceeded 20%.
SiC & Power Semiconductors: CITIC Construction Investment notes that SiC is well suited for 800V HVDC in AIDCs, with accelerating penetration in SSTs, HVDC systems and solid-state circuit breakers, creating incremental demand on the scale of tens of billions by 2030. Lion Micro’s power devices and 12-inch heavily doped silicon wafers are running at full capacity amid rising silicon wafer prices; however, SiC pricing has not followed suit, and profit margin improvement lags volume expansion.
Equipment & Materials: Goldman Sachs expects tight NAND supply to extend into 2027. GigaDevice commented that niche DRAM supply is “easing but still constrained”. According to Jwei’s in-depth report, enterprise-grade QLC SSDs now reach 245TB per drive, and nearline hard disk drive capacity is fully booked out through 2028, opening a substitution window. The CXL 4.0 specification has been finalised, yet deployment is constrained by the 2027 host platform roadmap. AMD’s Q4 revenue guidance of USD 17 billion beat consensus. Samsung broke ground this month on its second Texas wafer fab in the US, which will produce base HBM die for AMD and NVIDIA.
Wafer Foundry: GlobalWafers plans a USD 500 million convertible bond issuance, to be subscribed exclusively by Micron alongside a 10-year long-term wafer supply agreement. Leading A-share equipment names have order books stretching into H1 2027. SEMI data shows global semiconductor equipment shipments reached USD 40.53 billion in Q2 (+23% YoY).
Policy & Macro: The Ministry of Commerce released draft measures for the enforcement of export control investigations on dual-use items for public consultation, raising uncertainty around export approvals for items including indium phosphide (InP). The US midterm elections were held on November 3; the PHLX Semiconductor Index closed up 2.64% on the day.
Daily Investment Tips
1. Two countervailing variables are at play in the upstream optical communications sector: long-term supply lock-ins and export licensing. We advise tracking the progress of licence approvals rather than focusing solely on contract values.
2. The carrier substrate and memory price-upcycle chain has entered a phase of earnings delivery and stock divergence. Risks of a price inflection point are building as capacity comes online en masse in 2027–2028. We recommend monitoring sequential gross margin and cash flow quality as core metrics.
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