Semtech Corporation (SMTC) Securities Class Action

A class action lawsuit has been filed against Semtech Corporation (NASDAQ: SMTC), a prominent high-performance, semiconductor, Internet of Things systems and cloud connectivity service provider, alleging that the company misled investors about the suitability of- and the ramp-up schedule for- its CopperEdge^TM product portfolio. The suit, captioned Kleovoulos v. Semtech Corporation, et al., No. 2:25-cv-01474 (C.D. Cal.), represents investors who purchased or acquired Semtech securities between August 27, 2024 and February 7, 2025.

During the Class Period, Semtech has touted its CopperEdge^TM products which are intended for use in next generation 400G and 800G data center interconnects using copper cable and backplane interconnects. The company has said “the new CopperEdge portfolio continues to offer valuable solutions that our customers need to meet current and future market demands[.]”

The complaint alleges that Semtech made false and misleading statements, while failing to disclose crucial information. Specifically, the suit contends that its CopperEdge^TM products did not meet the needs of its server rack customer or end users. Furthermore, it contends that the CopperEdge^TM products required certain rack architecture changes and that, as a result, CopperEdge^TM product sales would not (as previously represented) ramp-up during fiscal 2026.

Investors learned the truth on February 7, 2025, when Semtech revealed that CopperEdge^TM sales would not “ramp-up over the course of fiscal year 2026.” The company blamed this adverse development on “feedback from a server rack customer,” “discussions with end users of the server rack platform,” and the need for “certain rack architecture changes.” As a result, the company expects CopperEdge sales to be “lower than the Company’s previously disclosed floor case estimate of $50 million.” 

The market reacted swiftly. On February 10, 2025, Semtech’s stock price plummeted by over 30%, erasing over $1.4 billion in market capitalization in a single trading day.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the SMTC investigation about?

We are concerned that Semtech may have known about- but did not disclose that- there were problems with its CopperEdge^TM products, including Nvidia’s reported plan to come out with a new processing unit to address heating issues that may be linked to Semtech’s products.

WHAT SHOULD I DO?

I worked at SMTC. What should I do?

If you were an employee of SMTC, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower 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, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in SMTC, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any SMTC investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.