French semiconductor‑materials company Soitec announced it is moving customers into multi‑year supply agreements that include cash deposits and fixed pricing. The strategy, explained by CEO Laurent Remont, is intended to balance the value Soitec provides with the prices it can command as demand for its silicon‑photonic wafers spikes.
Revenue outlook and market share
Soitec told investors last month that its photonics‑SOI revenue would more than double this financial year, climbing from just over $100 million to a floor of $200 million. The company holds an estimated 95% share of the silicon‑photonics substrate market, according to UBS, and its stock has nearly quadrupled this year as AI‑related optical networking demand accelerates.
Contract structure
About 80% of Soitec’s capacity‑reservation agreements with more than ten photonics customers are expected to be signed within the next two weeks, with the remainder due within a month. The contracts lock in a price and require a deposit tied to the committed volume. Customers that meet their volume commitments receive the deposit back; those that fall short forfeit it. Volumes above the agreed level trigger new pricing discussions. The agreements also require customers to share inventory data to prevent over‑ordering that could limit competitors’ access to wafers.
Expansion plans
Soitec does not anticipate needing a new fab until around 2029. Instead, it is pursuing three levers to increase capacity: shifting output between businesses using shared under‑utilised facilities, adding additional tools within existing clean‑room space, and equipping an unequipped building in Singapore, which could add capacity within six to twelve months if required. The company has already qualified customers at its Singapore site and produced photonics‑SOI in France for decades.
U.S. market outlook
Remont said there is currently no need for a U.S. plant, noting that customers are “more desperate to get wafers than being too picky about where the location for production is.” The firm’s focus remains on meeting global AI‑infrastructure demand while leveraging existing facilities.
($1 = 0.8590 euros)
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
