Credo Technology Group has announced its acquisition of silicon photonics chipmaker DustPhotonics in a deal aimed at expanding its capabilities in high-speed data center connectivity. The move underscores the growing importance of optical technologies in supporting artificial intelligence infrastructure, as companies race to handle increasing data demands.
Under the terms of the agreement, Credo will acquire DustPhotonics for $750 million in cash along with approximately 0.92 million shares of its common stock. The deal also includes a potential additional payout of up to 3.21 million shares, contingent on the achievement of specific financial milestones. This brings the total potential deal value significantly higher, reflecting confidence in the strategic importance of the acquisition.
DustPhotonics specializes in silicon photonics photonic integrated circuit (SiPho PIC) technology, which uses light instead of electricity to transfer data between servers. This technology enables faster data transmission, improved bandwidth, and lower power consumption, making it a critical component for next-generation AI data centers and high-performance computing systems.
By bringing DustPhotonics’ technology in-house, Credo aims to create a vertically integrated connectivity stack that combines its existing strengths in serializer-deserializer (SerDes) and digital signal processing (DSP) with advanced optical solutions. This integration is expected to reduce supply chain dependencies, improve cost efficiency, and accelerate product development cycles across its AI-focused portfolio.
The acquisition is also expected to significantly expand Credo’s market opportunities in the optical connectivity segment. The company projects that its combined portfolio of optical products, including silicon photonics and optical transceivers, will generate more than $500 million in revenue by fiscal 2027, driven by growing adoption in hyperscale AI deployments.
The deal highlights a broader industry shift toward optical interconnect solutions as AI workloads continue to scale. With the transaction expected to close in the second quarter of calendar 2026, Credo is positioning itself as a comprehensive provider of both electrical and optical connectivity solutions, strengthening its role in the evolving AI infrastructure ecosystem.
