Compiled by | ZeR0 Edited by | Mo Ying
Chip Insider reported on April 15 that , Credo, a U.S. giant in data center connectivity solutions, announced it has reached a definitive agreement to acquire DustPhotonics, an Israeli silicon photonics chip company, for up to $1.3 billion (approximately RMB 8.8 billion) in cash and stock. Under the agreement, Credo will pay $750 million in cash and $123 million in stock upon the closing of the transaction. The deal also includes potential upside of up to 3.21 million shares of Credo stock, valued at approximately $430 million based on the current share price.
The transaction is expected to close in the second quarter of this year. The acquisition of DustPhotonics will accelerate Credo's expansion in the optical communications sector. As of the U.S. stock market close on Tuesday, Credo's share price had risen by approximately 19%, bringing its latest market capitalization to about $29.4 billion (approximately RMB 200.4 billion).
Founded in 2017 by a group of experts in optical communications and chip design, DustPhotonics has raised approximately $150 million (approximately RMB 1 billion) since its inception, with investors including Intel Capital. Its Chairman, Avigdor Willenz, is a serial entrepreneur with a strong track record of selling chip startups to large corporations. Previously, he sold Galileo to Marvell, Habana Labs to Intel, and Annapurna Labs to AWS.
DustPhotonics is dedicated to developing Silicon Photonics Photonic Integrated Circuits (SiPho PICs) for high-speed optical transceivers. With a team of approximately 70 members, the company has developed a differentiated portfolio of PIC products covering 400G, 800G, and 1.6T, and plans to expand its product line to 3.2T, while offering both integrated and external laser configurations. SiPho PIC technology is a foundational component of Credo's ZeroFlat (ZF) optical transceiver platform.Bringing this technology in-house will allow Credo’s R&D team to reduce reliance on external suppliers , accelerate product development cycles, and deliver significant cost structure optimizations for high-volume manufacturing.
Credo's product portfolio includes zero-perturbation Active Electrical Cables (AECs), ZF optical transceivers, OmniConnect storage solutions, and a range of retimers and DSPs for fiber and copper Ethernet and PCIe, all based on the PILOT diagnostics and analytics software platform.
This acquisition will directly accelerate Credo's optical interconnect roadmap, enabling the company to acquire industry-leading Photonic Integrated Circuit (PIC) technology, expand its target market, and deepen its portfolio of 800G, 1.6T, and 3.2TNPO (Near-Package Optical) and CPO (Co-Packaged Optical) optical interconnect products. This will build a vertically integrated connectivity technology stack covering SerDes, DSP, silicon photonics and system integration capabilities, which can be used for scale-out and scale-up networks to meet the electrical and optical interconnect requirements across AI infrastructure buildouts. Credo executives view this deal as a turning point for the company's optical communications business, projecting that its ZeroFlat optical transceivers, optical DSPs, and silicon photonics portfolio will generate over $500 million (approximately RMB 3.4 billion) in optical revenue in fiscal year 2027.