[News] M&A in Optical Communications Field: Credo to Acquire DustPhotonics
On April 13, high-speed connectivity solution provider Credo Technology Group announced it has entered into a definitive agreement to acquire Israel-based DustPhotonics, a leading developer of Silicon Photonics Photonic Integrated Circuit (SiPho PIC) technology for optical transceivers.
Under the terms of the agreement, Credo will acquire 100% of DustPhotonics’ equity for a total consideration of USD 750 million, comprising cash and around 920,000 shares of common stock as upfront payment. In addition, contingent consideration of up to approx. 3.21 million shares may be issued upon the achievement of certain financial milestones. The transaction is expected to close in the second quarter of 2026.
Founded in 2008 and headquartered in California, Credo focuses on delivering high-speed connectivity solutions for next-generation AI-driven applications, cloud computing, and hyperscale networks. Its core portfolio includes active electrical cables (AEC), optical digital signal processors (DSP), retimer ICs, and SerDes IP licensing.
Credo’s proprietary ZeroFlap AEC solution integrates SerDes and DSP chips at both ends of the cable, enabling signal equalization and retiming to extend transmission distance and reduce bit error rates. The technology has secured a leading position in short-reach interconnects for AI data centers. Currently, Credo holds an estimated 73% share of the AEC market, with key customers including Amazon, Microsoft, and xAI.
Financially, Credo has recorded rapid growth in recent years. The company reported revenue of USD 437 million for fiscal year 2025, representing a 126% year-on-year increase, and projects revenue to exceed USD 1.3 billion in fiscal year 2026, up approximately 85% YoY.
Founded in 2017, DustPhotonics is a fabless semiconductor company specializing in silicon photonics integrated circuit technologies for high-speed optical transceivers. Its core innovation lies in integrating lasers, modulators, and photodetectors onto a single chip, forming highly integrated silicon photonics PIC solutions.
The company’s product portfolio spans 400G, 800G, and 1.6T data rates, with a roadmap extending to 3.2T. Its technologies also support advanced architectures such as near-packaged optics (NPO) and co-packaged optics (CPO). DustPhotonics has established design partnerships with leading global hyperscale cloud providers, with its silicon photonics chips already deployed in optical transceivers used in top-tier AI clusters.
Strategically, the acquisition marks a significant step for Credo. By integrating DustPhotonics’ advanced silicon photonics PIC capabilities, Credo aims to build a fully vertically integrated connectivity platform spanning SerDes, DSP, silicon photonics, and system-level integration. This will enable comprehensive coverage from copper to optical interconnects, and from chip-level to cluster-level networking, addressing both scale-out and scale-up requirements in AI infrastructure.
Upon completion of the transaction, Credo expects its combined portfolio—including ZeroFlap optical transceivers, optical DSPs, and silicon photonics products—to generate over USD 500 million in optical revenue by fiscal year 2027.
(Photo credit: FREEPIK)
