Credo unveils low-power DSP for 1.6Tbps optical transceivers

SHENZHEN, China - Credo Technology Group Holding Ltd (NASDAQ:CRDO), a high-performance semiconductor company that has delivered impressive 175.81% revenue growth over the last twelve months, announced on Tuesday its new Bluebird Digital Signal Processor (DSP) designed for 1.6Tbps optical transceivers, featuring 224Gbps per lane PAM4 data transmission capabilities. According to InvestingPro data, the company maintains strong gross margins of 65.98%, reflecting its technological leadership in the semiconductor space.

The Bluebird DSP aims to address power consumption challenges in existing 1.6T transceivers by enabling power usage below 20W, according to the company’s press release. This reduced power consumption could potentially remove deployment constraints related to cooling and power delivery. The innovation comes as Credo’s stock has shown remarkable momentum, with InvestingPro reporting a 498.51% return over the past year.

The new processor supports both 800G and 1.6T optical transceivers with four or eight lanes of 224Gbps PAM4 connectivity. It is available in full DSP and Linear Receive Optics variants to accommodate different networking architectures.

Credo designed the Bluebird with sub-40ns latency in each direction to reduce bottlenecks in GPU-to-GPU communications, which is particularly relevant for large language model training and inference workloads.

"The 1.6T Bluebird Optical DSP is engineered to deliver greater flexibility than existing solutions, enabling broader application support," said Chris Collins, VP of Optical Sales and Product Marketing at Credo.

The processor includes telemetry features for link monitoring and diagnostics, along with optional IEEE-compliant forward error correction to support fiber reaches of 500m, 2km and beyond.

The Bluebird DSP is currently available for customers, as stated in the company’s announcement.

In other recent news, Credo Technology Group Holding Ltd reported strong financial results for the start of its fiscal year 2026. The company posted an earnings per share (EPS) of $0.52, surpassing the forecasted $0.35, and achieved a revenue of $223.1 million, which exceeded expectations of $190.63 million. Following these impressive results, several analyst firms have adjusted their price targets and ratings. TD Cowen raised its price target for Credo Technology to $160, citing the company’s robust financial performance and improved growth outlook. Mizuho also increased its price target to $155 after Credo’s better-than-expected quarterly results and guidance. Needham followed suit, raising its target to $150, reflecting the company’s enhanced revenue growth forecast for fiscal year 2026. Additionally, BofA Securities increased its price target to $165, highlighting Credo’s role in AI growth through its active electrical cables. These developments underscore a positive sentiment among analysts regarding Credo’s future performance.

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