DustPhotonics is being bought by Credo Technology Group in a deal worth $750 million in cash, along with an extra $123 million in shares.
The deal may also include extra shares of Credo Technology Group in the future.
If certain targets are met, up to 3.2 million more shares could be given, which are currently worth about $430 million.
Credo Technology Group is listed on Nasdaq and has a market value of about $24 billion. The company focuses on making connectivity solutions for data centers.
By acquiring DustPhotonics, Credo aims to grow faster in the optical communications space.
Avigdor Willenz, Chairman of DustPhotonics, has a strong track record. He previously sold Habana Labs to Intel and Annapurna Labs to Amazon Web Services.
Since it was founded, DustPhotonics has raised over $100 million from investors, including Willenz himself and firms like Greenfield Partners, Sienna Venture Capital, Exor Ventures, and Atreides Management.
“Silicon photonics is becoming a critical building block for AI infrastructure, and DustPhotonics has built a truly differentiated technology platform in this space,” said Willenz. “We have been disciplined in focusing on the right architecture and execution, and the results are evident in both the product and customer traction. Combining with Credo creates a powerful platform with the scale, integration, and customer access required to fully capture the opportunity ahead.”
DustPhotonics works in silicon photonics, a technology that puts optical (light-based) functions onto a single chip. This helps data move faster and more efficiently.
Its products are already used in optical transceivers for large AI data centers. These systems support very high speeds, such as 400G, 800G, and 1.6T, and the company plans to develop even faster solutions in the future.
DustPhotonics was founded in 2017 by a team of experts in optical communications and chip design. The founders include Ben Rubovitch, former CEO and ex-Mellanox employee; Kobi Hasharoni and Amir Geron from Compass Networks; and Yoel Chetrit, who previously worked at Intel.
In 2021, the company made a major change in its strategy. It moved away from making hardware products like transceivers and cables, and instead focused on developing chips. During this shift, Ronnen Lovinger was appointed as the new CEO.
The industry where DustPhotonics operates is growing quickly, as photonics technology is becoming very important for data centers.
At Nvidia GTC conference earlier this year, Jensen Huang said that photonics will be a key part of AI infrastructure. In the past, there were doubts about whether it could replace traditional copper connections in data centers. But his comments made it clear that photonics will play an important role in Nvidia’s future plans.
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