en.Wedoany.com Reported - Semiconductor materials supplier IQE and foundry Tower Semiconductor have signed a multi-year agreement to jointly develop optical connectivity solutions based on indium phosphide (InP) technology, supporting AI-driven data center infrastructure for industrial applications.
The agreement focuses on the supply of InP epitaxial wafers. IQE will provide epitaxial wafers for multiple silicon photonics platforms from Tower, supporting optical technologies designed for high-performance AI environments used in smart factories and advanced manufacturing systems.
The collaboration covers production technologies supporting 200Gb/s per channel pluggable transceivers, with plans to develop future 400Gb/s per channel modulators. The agreement also involves optical circuit switching applications—a technology gaining attention for helping operators more efficiently manage traffic within large-scale AI data centers serving manufacturing.
As AI deployment in industrial sectors increases, network infrastructure becomes a critical bottleneck. Optical components used for data transmission between systems are attracting new investment across the supply chain. The agreement solidifies IQE's position in the AI and cloud infrastructure market supporting manufacturing digitalization.
IQE CEO Jutta Meier expressed delight in partnering with Tower, already a leader in silicon photonics. The agreement strengthens IQE's position in the global tier-one hyperscale cloud and AI infrastructure market. Leveraging decades of InP epitaxial technology experience and proven high-volume manufacturing capabilities, IQE is ready to support next-generation optical connectivity applications from innovation to commercial deployment.
AI is driving competition for more powerful chips, but the infrastructure connecting these processors is equally important. As hyperscale operators build larger AI clusters, moving massive amounts of data between servers, switches, and storage systems poses a significant challenge. Optical networking technology is seen as a solution, allowing data centers to scale bandwidth while managing power consumption and latency.
The partnership combines IQE's expertise in compound semiconductor materials with Tower's proven silicon photonics manufacturing capabilities. Silicon photonics leverages semiconductor manufacturing processes to integrate optical communication components, helping improve performance and support mass production. Tower stated that adding InP-based components to its silicon photonics platform will help meet the performance requirements of future AI infrastructure.
Tower Semiconductor President Dr. Marco Racanelli expressed pleasure in collaborating with IQE, which becomes a key supplier for its next-generation photonic technology, adding high-performance InP components to a mature, high-volume silicon photonics platform.
In addition to the supply agreement, the parties have resolved an intellectual property dispute. Under a separate arrangement, Tower will grant IQE a worldwide royalty-free license covering porous silicon patents previously involved in litigation between the two companies. The settlement removes a potential obstacle, allowing both companies to focus on expanding their roles in the rapidly growing AI market.
