Semtech (SMTC) CEO Acknowledges CopperEdge Delays Amid Investor Lawsuit – Hagens Berman

SMTC Investors with Losses Encouraged to Contact the Firm Before Apr. 22nd Deadline

/EIN News/ -- SAN FRANCISCO, April 14, 2025 (GLOBE NEWSWIRE) -- Semtech Corporation (NASDAQ: SMTC) is navigating a turbulent period, facing a securities class-action lawsuit alleging investor deception regarding its CopperEdge product line. Recent comments from the company’s CEO during the Q4 2025 earnings call have brought the company's close relationships with key customers into sharper focus, raising questions about prior awareness of product-related challenges.

Hagens Berman is investigating the alleged claims and urges investors who purchased Semtech securities and suffered substantial losses to submit your losses now.

Class Period: Aug. 27, 2024 – Feb. 7, 2025
Lead Plaintiff Deadline: Apr. 22, 2025
Visit: www.hbsslaw.com/investor-fraud/smtc
Contact the Firm Now: SMTC@hbsslaw.com
   844-916-0895

Semtech’s Customer Relationships at Center of CopperEdge Delayed Ramp:

The lawsuit, Kleovoulos v. Semtech Corporation, et al., centers on claims that Semtech misled investors about the readiness and projected ramp-up of CopperEdge, a critical component for advanced data center interconnects.

During the March 13, 2025, earnings call, CEO Hong Hou acknowledged delays, stating, "We are disappointed that the expected volume ramp would not materialize for FY ’26 due to rack architecture changes as we previously announced.”

Crucially, CEO Hou also highlighted the company's extensive collaboration with potential and "anchor" customers. “We remain engaged with over 20 potential customers, including hyperscalers, switch makers and the cable suppliers,” Hou stated. "Lastly, based on continued collaboration with our anchor customer [reportedly Nvidia], we expect our CopperEdge portfolio to be included in their future generation rack designs."

The Pending Semtech Securities Class Action

CEO Hou’s acknowledgement of close collaboration, specifically regarding "rack designs," has drawn attention in light of the lawsuit's claims that Semtech failed to disclose necessary rack architecture changes. The suit, filed in the Central District of California, claims the company overstated the product's market readiness and projected ramp-up timeline.

The complaint alleges claims on behalf of investors who purchased Semtech securities between August 27, 2024, and February 7, 2025. During this period, Semtech allegedly promoted its CopperEdge portfolio, designed for 400G and 800G data center applications using copper cable and backplane interconnects, asserting it provided "valuable solutions" to meet customer demands.

The complaint alleges Semtech made "false and misleading statements" by failing to disclose key information. Specifically, the suit contends the CopperEdge products did not meet the needs of a key server rack customer, required significant rack architecture modifications, and would not achieve the previously forecast fiscal 2026 ramp-up.

The revelation of these issues on February 7, 2025, triggered a sharp market reaction. Semtech disclosed that CopperEdge sales would not "ramp-up over the course of fiscal year 2026" due to "feedback from a server rack customer," "discussions with end users," and the need for "certain rack architecture changes." The company further revised its sales projections, indicating CopperEdge revenue would fall below the previously stated $50 million floor.

The market’s response was immediate and severe. On February 10, 2025, Semtech’s stock price plunged by more than 30%, resulting in a loss of over $1.4 billion in market capitalization in a single trading day, according to market data. The lawsuit seeks damages for investors who suffered losses as a result of the alleged misrepresentations.

“The CEO’s statements regarding close customer collaboration suggest a need for thorough investigation into the timeline of information sharing between Semtech and its customers,” said Reed Kathrein, the Hagens Berman Partner leading the firm's probe.

If you invested in Semtech and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the Semtech case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding Semtech should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email SMTC@hbsslaw.com.

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

Contact:
Reed Kathrein, 844-916-0895