Soitec locks customers into multi-year deals amid AI wafer demand surge

When you control 95% of a market that’s suddenly white-hot, you get to set the terms. Soitec, the French semiconductor materials specialist, is doing exactly that, finalizing multi-year capacity reservation agreements with more than ten photonics customers who need its specialized wafers to build the optical interconnects powering AI data centers. CEO Laurent Rémont revealed that roughly 80% of those deals are expected to be signed within one to two weeks, with the rest closing within a month. The contracts include fixed pricing and structured cash deposits, a mechanism that essentially forces customers to put skin in the game before Soitec commits manufacturing capacity to them. The deposit game Customers who hit their volume commitments get their deposits back. Those who fall short forfeit the cash. With an estimated 95% share of the Photonics-SOI substrate market, according to UBS, Soitec is essentially the only game in town for the wafers that make silicon photonics chips possible. These aren’t ordinary silicon wafers. Photonics-SOI (silicon-on-insulator) substrates are the foundation for optical transceivers, the components that convert electrical signals to light and back aga...