750 Million Dollar Bet: Silicon Photonics Strategy for AI Data Centers

Credo Technology Group Holding Ltd. (Nasdaq: CRDO) has agreed to acquire DustPhotonics, an Israeli silicon photonics design firm, in a cash-and-stock transaction valued at $750 million. Through this deal, Credo aims to build a vertically integrated optical networking portfolio—spanning optical transceivers, digital signal processors (DSPs) and silicon photonics—and to grow its optical-related revenue to more than $500 million in fiscal 2027. The acquisition is expected to close in the second quarter of 2026 and is projected to be accretive to non-GAAP earnings per share in fiscal 2027.

Prior to the agreement, CTO Qing Chi-Feng disclosed multiple on-market share sales under a family trust in March and April. Despite selling shares worth several billion Korean won, he still retains a significant indirect stake in the company.

Alongside the acquisition announcement, Credo has scheduled a conference call for April 14 (U.S. time). Expectations that the company will strengthen next-generation optical connectivity based on silicon photonics have driven its Nasdaq stock price up by double digits, drawing strong market interest. In March, Credo also announced the acquisition of Comira Solutions to enhance its high-speed signal processing capabilities, accelerating the expansion of its connectivity solutions portfolio for AI data centers.

Credo is a fabless semiconductor company that designs wired and wireless connectivity solutions for high-speed, low-power Ethernet and PCIe. Its product lineup—including active cables, optical transceivers, retimers and DSPs—serves major cloud and hyperscale providers across North America and Asia. Optical interconnect technologies, including silicon photonics, are viewed as critical next-generation infrastructure for handling the surge in intra- and inter-data-center traffic driven by generative AI, and the related market is expected to grow rapidly.