IQE has signed a multi-year agreement to supply Indium Phosphide (InP) epiwafers to Tower Semiconductor, tapping directly into the surging demand for optical connectivity across AI data centres.
The compound semiconductor specialist will feed several of Tower’s advanced silicon photonics platforms, underpinning IQE’s product roadmap for next-generation optical technologies.
The deal puts IQE squarely within one of the strongest structural growth themes in the market right now: the build-out of AI-driven data centre infrastructure, with a $30bn market-cap partner.
The collaboration spans 200Gb/s-per-lane pluggable transceivers, prototyping next-generation 400Gb/s-per-lane modulators, and optical circuit switches destined for data centre deployment.
Tower has committed to a minimum purchase in the first year, with minimum volume commitments thereafter, alongside a reciprocal supply commitment from IQE. This is the kind of visibility that should help firm up the IQE’s revenue base as the agreement matures.
Under a separate arrangement, Tower will grant IQE a royalty-free worldwide licence for the porous silicon patents that had been the subject of litigation between the two parties, thereby resolving the dispute entirely and clearing the legal overhang.
Jutta Meier, Chief Executive Officer of IQE, said: “I am pleased to move forward together with Tower, already the leader in silicon photonics. This agreement reinforces IQE’s position within Tier 1 global hyperscale cloud and AI infrastructure markets. With decades of InP epitaxy expertise and established high-volume manufacturing capability, IQE is primed to support next-generation optical connectivity applications as they scale from innovation to commercial deployment.”
IQE recently raised £81m from strategic and retail investors to help reduce debt pressures and clear the way for accretive deals such as this.