Credo Technology Group to Acquire DustPhotonics in Transformative Silicon Photonics Deal

Key Highlights for Investors

• Credo Technology Group (Nasdaq: CRDO) has entered a definitive agreement to acquire DustPhotonics, a leading developer of Silicon Photonics Photonic Integrated Circuit (SiPho PIC) technology.
• Upfront consideration: \$750 million in cash and approximately 0.92 million shares of Credo common stock, with potential for up to 3.21 million additional shares based on financial milestones.
• Deal expected to close in Q2 2026, subject to customary closing conditions and regulatory approvals.
• Transaction is anticipated to be accretive to non-GAAP EPS in fiscal 2027.
• Credo expects combined optical portfolio to generate over \$500 million in revenue in fiscal 2027.
• Positions Credo with end-to-end, vertically integrated connectivity solutions for the AI infrastructure market, spanning SerDes, DSP, Silicon Photonics, and system integration.
• Major expansion into a fast-growing market: The SiPho PIC market is expected to reach \$6 billion by 2030.
• Strong customer traction with leading hyperscale cloud and AI infrastructure operators.
• Conference call scheduled for April 14, 2026, to discuss the acquisition in detail.

Detailed Analysis

Credo Technology Group has announced a definitive agreement to acquire DustPhotonics, in a move that will dramatically expand Credo’s reach and capabilities in the high-speed optical interconnect market, especially as AI and hyperscale data centers continue to drive exponential growth in bandwidth demand.

Strategic Rationale

• The acquisition will bring DustPhotonics’ industry-leading Silicon Photonics PIC technology in-house, positioning Credo with a vertically integrated connectivity stack that spans SerDes, Digital Signal Processing (DSP), Silicon Photonics, and system integration.
• DustPhotonics’ portfolio includes differentiated SiPho PICs across 400G, 800G, and 1.6T, with a roadmap extending to 3.2T. These advanced PICs integrate key optical functions onto a single chip, reducing complexity, increasing manufacturing yields, and lowering costs at scale—factors that are crucial as data rates climb beyond 800G.
• These SiPho PICs are already deployed in leading hyperscale AI clusters and are being designed into next-generation Near Port Optics (NPO) and Co-Packaged Optics (CPO) applications.
• The SiPho PIC market is projected to grow rapidly, with Credo and LightCounting forecasting a \$6 billion market by 2030.
• Critically, DustPhotonics’ technology underpins Credo’s ZeroFlap (ZF) Optical Transceiver platform, further strengthening the company’s ability to deliver reliable, low-power, and cost-effective optical solutions for AI infrastructure.
• By internalizing this technology, Credo will reduce external supply dependencies, accelerate product development, and improve cost structure at scale.

Financial Impact and Revenue Outlook

• The deal is valued at \$750 million in cash, plus 0.92 million Credo shares upfront and potential earn-out of up to 3.21 million additional shares contingent on achieving certain financial milestones. This represents a significant investment and commitment to leadership in photonics.
• Credo expects the transaction to be accretive to non-GAAP earnings per share by fiscal 2027, suggesting meaningful financial upside for shareholders.
• The combined optical product portfolio (ZeroFlap Optical Transceivers, Optical DSPs, and Silicon Photonics products) is projected to generate over \$500 million in optical revenue in fiscal 2027, reflecting strong customer adoption and accelerating deployment across hyperscale AI infrastructure.

Leadership Commentary

William Brennan, Chairman, President, and CEO of Credo:

“Combining forces with DustPhotonics marks a defining step in Credo’s strategy to lead across the full spectrum of AI connectivity. … We are building a vertically integrated connectivity platform that spans from copper to optical and from chip to cluster—allowing us to solve for the two constraints that matter most at scale: reliability and power efficiency, while deepening our role as a strategic partner to our customers.”

Ronnen Lovinger, CEO of DustPhotonics:

“Joining Credo is the natural next step for DustPhotonics. … Credo shares our conviction that silicon photonics is the structural foundation for high-speed optical connectivity as AI infrastructure scales. Together, we can realize this vision faster and at a larger scale than we could independently.”

Gavin Baker, Investor and Managing Partner at Atreides Management:

“DustPhotonics’ Silicon Photonic ICs and engines are a natural extension to Credo’s existing optical connectivity capabilities, enabling high-speed optical connectivity at lower power and cost compared to traditional pluggable transceivers.”

Avigdor Willenz, Chairman of DustPhotonics:

“Combining with Credo creates a powerful platform with the scale, integration, and customer access required to fully capture the opportunity ahead.”

Transaction Details

• Acquisition consideration: \$750 million cash + 0.92 million shares (subject to closing adjustments).
• Potential earn-out: Up to 3.21 million additional shares if certain financial milestones are met.
• Expected closing: Q2 2026, subject to regulatory and customary closing conditions.
• EPS impact: Expected to be accretive to non-GAAP EPS in fiscal 2027.
• Conference call: April 14, 2026, at 10:00 a.m. PT for further discussion.

About the Companies

About DustPhotonics

DustPhotonics, founded in 2017 and headquartered in Israel, is a fabless semiconductor company with a team of approximately 70 employees. It develops advanced SiPho PICs for high-speed optical transceivers, with a portfolio spanning 400G, 800G, 1.6T, and a roadmap to 3.2T. The company has achieved significant design wins with leading hyperscale cloud customers.

About Credo

Credo Technology Group provides secure, high-speed connectivity solutions for AI, cloud computing, and hyperscale networks. Its products include ZeroFlap Active Electrical Cables, ZF Optical Transceivers, OmniConnect memory solutions, retimers, and DSPs for optical and copper Ethernet and PCIe, and are powered by the PILOT diagnostic and analytics platform.

Shareholder Impact and Price Sensitivity

This announcement is highly significant and likely to be price sensitive for Credo shareholders. The acquisition of DustPhotonics positions Credo as a vertically integrated leader in both electrical and optical connectivity for AI and hyperscale data centers, opening a multi-billion dollar market opportunity and accelerating the company’s growth trajectory. The expected accretion to non-GAAP EPS in fiscal 2027, the \$500 million+ optical revenue target, and the transformative potential of the combined product portfolio are all factors that could meaningfully affect Credo’s share value.

Investors should monitor the progress of regulatory approvals, integration milestones, and the achievement of financial targets tied to the earn-out shares, as these may further influence Credo’s future financial performance and share price.

Conference Call and Additional Information

Credo will hold a conference call on April 14, 2026, at 10:00 a.m. Pacific Time to discuss the acquisition. Details are available on the Credo Investor Relations website.

Disclaimer

This article contains forward-looking statements based on management’s current expectations and assumptions. Actual results may differ materially due to risks including, but not limited to, the completion and integration of the acquisition, achievement of financial milestones, and market conditions. Investors are encouraged to read Credo’s filings with the SEC for a full discussion of risk factors.

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