$CRDO’s premarket selloff may partly be driven by $MXL’s comments last night about entering the 1.6T AEC market. Investors may be worried about the impact of new competition.
But here’s what’s interesting: MXL’s own CEO estimated that Credo controls roughly 93–99% of the AEC cable market.
Credo has a mature, proven end-to-end solution, from silicon and cable design to qualification and delivery. MXL, meanwhile, plans to sell chips rather than complete cables.
And competition isn’t new. $MRVL has been developing AEC silicon for some time, yet it hasn’t visibly dented Credo’s market dominance.
Of course, more competitors will eventually enter this market. But I think investors may be overestimating the near-term threat from MXL.
There’s a big difference between developing an AEC chip and taking meaningful share from Credo.