Soitec Secures Multi-Year Supply Deals as AI Wafer Demand Surges

Semiconductor materials maker Soitec is securing customers through multi-year supply agreements as demand accelerates for silicon photonics wafers used in AI data-centre infrastructure, with Singapore emerging as an important part of its capacity expansion strategy.

The French company is introducing fixed pricing, committed volumes and customer deposits as hyperscale data centres increase their use of optical connections to move data between AI computing systems.

Soitec expects revenue from its Photonics-SOI business to more than double this financial year to above US$200 million, with chief executive Laurent Remont describing that level as a floor rather than a ceiling.

Multi-Year Contracts Lock In AI Demand

Around 80% of Soitec’s capacity reservation agreements with photonics customers are expected to be signed shortly, covering more than 10 customers.

Under the agreements, customers commit to specified wafer volumes at fixed prices and provide deposits linked to those commitments. Customers meeting their contracted volumes receive the deposits back, while those purchasing less risk forfeiting them.

Soitec is also requiring customers to provide inventory information, helping the company manage capacity allocation and reduce the risk of customers reserving more supply than they ultimately require.

The agreements provide Soitec with greater visibility as it plans production capacity around rapidly increasing AI infrastructure demand.

Optical Connections Gain Ground in AI Data Centres

The surge in demand is being driven by the growing use of silicon photonics in high-speed data-centre networks.

As AI clusters become larger, traditional copper connections face increasing limitations in power consumption and performance, pushing operators towards optical interconnects capable of moving larger volumes of data more efficiently.

Soitec’s Photonics-SOI substrates support technologies including optical transceivers and co-packaged optics used to connect processors, racks and data-centre infrastructure.

According to Soitec, Photonics-SOI provides higher bandwidth and improved energy efficiency for high-speed optical communications.

Soitec Holds Strong Position in Photonics Wafers

Soitec supplies the engineered substrate used in most silicon photonics chips.

UBS estimates the company controls around 95% of the Photonics-SOI substrate market, giving it a central position in a semiconductor supply chain increasingly linked to AI infrastructure.

Demand growth has also translated into strong investor interest, with Soitec shares having risen sharply during 2026 as expectations for AI-related optical networking increased.

The company is now focused on ensuring production capacity can keep pace without immediately committing to another semiconductor fabrication facility.

Existing Fabs Used to Expand Capacity

Soitec does not expect to require an entirely new fab before around 2029.

Instead, the company is increasing production through existing facilities by reallocating underused manufacturing capacity and installing additional equipment within available cleanroom space.

Its manufacturing strategy allows capacity to be shifted between different engineered-substrate technologies as demand changes.

Soitec said these measures should provide sufficient production capacity for the current and following financial years.

The company has also identified available cleanroom space at its French facilities that can be converted to support additional Photonics-SOI production.

Singapore Becomes Part of Photonics-SOI Expansion

Singapore is taking a larger role in Soitec’s production network.

Until earlier this year, the company produced Photonics-SOI exclusively in France. It has since qualified customers for production at its Pasir Ris facility in Singapore.

The Singapore site supports RF-SOI, FD-SOI and Photonics-SOI production and forms part of Soitec’s broader manufacturing footprint in Asia.

An additional building at the Singapore site is already constructed but has not yet been fully equipped.

Soitec expects to decide within the next six to 12 months whether to install production equipment in that building, giving the company another option for increasing wafer output without constructing an entirely new fab.

Its Singapore manufacturing complex has been designed for progressive capacity expansion as customer demand increases.

AI Growth Reshapes Semiconductor Capacity Planning

Soitec’s multi-year agreements highlight how rapidly growing AI infrastructure demand is changing planning across the semiconductor supply chain.

Capacity for specialised materials, optical networking components and advanced semiconductor production is increasingly being secured years in advance as hyperscalers expand AI data centres.

For Soitec, the strategy combines longer-term customer commitments with flexible use of its existing factories rather than immediately building new production facilities.

Singapore is becoming increasingly important within that approach, giving the company additional Asian manufacturing capacit