Semtech Corporation (Nasdaq: SMTC) has agreed to sell its cellular module business to Compal Electronics (TWSE: 2324) for $62 million in cash, subject to customary adjustments, according to a company press release.

Under the terms of the deal, Compal will acquire substantially all assets and operations of Semtech's cellular module business, including associated intellectual property, customer relationships, and personnel. Both companies' boards of directors have approved the transaction.

The deal is expected to close during the fourth quarter of Semtech's 2027 fiscal year, pending regulatory approvals and other customary closing conditions.

Hong Hou, president and chief executive officer of Semtech, said the divestiture is intended to concentrate resources on its data center and LoRa connectivity businesses. "This divestiture sharpens our focus on the product portfolio where we have the strongest conviction in growth and industry leadership: data center and LoRa connectivity," Hou said.

UBS Investment Bank served as financial advisor to Semtech, and O'Melveny & Myers LLP served as legal counsel for the transaction.