02 Nov 2023
To accelerate optical data center speed and scalability; union set to deliver five-fold expansion in cloud business.Lumentum is to acquire Hong Kong-headquarterd Cloud Light, which makes fiber optic equipment and automotive sensors, in a transaction valued at $750 million, subject to approvals.
The acquisition of Cloud Light is expected to accelerate Lumentum’s push into what it describes as “the fastest growing segments of the multibillion-dollar opportunity for optical modules used in cloud computing data center infrastructure”.
Cloud Light has a track record of developing high-speed connectivity solutions. Nearly all of Cloud Light’s more than $200 million revenue in the past 12 months was derived from 400G or higher speed transceiver sales. And in the latest trading quarter, over half of Cloud Light’s optical transceiver revenue was derived from 800G modules.
With the acquisition, Lumentum will be well-positioned to serve the growing needs of cloud and networking customers, particularly those focused on optimizing their data center infrastructure for the demands of AI/ML.
Lumentum says it will be able to deliver immediate customer value with a more comprehensive product and technology portfolio, enabling customers to more effectively manage the escalating compute and interconnect requirements of AI workloads. The combination also brings best-in-class design and assembly, test, and packaging capabilities together with Lumentum’s global customer reach.
“With Cloud Light, we are making a strategic investment to significantly expand our opportunities in the cloud data center and networking infrastructure space,” said Alan Lowe, Lumentum president and CEO. “Cloud Light provides us with the highest speed transceiver solutions at scale and complements our advanced component capabilities. This results in a broad product and technology portfolio that addresses a wide range of cloud operator needs.”
Dr. Dennis Tong, Cloud Light Founder and CEO, said, “This announcement is a pivotal milestone in the history of Cloud Light. We founded the company with a vision that our expertise in high-volume precision manufacturing would result in a superior value proposition for cloud data center customers.
“We believe we can build upon our success to date and further accelerate cloud data center growth by combining Lumentum’s advanced photonic integration and transmission technologies with our highly automated packaging and manufacturing processes.”
Lumentum’s statement concluded that it “intends to finance the transaction through cash from its balance sheet. The transaction is expected to close by the end of calendar 2023, subject to receipt of regulatory approvals and other customary closing conditions.”