Israeli MultiPhy electrifies its fusebox with $17M in alliance with Semtech

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Semiconductor startup MultiPhy made a couple of big announcements for its young company on Tuesday, scoring $17 million in a new funding round while entering a strategic alliance with the Semtech Corporation. MultiPhy first became known for developing a chipset that supports 100G Ethernet optical transceivers in data centers, which is still uncommon: Most chipmakers still manufacture for 40G Ethernet deployments. This technology is important for heavy data applications such as video streaming.

The investment comes from a combination of existing and new investors. The recent round will be put toward developing the next generation of its flagship solution FlexPhy IC, which will create chips to help transmit information for 400G Ethernet. Semtech will help push adoption of FlexPhy and take a major stake in MultiPhy. While not mentioning any new partners besides Semtech, existing investors (who may or may not have participated this round) include Carmel Ventures, Maayan Ventures, Vertex Ventures and Ransomshire Associates.

“As the market sets clear demand for significant increase in throughput connectivity and cost effectiveness, we expect single lambda 100G modules to become the mainstream with millions of ports deployed worldwide,” said MultiPhy CEO Avi Shabtai.

“Furthermore, with Semtech’s global customer relationships and support infrastructure, we are expanding the customer base that we can serve with our industry leading technology.”

The two companies will offer “a complete PHY and PMD solution to enable 100G modules requiring only single lane optics,” according to a joint press release, also laying the groundwork for 400G applications. Their announcement went on to say they expected their joint tech to significantly reduce the cost for data centers by reducing the “number of components in 100G modules.”

“With MultiPhy’s unique DSP technology, we expect the same 100Gbps per wavelength technology can be leveraged for both short reach intra-datacenter links and longer reach inter-datacenter links,” said Semtech President & CEO Mohan Maheswaran.

IHS Infonetics stated in May that 50% of data center transmission capacity will be at 100G by 2019, up from the recent standard of 40G. Other companies in the datacenter space competing for 100G/400G data collection include Inphi (NYSE:IPHI) and Acacia Communications, which has raised $23 million in two rounds.

Semtech has been publicly traded since 1967. MultiPhy has raised at least $24 million since 2010 and maintains offices in both Palo Alto, California and Ness Ziona, Israel.

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