Semtech's recent Q3 and Q4 2024 earnings calls have sparked a flurry of analyses, with analysts focusing on the company's performance in high-growth areas like AI interconnect and data center optical solutions. However, a deeper dive into the transcripts reveals a subtle but potentially explosive narrative playing out beneath the surface – Semtech's LoRa technology, often relegated to the fringes of the IoT conversation, might be positioning itself as a critical enabler for the next generation of wireless technology, 5G Advanced.

While the buzz around Semtech's FiberEdge and CopperEdge platforms for 800 gig and 1.6 terabit applications is undeniably exciting, the company's subtle emphasis on LoRa's evolving role paints a picture of a strategy that goes beyond mere component sales and into the realm of complete, integrated IoT solutions.

Paul Pickle, Semtech's President and CEO, repeatedly emphasized the need to 'make private network deployment a lot easier,' positioning LoRa as a key player in this vision. This strategic shift is bolstered by a number of key developments highlighted in the transcripts:

Growing Demand for Private Networks: Semtech reported sequential increases in connected in-node and connected gateway sales, suggesting a sustained appetite for private network solutions, even amidst economic uncertainty. LoRa's Integration into Custom SoCs: This strategic move opens up new application areas for LoRa, particularly in the burgeoning hearing aid market, highlighting Semtech's push for broader technology integration. European Utilities Embracing LoRa: Multiple European utilities have announced RFPs specifically requiring LoRa solutions, demonstrating a growing international recognition of the technology's potential.

While Semtech's immediate focus is on consolidating its IoT portfolio and formulating a more comprehensive strategy, the breadcrumbs point towards a much grander ambition. 5G Advanced, the next evolutionary step in wireless technology, promises to deliver ultra-reliable low latency communication (URLLC) and enhanced mobile broadband (eMBB) capabilities – features that align perfectly with the private network use cases LoRa is already targeting.

Here's where the hypothesis gets interesting. Could Semtech be quietly preparing to leverage LoRa as a bridge between the massive sensor networks of the IoT and the high-performance, low-latency capabilities promised by 5G Advanced?

Consider this: Semtech is investing in 5G Advanced solutions: The company is developing products like TriEdge 50 gig combo drivers and CopperEdge 50 gig ACCs, showcasing a clear interest in the next generation of wireless technology. LoRa's low-power, long-range capabilities are ideal for connecting sensors in remote or challenging environments – exactly the type of applications where 5G Advanced deployments will encounter challenges.

Semtech's leadership position in the cellular module market further strengthens this hypothesis. The company is already capitalizing on regulatory concerns surrounding Chinese module suppliers, seeing a 'meaningful share shift' in pipeline and design wins. This momentum in the module business, combined with a potential LoRa integration strategy, could position Semtech to become a dominant player in the 5G Advanced ecosystem.

Let's quantify this potential opportunity. The global cellular IoT module market is projected to reach $9 billion by 2027, with North America representing a significant portion of this growth. Semtech's current module revenue, estimated at $130 million annually, represents less than 2% of this potential market. If the company can successfully leverage LoRa's strengths and integrate it with its existing module and software offerings, it could unlock a massive revenue expansion opportunity in the 5G Advanced era.

Semtech's Potential Module Revenue Growth in 5G Advanced Era

The following chart illustrates Semtech's potential revenue growth in the cellular IoT module market, assuming successful integration of LoRa with its module and software offerings.

Semtech's 'Whisper Network' built on LoRa technology may not be making headlines today, but its potential to disrupt the wireless landscape and fuel a new wave of IoT innovation should not be underestimated. As the company refines its strategy and unveils its long-term vision for LoRa, it will be fascinating to see how this 'unsung hero' of the IoT emerges as a critical enabler for the future of wireless connectivity.

"Fun Fact: Semtech's LoRa technology played a key role in enabling the first successful transmission of data from a sensor located on the summit of Mount Everest, demonstrating its ability to operate in extreme environments."