Credo Technology Expands AI Connectivity Footprint via DustPhotonics Acquisition

Credo Technology Group (NASDAQ: CRDO) has announced a strategic acquisition of DustPhotonics, a specialist in silicon photonics, to broaden its portfolio of high-performance connectivity solutions for artificial intelligence (AI) data centers. The move marks a decisive shift for the company as it integrates optical components that transmit data via light rather than electricity. DustPhotonics' technology integrates multiple optical functions onto a single chip, a process designed to improve manufacturing yields, increase overall reliability, and reduce operational costs. According to CEO William Brennan, the acquisition is a defining step in Credo's strategy to lead across the full spectrum of AI connectivity, building upon its existing strength in high-speed electrical solutions. Under the terms of the agreement, Credo will pay $750 million in cash and 0.92 million shares of its stock. An additional 3.21 million shares may be issued if specific financial milestones are achieved. The transaction is expected to close in the second quarter, pending regulatory approvals. From a financial perspective, Credo expects the acquisition to be accretive to its adjusted earnings per share starting in fiscal 2027. The company has set an ambitious target for its optical revenue to exceed $500 million in that same fiscal year. This expansion positions Credo within a specialized optical market segment that research firm LightCounting projects will reach $6 billion by 2030.