Soitec secures AI optics demand with surging photonics wafer orders

French chip materials manufacturer Soitec is securing multi-year customer commitments through deposits and fixed pricing to manage a surge in demand for wafers used in AI data-center optics. This strategy aims to provide greater visibility over future demand and protect profit margins as hyperscalers expand AI computing infrastructure.

As AI systems require higher volumes of data movement between components, optical technology is increasingly preferred over copper due to its superior speed, distance, and energy efficiency. Soitec provides the silicon substrate used in nearly all silicon photonics chips, with UBS estimating the company controls approximately 95% of the market.

CEO Laurent Remont indicated that revenue from photonics-SOI, the substrate used for these chips, is expected to more than double this financial year, surpassing $200 million. The company is currently working to sign capacity reservation agreements with more than 10 photonics customers.