Credo Acquires DustPhotonics for $750M Cash in AI Optics Deal

DustPhotonics, an Israeli developer of silicon photonics photonic integrated circuits (SiPho PICs), has entered a definitive agreement to be acquired by U.S.-based Credo Technology Group. The transaction includes $750 million in upfront cash and approximately 0.92 million shares of Credo common stock, with potential additional contingent consideration of up to 3.21 million shares tied to financial milestones. DustPhotonics' technology integrates optical functions like lasers and detectors onto silicon chips, enabling high-speed data transmission at 400G, 800G, and 1.6T rates, with a roadmap to 3.2T. These products power optical transceivers in hyperscale AI clusters, near-port optics, and co-packaged optics applications, addressing surging demand for efficient data center interconnects.

The acquisition positions DustPhotonics' innovations within Credo's broader connectivity portfolio, combining SiPho PICs with SerDes, digital signal processors, and system integration for a vertically integrated stack. This move reduces supply chain dependencies, accelerates development, and lowers costs at scale for AI infrastructure. Credo projects the combined optical products, including ZeroFlap transceivers and DSPs, to exceed $500 million in revenue by fiscal 2027, with the deal accretive to non-GAAP EPS that year. The SiPho PIC market is forecasted to reach $6 billion by 2030 amid AI-driven growth. The deal, announced on April 14, 2026, is set to close in Q2 2026 pending regulatory approvals.