Credo Technology Group Holding Ltd (Credo), an established innovator in high-speed, secure connectivity solutions for AI, Cloud and Hyperscale deployments, made a definitive announcement about its agreement to buy DustPhotonics. The acquisition of SiPho PIC company by Credo will enable the company to integrate industry-proven optical solutions into its portfolio and thereby form its own vertically integrated stack with SerDes, DSP and system integration technologies.
With the help of DustPhotonics SiPho PIC solutions, Credo will be able to cover all aspects of AI infrastructure and offer its products for both electrical and optical interconnects. In doing so, Credo’s product range will be expanded and the company will find itself much closer to the global optical market, as its roadmap includes 800G, 1.6T, and 3.2T NPO/CPO solutions.
Strategic Integration and Market Expansion
DustPhotonics has pioneered a differentiated portfolio of SiPho PICs that simplify component complexity and enhance manufacturing yields. As port speeds exceed 800G, these efficiencies become vital for data center operators seeking lower costs and higher reliability within AI clusters.
The integration of SiPho PIC technology is a cornerstone of Credo’s ZeroFlap (ZF) Optical Transceiver platform. In-sourcing this capability reduces reliance on third-party suppliers and accelerates product development. Analysts at LightCounting and Credo project the SiPho PIC market will reach $6 billion by 2030, highlighting the significant growth opportunity this acquisition presents.
Credo anticipates that its expanded optical portfolio including ZF Optical Transceivers and Optical DSPs will generate more than $500 million in optical revenue by fiscal year 2027.
“Combining forces with DustPhotonics marks a defining step in Credo’s strategy to lead across the full spectrum of AI connectivity. 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.
This combination positions us at an inflection point in optical. As adoption accelerates across hyperscale AI infrastructure, we expect our optical business to scale into a meaningful and rapidly growing contributor by fiscal 2027.
More importantly, 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,” said William Brennan, Chairman, President and Chief Executive Officer of Credo Technology.
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“Joining Credo is the natural next step for DustPhotonics. We built this company with a clear conviction that Silicon Photonics would become the structural foundation of high-speed optical connectivity as AI infrastructure scales. Credo shares that conviction and brings the SerDes IP, the hyperscaler relationships, and the operational scale to turn that vision into reality far faster than we could independently. This is an exceptional outcome for our team, our customers, and the broader industry,” said Ronnen Lovinger, Chief Executive Officer of DustPhotonics.
“We believe DustPhotonics’ Silicon Photonic ICs and engines are a natural extension to Credo’s existing capabilities in optical connectivity, building on strong momentum across Credo’s DSP, ZF Optical Transceiver platform, and future Active LED Cable (ALC) product lines. As a key element in any silicon photonic optical link, DustPhotonics’ products and technologies enable high-speed optical connectivity at lower power and cost compared to traditional pluggable transceivers. In combination, the companies further strengthen Credo’s current foundation for more scalable, reliable, and energy-efficient scale-out and scale-up AI connectivity,” said Gavin Baker, DustPhotonics Investor; Managing Partner and Chief Investment Officer of Atreides Management, LP.
“Silicon photonics is becoming a critical building block for AI infrastructure, and DustPhotonics has built a truly differentiated technology platform in this space. We have been disciplined in focusing on the right architecture and execution, and the results are evident in both the product and customer traction. Combining with Credo creates a powerful platform with the scale, integration, and customer access required to fully capture the opportunity ahead,” said Avigdor Willenz, Chairman of DustPhotonics.
Transaction Details
In accordance with the terms of the agreement, Credo will purchase DustPhotonics for a one-time consideration of $750 million in cash and around 0.92 million shares of common stock of Credo. Furthermore, there could be additional contingent consideration payable upon achieving certain financial targets, up to 3.21 million shares. The acquisition is anticipated to be completed in Q2 2026. Credo anticipates that the merger will be accretive to EPS on a non-GAAP basis in fiscal 2027.
