Credo acquires DustPhotonics for US$750 million to increase silicon photonics optical communications

On April 13, high-speed connection solution provider Credo announced that it had reached a final acquisition agreement with DustPhotonics, an Israeli silicon photonics technology company.

Credo will acquire the entire equity of DustPhotonics for an upfront consideration of US$750 million (approximately RMB 5.4 billion) in cash and approximately 920,000 ordinary shares. In addition, depending on the achievement of certain financial milestones, an additional contingent consideration of up to approximately 3.21 million shares may be paid. The transaction is expected to close in the second quarter of 2026.

Credo was founded in 2008 and is headquartered in California, USA. It is a semiconductor company focused on providing high-speed connection solutions for next-generation artificial intelligence-driven applications, cloud computing and ultra-large-scale networks. Its core business covers active cables, optical digital signal processors, Retimer chips and SerDes IP licensing.

The company's independently developed ZeroFlap active cable product integrates SerDes and DSP chips at both ends of the cable to achieve signal equalization and retiming, thereby extending the transmission distance of high-speed links and reducing the bit error rate, occupying a leading position in the short-distance interconnection scenario of AI data centers. It is reported that Credo’s current share of the active cable market is as high as 73%, and its main customers include the world’s top ultra-large-scale data center operators such as Amazon, Microsoft, and xAI.

Financial data shows that Credo's performance has shown explosive growth in recent years. The company's annual revenue in fiscal year 2025 will reach US$437 million, a year-on-year increase of 126%. The company expects full-year revenue in fiscal 2026 to exceed US$1.3 billion, a year-on-year increase of approximately 85%.

DustPhotonics, founded in 2017, is a fabless semiconductor company focused on developing high-speed optical transceiver silicon photonic integrated circuit technology. The company's core technology is to integrate key optical functions such as lasers, modulators, and detectors onto a single chip to form a highly integrated silicon photonics PIC solution.

Its product portfolio covers 400G, 800G and 1.6T rates, its technology route has been extended to 3.2T, and supports cutting-edge architectures such as near-package optics and co-package optics. DustPhotonics has established a design partnership with the world's leading hyperscale cloud service provider, and its silicon photonics chips are deployed in the optical transceivers of the head AI cluster.

This acquisition has far-reaching strategic significance for Credo. By integrating DustPhotonics' leading silicon photonics PIC technology, Credo will build a complete vertically integrated connection solution stack covering SerDes, digital signal processing, silicon photonics and system integration, achieving full coverage from copper cables to optical fibers, from chips to clusters, while meeting the electrical and optical interconnection needs of AI infrastructure horizontal expansion and vertical expansion networks.

Upon completion of the transaction, Credo expects its ZeroFlap optical transceiver, optical DSP and silicon photonics product portfolio to generate more than $500 million in optical business revenue in fiscal 2027.