Semtech (SMTC) reports that demand for its AI networking chips currently exceeds supply capacity by three times. CEO Hong Hou disclosed the imbalance during the company’s second-quarter fiscal 2027 earnings release on August 25, 2026.
The company is currently scaling production of its next-generation 1.6T AI optical interconnects. Shipments of these components are already underway to a major U.S. hyperscaler data center client.
Management identifies these supply constraints as the primary bottleneck for revenue growth. Susquehanna maintains a $200 price target for the stock following the update.