Credo acquires DustPhotonics for up to $1.3B to expand Silicon Photonics and AI connectivity

CRDO Rises on its $750M DustPhotonics Deal for Silicon Photonics

To capitalize on the rapid evolution of AI infrastructure, Credo Technology Group Holding Ltd. CRDO has agreed to acquire DustPhotonics, a leader in Silicon Photonics Photonic Integrated Circuit (SiPho PIC) technology. The deal, valued at $750 million in cash plus stock and performance-based incentives, is likely to transform the broader optical connectivity ecosystem powering next-generation AI workloads. DustPhotonics strengthens CRDO's optical roadmap and expands its market opportunity. DustPhotonics brings advanced SiPho PICs across 400G to 1.6T, with a path to 3.2T, integrating multiple optical functions onto a single chip. This reduces complexity, improves yields and lowers costs as speeds scale beyond 800G. The technology also enhances reliability in AI data centers and is already used in hyperscale deployments, with further applications in NPO and CPO under development. By acquiring DustPhotonics, Credo is making a decisive push to become a vertically integrated connectivity powerhouse, spanning SerDes, DSP, SiPho PICs and system-level integration. This comprehensive stack positions Credo to compete more effectively in both scale-out networks and scale-up architectures. This acquisition goes beyond adding products as it enables deeper integration and control. By bringing silicon photonics in-house, Credo reduces supplier dependence, speeds innovation and lowers costs. Combined with its SerDes and DSP strengths, this allows end-to-end optimization of the signal chain and delivery of more integrated, high-performance solutions. Through this acquisition, Credo expects its combined optical business, spanning transceivers, optical DSPs and silicon photonics, to exceed $500 million in revenue by fiscal 2027. The deal is projected to close by second-quarter fiscal 2026 and be accretive to non-GAAP EPS by fiscal 2027. Credo continues to acquire buys specialized tech companies to improve its products and stay competitive in fast-growing data center markets. In March, it acquired high-speed connectivity IP firm CoMira Solutions. This deal builds on its prior Hyperlume acquisition, announced in October 2025, enhancing next-gen connectivity amid surging AI and hyperscale demand. Marvell Technology MRVL, like CRDO and AVGO, has also been on an acquisition spree. Marvell's Cavium acquisition in 2018 expanded it beyond HDD chips into networking and data centers, helping offset PC-driven demand declines and strengthening its competitive position. In February 2026, it completed the acquisition of XConn Technologies to expand its PCIe and CXL switching portfolio and strengthen AI data center connectivity capabilities. Marvell expects XConn to generate $50 million annualized revenue in the fourth quarter of fiscal 2027 and $100 million in fiscal 2028, while adding roughly $25 million in annual costs, reducing cash by $325 million, lowering interest income and increasing share count. It also completed its buyout of Celestial AI, strengthening its scale-up optical connectivity capabilities for large-scale AI deployments. Image Source: Zacks Investment Research Regarding the forward 12-month Price/Sales ratio, CRDO is trading at 12.46, higher than the Electronic-Semiconductors sector's multiple of 8.36. Image Source: Zacks Investment Research The Zacks Consensus Estimate for CRDO earnings for fiscal 2026 has been revised up over the past 60 days. Image Source: Zacks Investment Research CRDO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Credo to acquire Israeli silicon photonics startup DustPhotonics for up to $1.3 billion - SiliconANGLE

Fabless chip-designing company Credo Technology Group Holding Ltd. has announced that it has entered a definitive agreement to acquire Israeli silicon photonics startup DustPhotonics Ltd. for up to $1.3 billion in cash and stock. Under the terms of the deal, Credo will pay $750 million in cash and issue approximately $123 million in shares at closing. According to Calcalist, Credo may also pay up to approximately 3.21 million additional shares, valued at around $430 million based on current pricing, contingent on DustPhotonics hitting certain financial milestones. Founded in 2017, DustPhotonics offers a portfolio of Silicon Photonics Photonic Integrated Circuit technology for optical transceivers spanning 400G, 800G and 1.6T speeds, with a roadmap extending to 3.2T. The company employs approximately 70 engineers with expertise in photonic integration. DustPhotonics operates as a fabless semiconductor company, designing SiPho PICs that integrate key optical functions onto a single chip rather than assembling them from discrete components. The approach reduces component complexity, improves manufacturing yields and enables lower costs at scale as port speeds advance beyond 800G. Its PIC portfolio supports both integrated and external laser configurations and is already deployed in transceivers at leading hyperscale AI clusters. The company is also developing near-port optics and co-packaged optics applications, which bring the optical engine closer to switch or GPU silicon to reduce power consumption and latency. The acquisition brings DustPhotonics' SiPho PIC technology in-house and expands Credo's connectivity portfolio beyond its existing SerDes and digital signal processing products. The combined stack from the two companies will span SerDes, DSP, Silicon Photonics and system integration, covering both electrical and optical interconnects for AI scale-out and scale-up networks. "Combining forces with DustPhotonics marks a defining step in Credo's strategy to lead across the full spectrum of AI connectivity," said William Brennan, chairman, president and chief executive officer of Credo Technology. "We've built a strong position in high-speed electrical solutions and this move decisively expands that leadership into Silicon Photonics with best-in-class PIC technology that complements our ZeroFlap Optical Transceivers and DSP portfolio." The transaction is expected to close in the second quarter of this year, subject to customary closing conditions and regulatory approvals. Shares in Credo were up around 13% on Tuesday after the announcement. Coming into its acquisition, DustPhotonics had raised approximately over $100 million in venture capital funding, although the figure raised varies depending on the source. Investors in the company included Avigdor Willenz, Intel Capital Corp., WRVI Capital, Greenfield Partners, Sienna Venture Capital, Atreides Management LP and Exor Ventures.