Semtech Acquires HieFo For $34 Million After Nvidia’s Photonics Investments

The acquisition will boost Semtech’s data center portfolio, bolstering its U.S. technology supply chains, adding new capacity, and resilience in its AI infrastructure buildout, it said.

• The announcement comes a day after chip giant Nvidia said it had invested $4 billion in two optical and photonic companies, Coherent Corp. and Lumentum Holdings Inc. 
• Semtech said that it had acquired HieFo in an all-cash transaction. 
• Semtech also added that HieFo’s acquisition is expected to be accretive to adjusted diluted earnings per share within the first year.

Semtech Corp. on Tuesday announced that it has acquired HieFo Corp., a California-based photonics and optical chips company, for $34 million.

The acquisition will boost the semiconductor company’s data center portfolio, bolstering its U.S. technology supply chains, adding new capacity, and resilience in its artificial intelligence infrastructure buildout, it said.

The announcement comes a day after chip giant Nvidia Corp. (NVDA) said it had invested $4 billion in two optical and photonic companies, Coherent Corp. (COHR) and Lumentum Holdings Inc. (LITE), alongside multiyear strategic agreements in both firms to advance innovation in optics technologies.

Deal Contours

Semtech (SMTC) said that it had acquired HieFo in an all-cash transaction. “To meet significantly growing demand from numerous hyperscalers and other customers across the AI ecosystem, Semtech has initiated an investment and hiring plan at HieFo’s Alhambra, California site to expand domestic manufacturing capacity and accelerate product development,” the company said in a statement.

Semtech also added that HieFo’s acquisition is expected to be accretive to adjusted diluted earnings per share within the first year.

Meanwhile, Hong Hou, president and CEO of Semtech, said, “By combining HieFo’s proven InP technology, including lasers and gain chips, with Semtech’s industry-leading TIAs and laser drivers, we can offer customers a comprehensive solution for next-generation optical platforms, including co-packaged optics (CPO) or near-packaged optics (NPO), strengthening Semtech’s position as a leader in high-bandwidth, low-power and low-latency networking solutions.”

Photonics Push

Nvidia’s investment in two photonics companies has put the focus on co-packaged optics technology.

Wall Street analysts believe that Nvidia’s investment in COHR and LITE stock has set up a better long-term payoff for optical shareholders.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around SMTC shares remained in the ‘neutral’ territory amid ‘normal’ message volumes.

Shares of SMTC have gained more than 153% in the last year.

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