This week's news of the $115 billion Marvell-Lumentum deal signals that silicon photonics has turned the corner from being discussed as a potential solution to the power wall caused by interconnect inefficiency to becoming a hotbed of activity, with an ecosystem ripe for exits that can help the technology scale and beat the limitations of copper in the evolving AI story.
Just two years ago, on the sidelines of the OFC conference in San Diego, I chaired a workshop panel discussing whether AI would be the killer application for silicon photonics. At that time, it was clear from the presentations that we are at a potential turning point for silicon photonics, but there were still challenges in terms of scaling, energy efficiency, packaging, ecosystem, and tools like EDA and third-party IP, as well as materials.
What we are seeing in the market today suggests that we've moved well beyond that point. It's not just the large Marvell-Lumentum deal, but also the emergence of startups such as Salience Labs, which just raised $125 million in Series B funding to accelerate the deployment of its optical circuit switching (OCS) technology. Its backers include Applied Ventures, AMD Ventures, and Intel Capital.
In this interview, we asked CEO and co-founder Vaysh Kewada why she believes this is the right moment for optical switching and for Salience Labs, and how the company plans to achieve volume manufacturing and commercial adoption.
She said that, by deliberately building its architecture on foundry processes capable of supporting volume production and aligning with co-packaged optics (CPO) manufacturing strategies early on, the company can mitigate standard supply chain friction. She added that 2027 will be a critical inflection year for volume production and deployment of its OCS technology.
Kewada told EE Times, "We've taken the approach of developing out an optical circuit switch that's optical end-to-end so we're never transforming the payload or the data into the electrical domain. The second differentiating standpoint is that we've chosen to take a fully integrated on-chip approach. And we've overcome the loss aspect of integrating optics onto the chip through the development of our own amplifiers that are also integrated on chip."
In the same week that Salience Labs announced its funding round, another startup competing in the OCS space, Voyant Photonics, announced that it is developing a chip-scale OCS engine for AI data center networks. The company said it plans to deliver it to customers as a compact optical switching building block that can be integrated into next-generation data center switching platforms.
Voyant is not starting from scratch. It has already developed a high-density silicon photonics switch matrix to route light for its FMCW LiDAR systems. The architecture uses discrete, solid-state optical paths rather than moving mirrors or continuous analog beam steering. The company said this technology is now being adapted, since in a data center OCS implementation, it's the same fundamental architecture that can be configured to route optical signals among communication ports.
Voyant plans to provide its OCS technology as an engine that optical networking companies can incorporate into their own platforms.
In a report published last month, titled "The Interconnect Imperative-Why AI Is Forcing the Semiconductor Industry to Go Global", Woodside Capital Partners wrote that in the space of fifteen months, Marvell paid $3.54 billion for Celestial AI; Nvidia put $2 billion each into Coherent and Lumentum and then $3.2 billion more into Corning; Ayar Labs closed a $650 million Series E at a $5.0 billion valuation; and Credo, Molex, GlobalFoundries, Ciena, AMD and FormFactor each bought their way into a different layer of the stack.
The authors added that this is a land grab for control points-lasers, optical engines, chiplets, packaging, test and foundry capacity-and that it will not run forever. Each deal removes a control point from the board and raises the scarcity premium on what remains; but as the gaps fill, urgency will decline. For founders, the window for premium strategic exits is open now. For acquirers, the cost of waiting is compounding.
This context helps explain Marvell's interest in bringing Momentum into its already strong connectivity portfolio. The photonics market map shows acquirer demand from systems, silicon and hyperscaler companies sitting above a six-category supply stack of core interconnect and enabling technologies, with adjacent applications drawing on the same technology base.
If you look at the silicon photonics landscape, the ecosystem offers plenty of opportunities for partnerships, mergers and acquisitions as companies race to beat that power wall.
As I stated in the Woodside Capital report, the surge in investment activity in silicon photonics, whether through high-ticket funding rounds or outright acquisitions, highlights a shift in which foundry economics are favorable to high-volume manufacturability and scaling. Over the past year, the industry has moved very quickly from viewing integrated silicon photonics as an emerging alternative to copper to recognizing optical interconnects as a viable physical backbone for scaling next-generation AI infrastructure.