- Semtech Corp. acquired photonics firm HieFo Corp. for $34 million to bolster its AI infrastructure and U.S. supply chains.
- The deal follows NVIDIA‘s announcement of a $4 billion investment in optical companies Coherent and Lumentum.
- Semtech expects the all-cash acquisition to be accretive to earnings within the first year.
- The company plans to expand manufacturing capacity at HieFo’s California site to meet growing AI demand.
On Tuesday, Semtech Corp. announced its acquisition of California-based photonics company HieFo Corp. for $34 million. The move aims to boost its data center portfolio and strengthen U.S. technology supply chains for AI infrastructure.
This announcement comes just one 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). Consequently, Wall Street analysts believe Nvidia’s investments have set up a better long-term payoff for optical shareholders, according to reports.
Semtech (SMTC) completed the HieFo purchase in an all-cash transaction. To meet surging demand from hyperscalers, the company will expand domestic manufacturing capacity at HieFo’s Alhambra site.
Furthermore, the acquisition is expected to be accretive to adjusted diluted earnings per share within the first year. CEO Hong Hou stated, “By combining HieFo’s proven InP technology… with Semtech’s industry-leading TIAs and laser drivers, we can offer customers a comprehensive solution for next-generation optical platforms.”
Meanwhile, retail sentiment around SMTC shares on Stocktwits remained neutral amid normal message volumes. Shares of SMTC have gained more than 153% in the last year.
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