Credo Technology Group (CRDO) Stifel 2024 Cross Sector Insight Conference summary

Company overview and strategy

• Focuses on high-speed connectivity, primarily in data centers using Ethernet, with products spanning copper and optical connections, active electrical cables, optical DSPs, and SerDes IP.

• Differentiates through application-specific SerDes technology, optimizing for performance, power, and speed.

• Expanding into protocols like PCIe and USB, with early contracts for high-speed USB IP.

• Positions itself as a solutions provider, not just a chip company, offering system-level products and IP licensing.

• Emphasizes innovation and flexibility, aiming to deliver complete solutions and deepen customer relationships.

Market trends and product inflection points

• AI-driven demand for bandwidth and high-speed connectivity is a major growth catalyst.

• Active electrical cables (AECs) adoption is accelerating at higher speeds (50G/100G per lane), with speed and functionality as key inflection points.

• Custom hardware and firmware features for customers drive differentiation and efficiency.

• ACC and LPO (no DSP) solutions are seen as niche, with limited market potential outside specific use cases.

• Customers prefer integrated solutions from a single provider for accountability and streamlined support.

Competitive landscape and innovation

• Welcomes competition as a sign of a growing market and strives to raise the competitive bar through speed, innovation, and flawless delivery.

• In the PAM4 DSP market, power efficiency is now the primary driver, with new designs targeting significant power reductions using advanced process nodes.

• Linear receive optics (LRO) innovation enables lower-power modules, with early customer adoption and positive market response.

• LRO does not shrink the DSP market but offers a lower-power, cost-optimized alternative without reducing unit demand.