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MACOM (MTSI) Boosts Portfolio With Two-Chip Analog Solution

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MACOM Technology Solutions Inc. (MTSI - Free Report) has unveiled a two-chip analog solution, suitable for 200G and 400G short reach modules as well as active optical cable applications in data centers.

The chipsets include two combo devices — MATA-38044 and MALD-38045— that consume less power and can be operated at Ethernet, Fibre Channel and InfiniBand PAM-4 and NRZ data rates up to 56 gigabits per second.

Moreover, the two-chip solution is an alternative to traditional digital signal processing (DSP)-based technology as it consumes less power with low latency and cost as well as requires a smaller footprint in comparison to a DSP solution.

The latest move is expected to drive MACOM’s performance in data center end markets, from which it generated 24% of total revenues for fiscal second-quarter 2021. Also, revenues from this particular end market grew 36% year over year.

Data Center Market Prospects

The data center market has been rapidly growing in recent times as it has created a fundamental change in the operational strategies of various industries.

According to a Research and Market report, investments in data center market are expected to hit $432.14 billion by 2025, witnessing a CAGR of 9.9% during the period of 2021-2025

In addition, a report by Technavio reveals that this market is likely to register a CAGR of 21% between 2021 and 2025.

Hence, MACOM remains well positioned to capitalize on the abovementioned prospects on the back of its robust data center offerings including PAM-4 PHY, TIAs, Modulator Drivers, Lasers and Silicon Photonics.

Expanding Product Portfolio

The latest move bodes well for MACOM’s growing focus on strengthening the product portfolio.

Apart from the recent move, the company has made the production release of its new high-speed laser portfolio named CLEAR DIAMOND LASERS to gain momentum in telecommunication and data center markets.

In addition, the company — in collaboration with Modelithics — introduced its new GaN Product Model Library. The models are suitable for high-power microwave applications.

Moreover, MACOM introduced a new high voltage capacitor semiconductor process, which is suitable for non-commodity applications in automotive renewable energy, industrial, medical and defense systems markets.

We believe the company’s expanding product portfolio will continue to shape its growth trajectory across various end markets.

Zacks Rank & Other Stocks to Consider

Currently, MACOM carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader technology sector include Microchip Technology Incorporated (MCHP - Free Report) , MaxLinear, Inc. (MXL - Free Report) and Monolithic Power Systems, Inc. (MPWR - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Microchip, MaxLinear, and Monolithic Power are currently projected at 15.3%, 20% and 25%, respectively.

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