Key Highlights

  • Marvell Technology (Nasdaq: MRVL) expects DCI module Revenue to approach $1 billion annualised run rate during FY28.
  • The scale-across market is expected to accelerate Marvell DCI module revenue growth, with line of sight to annualised $1 billion during FY28.
  • Marvell expects to Supply DCI modules to all five major hyperscalers in FY27, representing universal adoption at the top tier of the market.
  • The industry's first 1.6T ZR/ZR+ DCI pluggable, based on Marvell's 2nm coherent DSP with integrated MACsec security, was announced in March 2026.
  • AEC and retimer aggregate revenue is expected to double in FY27, complementing the DCI module growth trajectory.

 

Analysis

Data centre interconnect modules — DCI modules in industry shorthand — are one of the less glamorous corners of the optical semiconductor market. They sit between data centres, carrying the traffic that enables a hyperscaler to function as a single computing fabric across geographically distributed facilities. The market for these modules was historically served by specialist optical companies. What Marvell Technology (NASDAQ: MRVL) has done over the past several years is position itself as the semiconductor supplier whose technology is inside the most capable of these modules — and is now moving to supply modules directly.

 

The Technology Foundation

The foundation of Marvell's DCI module Business is its coherent digital signal processor portfolio. Coherent DSPs manage the encoding and decoding of signals transmitted over long-haul optical fibre, compensating for the impairments — dispersion, noise, polarisation rotation — that accumulate over distance. The performance of the DSP determines the capacity of the link: how many bits per second can be reliably transmitted per unit of spectrum.

 

In March 2026, Marvell announced the industry's first 1.6T ZR/ZR+ DCI pluggable, based on its new 2nm coherent DSP with integrated MACsec security. ZR and ZR+ are standardised formats for pluggable coherent optics — they can be inserted directly into a network router or switch port without an external transponder chassis, dramatically simplifying data centre interconnect infrastructure. 1.6T represents the current leading edge of capacity for these modules. Being first at 1.6T on 2nm, with the security functionality integrated in silicon rather than added externally, is a genuine product Leadership position.

 

The Commercial Milestone: Five Hyperscalers

The most commercially significant disclosure in Marvell's Q4 FY26 Earnings presentation was the confirmation that the company expects to supply DCI modules to all five major hyperscalers in FY27. The DCI module market at hyperscaler scale is not an open Commodity market. These customers run qualification processes that take 12 to 24 months, involve extensive interoperability testing, and result in multi-year supply commitments. Being qualified with all five simultaneously is exceptional — it suggests that Marvell's technology has cleared the highest bars set by the most demanding buyers of optical equipment in the world.

 

The Revenue Path to $1 Billion

In the Q1 FY27 results, management explicitly introduced the concept of the scale-across market as a DCI module growth driver. Scale-across refers to connections between different sections of the same hyperscaler's data centre campus — shorter distances than traditional inter-city DCI but requiring similar optical technology. This expands the addressable deployment opportunity for Marvell's modules beyond the metro and long-haul applications where coherent optics have traditionally been used.

 

The trajectory from current revenue levels to an annualised $1 billion run rate in FY28 is consistent with the five-hyperscaler supply relationship and the scale-across market expansion. Even at modest deployment rates — a few thousand modules per hyperscaler per quarter — the revenue arithmetic reaches the billion-dollar level quickly at the price points that 1.6T ZR+ modules command.

 

For a long-term investor, the DCI module business exemplifies what makes Marvell's data centre revenue stream so interesting: it is not a single technology bet but a portfolio of interconnect positions across multiple protocols, distances, and customer architectures, each growing simultaneously and each reinforcing the others through the shared DSP and mixed-signal semiconductor platform underneath them.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. All data is sourced from Marvell Technology's official earnings presentations (FY26 Q4 and Q1 FY27). Investors should conduct their own Due Diligence before making Investment decisions.