Semtech is the developer of LoRa, a long-range networking initiative for the Internet of Things.[4] As of March 2021, over 178 million devices use LoRa worldwide.[5] LoRa has been used in satellites, tracking of animals,[6]UAVradio control,[7] and natural disaster prediction,[8]
Semtech has been publicly traded since 1967. In 1995, Semtech ranked fifth on the Bloomberg 100 list of top-performing stocks of 1995 on the New York and American stock exchanges and the NASDAQ National Market.[9]
Products
Semtech offers a variety of products, including LoRa, a long-range, low-power networking platform; receivers and transmitters; touch and proximity devices; wireless charging; and power management solutions.[10] Semtech's chips were utilized in products using the Amazon Sidewalk protocol,[11] as well as to monitor water leaks.[12] A collaboration with Unabiz to produce IoT devices that use both Semtech's LoRaWAN as well as Unabiz's Sigfox systems was announced in July 2023.[13] Semtech additionally offers HDMI to SDI converter chips[14] as well as LoRa transceiver with global coverage.[15] Semtech also offers cloud connectivity and Voice over LTE services.[16][17]
Acquisitions
In December 1999, Semtech bought USAR Systems Inc., a maker of embedded devices for handheld and notebook computers, for $26.7 million in stock.[18][19]
In March 2012, it bought Gennum Corporation, a supplier of high-speed analog semiconductors, for approximately CA$500million (US$494million).[20] In the same month, they acquired Cycleo SAS, a supplier of wireless semiconductor products, for $5 million in cash.[21][22][23]
In August 2022, Semtech agreed to buy Canadian Internet of things (IoT) technology company Sierra Wireless in an all-cash transaction valued at US$1.2billion including debt[24], representing a 25% premium on Sierra's market value at the time [25] The acquisition, completed in January 2023, was championed by then Semtech President & CEO Mohan Maheswaran. The subsequent write down of $887M in 2024 against the all cash purchase price [26][27] suggested that the deal was significantly over valued[27]. There was also a reduction of in gross profit margins of the combined entity, reducing overall margin from an average of 63% for 2021 to 2023 to 49% in 2024, resulting in a significant loss for Semtech shareholders [28].
The activist shareholder Lion Point Capital played a significant role in driving the acquisition. Having acquired a 9.4% stake in Sierra Wireless in April 2020, Lion Point entered into a cooperation agreement with Sierra Wireless resulting in the restructuring of the Sierra Wireless Board [29]. By the time Semtech announced its intent to acquire Sierra Wireless in August 2022, Lion Point Capital had become a significant shareholder of Sierra Wireless, enabling them to influence and benefit from the acquisition process[30]. During this period Semtech's stock price plummeted from a high of $89.05 on November 29, 2021 to $26.53 in September 25, 2022 following the announcement of Semtech's intent to acquire Sierra Wireless.
While specific details are not public, Lion Point acquired a total of 4% of Semtech Corporation's outstanding shares through March 20, 2023 before entering into a cooperation agreement with Semtech, leading to the appointment of two independent directors by Lion Point, the subsequent resignation/retirement of Maheswaran [31] and the resignations of Semtech's Chairman Rockell N. Hankin (77); who had served on Semtech's Board of Directors from 1988 and as Chair from August 2006; and Sylvia Summers Couder (72), who served on Semtech's Board from June 2012 including as Chair of Semtech's Board Audit Committee [32].
As a result of his resignation/retirement, Maheswaran earned an additional $1.7 million in cash and $7 million in stock as part of his separation agreement [33]. Maheswaran does not currently serve in any executive capacity based on publicly available information. Hankin continues to serve as Chairman of the Kavli Foundation, as a member of the State Bar of California and on the Board of Ultraviolet Devices Inc. Couder continues to serve as a Non Executive Board Director of Aristocrat Leisure.
By January 2024, the latest date for which figures are publicly available, Semtech had fired approximately 40% of the headcount added through the acquisition of Sierra Wireless, with anecdotal evidence suggesting that the great majority of layoffs were born by the business units that comprised Semtech before the Sierra acquisition[34].
Between November 29, 2021 and October 20, 2023 Semtech shareholders suffered an 83% fall in the value of their investment in the company, substantially greater than the 9.3% decrease observed in the S&P 500 Index during the same time frame[35]. In the same period Semtech's reported GAAP diluted EPS fell from a high of $0.91 profit per share in fiscal year 2021 to a $(17.03) loss per share in 2023 and a $(9.98) loss per share in 2024, resulting in significant shareholder value destruction.
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US$869 million (2024)
US$−371 million (2024)
