Semtech Corporation’s SMTC is consistently expanding its signal integrity product line on the back of robust product introductions.
This is evident from the fact that SMTC recently announced that it will launch the next-generation Tri-Edge GN2559S receiver during the European Conference on Optical Communication.
The receiver will feature quad PAM4 CDRs and integrated linear transimpedance amplifiers providing low latency receiver performance to cater to the growing requirements of high-performance computing, artificial intelligence and cloud data-center networks.
Moreover, the receiver will enable more power-saving capability for both short-reach and long-reach data-center optical interconnects.
With the launch of Tri-Edge GN2559S receiver, Semtech is likely to capitalize on the prospects in the booming data center market.
Per a Prescient and Strategic Intelligence report, the underlined market is expected to touch $343.6 million in 2030, seeing a CAGR of 5.1% between 2022 and 2030.
Semtech Corporation Price and Consensus
Semtech Corporation price-consensus-chart | Semtech Corporation Quote
Efforts to Increase Signal Integrity Solutions
In addition to the launch of Tri-Edge GN2559S receiver, Semtech announced a number of soon-to-be-released signal integrity solutions at the recent European Conference.
SMTC will launch a FiberEdge linear transimpedance amplifiers integrated circuit named GN1700 for allowing 50Gbps PAM4 5G front-haul and mid-haul deployments.
Semtech will also unveil Tri-Edge GN2256, a bidirectional analog PAM4 CDR with an integrated differential driver, suitable for 5G front-haul deployments.
Additionally, SMTC aims to expand its FiberEdge platform with two new integrated circuit solutions, named GN1300 and GN1400 for use in optical modules, suitable for 5G wireless X-haul applications.
Additionally, Semtech will introduce a 200G per Lane FiberEdge physical medium-dependent chipset and a ClearEdge CDR Transmitter solution named GN2105S.
Further, SMTC made GN1848, a FiberEdge platform of PAM4 chipsets and GN1816, a FiberEdge platform of PAM4 linear transimpedance amplifiers, available for customers.
With the growing signal integrity solutions, Semtech strives to strengthen its signal integrity product line, which became its key component.
The aforesaid product line generated revenues of $87.4 million (accounting for 41.7% of total second-quarter fiscal 2023 revenues), up 19.5% on a year-over-year basis.
Optical Communication and Networking Market Holds Promise
On the back of increasing signal integrity offerings, Semtech is expected to strengthen its position in the optical communication systems and networking market.
The above-mentioned market is witnessing significant growth in recent times owing to the expansion of telecom infrastructure across developed and developing nations.
According to a Future Business Insights report, the global optical communication systems and networking market is likely to hit $32.9 billion by 2029 from $20.4 billion in 2022, witnessing a CAGR of 7.1% during the 2022-2029 forecast period.
Though Semtech’s rising initiatives to expand presence in the aforesaid market remain a positive, its declining revenues from the high-end consumer market due to weak demand from the Asian smartphone customers remains a serious concern.
Shares of SMTC have been down 60.1% in the year-to-date period, lagging the Computer and Technology sector’s decline of 30.1%.
Zacks Rank & Stocks to Consider
Currently, Semtech has a Zacks Rank #5 (Strong Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Arista Networks ANET, Keysight Technologies KEYS and Teradata TDC. While Arista Networks sports a Zacks Rank #1 (Strong Buy), Keysight Technologies and Teradata carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks has returned 29.8% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 18.9%.
Keysight Technologies has lost 5.6% in the year-to-date period. KEYS’ long-term earnings growth rate is currently projected at 11%.
Teradata has lost 41.3% in the year-to-date period. The long-term earnings growth rate for TDC is currently projected at 27.4%.
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