Soitec upgraded by Bank of America on silicon photonics demand

Bank of America has upgraded French semiconductor materials manufacturer Soitec from ‘Neutral’ to ‘Buy’, nearly doubling its price target from €152 to €300. The upgrade is driven by the company’s dominant position in the silicon photonics market, where it holds over 90% market share for specialized SOI (Silicon-on-Insulator) substrates.

As AI data centers require increasing bandwidth for high-speed optical communications, Soitec’s technology—which uses light instead of electrical signals to transfer data—is seeing surging demand. Bank of America projects Soitec’s silicon photonics wafer substrate revenue to grow by 172% in fiscal year 2027, 74% in 2028, and 57% in 2029.

The company has secured long-term ‘take-or-pay’ contracts with major clients, providing high visibility for future orders. Analysts also anticipate a potential €700 million expansion of Soitec’s Singapore facility to add 1 million 12-inch wafers of annual capacity. Following the report, Soitec’s shares rose approximately 5% in Paris, continuing a massive rally that has seen the stock increase more than fivefold since the start of the year.