Soitec’s shares advanced 6% on Monday as the French semiconductor materials company locked in multi-year supply agreements tied to AI data center optics demand.
The contracts, which require customers to place deposits and commit to fixed pricing, cover over 80% of Soitec’s capacity reservation agreements with photonics customers. More than 10 such deals are expected to be finalized within the next two weeks, with the remainder to be signed within a month. The agreements include clauses that forfeit deposits if customers fail to take the agreed volumes, while volumes above the committed level trigger renegotiation of pricing terms.
Soitec supplies the silicon-on-insulator (SOI) wafers that underpin nearly all silicon photonics chips, a critical component for AI infrastructure where optical connections replace copper to address power and performance limitations. UBS estimates the company holds a 95% market share in this segment, underscoring its dominant position in a rapidly expanding market.
Chief Executive Laurent Remont described the contract structure as a mechanism to align customer incentives with Soitec’s capacity planning. "That's a way for us to have our customer with skin in the game," Remont said. The company does not anticipate needing a new manufacturing plant until around 2029, relying instead on existing capacity across its facilities in France and Singapore.
Last month, Soitec projected photonics-SOI revenue would more than double in its current financial year, rising from slightly above $100 million to over $200 million. Remont characterized this figure as "absolutely a floor," signaling confidence in sustained demand growth as hyperscalers expand AI infrastructure.
