Credo Technology Group, the San Jose-based connectivity chip company listed on Nasdaq, signed a definitive agreement to acquire DustPhotonics, an Israeli fabless semiconductor startup that designs silicon photonics chips for optical transceivers. The deal was announced in mid-April 2026, and Credo held a conference call on it on April 14.
At closing, Credo will pay $750 million in cash and issue about 0.92 million of its shares, which Calcalist valued at about $123 million. DustPhotonics' holders can receive up to about 3.21 million more Credo shares if the business meets financial milestones set out in the agreement. Calcalist valued that earnout at about $430 million at the time, putting the total at up to $1.3 billion.
Credo said it expected the deal to close in the second calendar quarter of 2026, subject to customary conditions and regulatory approvals, and to add to its non-GAAP earnings per share in fiscal 2027. DustPhotonics has about 70 employees, according to Credo, and Calcalist reported that the team is expected to form the basis of a new Credo development centre in Israel.
What DustPhotonics built
DustPhotonics was founded in 2017 and is based in Modi'in, Israel. It develops silicon photonics photonic integrated circuits, chips that handle the optical functions inside the transceivers linking servers and switches in data centres. Its portfolio covers 400G, 800G and 1.6T speeds, with a roadmap to 3.2T, in versions that use either an integrated or an external laser.
The company started out making end-user components such as transceivers and cables. Calcalist reported that in 2021 it shifted to designing chips only, and that Ronnen Lovinger became chief executive at that point. Credo said DustPhotonics has design wins with leading hyperscale cloud customers. SiliconANGLE reported that the company is also working on near-port and co-packaged optics, which move optical engines closer to switch or GPU silicon.
“Joining Credo is the natural next step for DustPhotonics.”
Why Credo is buying
Credo's products include active electrical cables, retimers and digital signal processors for Ethernet and PCIe, and its ZeroFlap optical transceivers. Buying DustPhotonics brings the photonic chip inside those transceivers in-house. Credo said this reduces its dependence on outside suppliers and could lower costs at volume.
Chief executive William Brennan called the deal "a defining step in Credo's strategy" and said the company is building a vertically integrated connectivity platform that spans copper and optical links. Credo said it expects its combined optical portfolio to produce more than $500 million in optical revenue in fiscal 2027, and cited LightCounting and its own estimates that the market for silicon photonics chips will reach $6 billion by 2030.
Lovinger said Credo brings SerDes technology, relationships with hyperscalers and operational scale that DustPhotonics did not have on its own.
The founders and the funding
Calcalist named Ben Rubovitch, Kobi Hasharoni, Amir Geron and Yoel Chetrit as the founders, each holding about 3% of the company. Chairman Avigdor Willenz holds about 6%, Calcalist estimated, worth about $50 million in the deal.
Reports differ on how much DustPhotonics raised. SiliconANGLE put the figure at more than $100 million, while Calcalist reported about $150 million over the company's life. In February 2024 the company raised a $24 million Series B follow-on from investors including Sienna Venture Capital, Greenfield Partners, Atreides Management and Exor Ventures. Calcalist reported a further round in December 2025, led by KEY1 with Atreides, that valued the company at about $500 million.
Greenfield Partners has been the largest shareholder since 2021 and stands to make about ten times its investment, according to Calcalist. Intel Capital, an early backer, holds about 7%. SiliconANGLE also listed WRVI Capital among the investors. Credo's shares rose about 13% after the announcement, SiliconANGLE reported.
The race for optical connectivity
As AI clusters grow, the links between chips, servers and switches are moving to higher speeds, and above 800G integrated photonics becomes more important for cost and manufacturing scale. That has made optical components a focus for chip companies that have so far relied on copper.
Credo listed the risks of the deal in its release, including closing on schedule, integrating DustPhotonics, reaching the earnout milestones and competition in optical interconnects.
