capexScore 55/100Research
Marvell interconnect business expected to grow 50%+ YoY in FY2027, outpacing cloud capex growth driven by 1.6T PAM ramp and 3.2T technology development
Matt Murphy· Marvell Technology· AI· 2026-05-22· about Marvell Technology (MRVL)
“we expect our interconnect business to grow more than 50% year-over-year, well above our prior expectation of 30% growth... Notably, we expect our interconnect business to grow more than 50% year-over-year... we are seeing very strong bookings from multiple tier 1 customers for our 1.6T solutions, which entered production in the second half of fiscal 2026. Reflecting this demand and our first to market technology leadership, we expect our 1.6t revenue ramp to ramp very rapidly in fiscal 2027”
Why it matters
Marvell is signaling a major acceleration in PAM (pluggable transceiver) demand beyond normal capex growth, indicating customers are prioritizing optical interconnect investments for AI data center scale-out. This suggests interconnect silicon is becoming a critical bottleneck/priority.
Investment implication
Companies supplying advanced packaging, DSP (digital signal processing) chiplets, coherent optics components, and high-speed substrates to Marvell will see accelerated demand. Marvell's own suppliers (foundries for 2nm DSP work, substrate manufacturers) face capacity pressure.