IN Brief:
- IQE will supply indium phosphide epiwafers for Tower Semiconductor’s silicon photonics platforms.
- The collaboration supports 200Gb/s-per-lane transceivers, 400Gb/s-per-lane modulator prototyping, and optical circuit switching.
- The companies have also resolved prior porous silicon patent disputes through a separate licence agreement.
IQE has signed a multi-year agreement to supply indium phosphide epiwafers to Tower Semiconductor for optical connectivity systems serving AI-driven data-centre infrastructure.
The agreement covers InP epiwafers for several of Tower’s advanced silicon photonics platforms. The collaboration includes technology for 200Gb/s-per-lane pluggable transceivers, prototyping of next-generation 400Gb/s-per-lane modulators, and optical circuit switches for data-centre deployment. Tower has made a minimum purchase commitment in the first year, with reciprocal supply commitments from IQE and minimum volume commitments in later years.
A separate agreement provides IQE with a broad worldwide and royalty-free licence to porous silicon patents that had been the subject of an IP dispute between the companies. That settlement clears the legal background while the commercial work shifts towards photonics supply for AI infrastructure.
IQE’s role sits at the compound semiconductor material layer, where InP remains central to high-performance optical components because of its properties for light generation, modulation, and detection. Tower brings silicon photonics foundry capability and process platforms used in communications, infrastructure, industrial, medical, automotive, and aerospace markets. The agreement combines specialist epitaxy with a silicon platform aimed at high-volume optical connectivity.
The growth of AI infrastructure is placing heavy pressure on data-centre interconnect. Accelerator clusters need high-bandwidth links between processors, memory systems, storage, and switching fabric, while electrical links face increasing power, reach, and signal-integrity constraints at higher data rates. Silicon photonics gives data-centre architects another route, provided the optical components, electronic interfaces, packaging, and manufacturing flows can scale together.
Indium phosphide supply is therefore more than a materials detail. Optical platforms depend on wafer quality, repeatable epitaxy, integration compatibility, and long-term manufacturing visibility. Hyperscale systems cannot rely on bespoke optical components if deployment requires large volume, low defect rates, and predictable process control. Epitaxial wafer supply sits near the beginning of that chain, but its consistency shapes everything that follows.
The move from 200Gb/s-per-lane transceivers towards 400Gb/s-per-lane modulator technology also increases the burden on device performance and packaging. Higher data rates require tighter optical budgets, stronger thermal management, lower-loss interfaces, and careful handling of modulation efficiency. As optical circuit switching becomes more relevant to AI data-centre architectures, wafer-level repeatability and platform integration become central commercial concerns.
Related progress on III-V chiplet integration on silicon-CMOS interposers shows how compound semiconductor performance is being pulled into silicon-compatible integration routes across multiple applications. In RF systems, that means combining III-V materials with passive-rich interposers and high-density assembly. In data centres, it means matching InP optical capability with silicon photonics processes able to support volume production.
The UK dimension is significant because Cardiff-based IQE is part of a compound semiconductor cluster built around epitaxy, photonics, RF, power, and advanced materials expertise. That cluster has long been strongest at materials and specialist process capability. A multi-year supply agreement tied to AI data-centre optical connectivity gives the materials base a more direct role in one of the fastest-growing infrastructure markets.
Tower’s silicon photonics position has also become more visible as optical connectivity moves closer to mainstream AI infrastructure planning. The company has been building capacity and customer contracts around silicon photonics, and InP supply gives that roadmap an additional compound semiconductor layer. Foundry customers increasingly need optical platforms that do not force a choice between performance and manufacturing scale.
The next phase will depend on execution across wafer quality, volume supply, platform integration, component yield, and qualification. AI infrastructure demand can rise rapidly, but optical supply chains are slower to build because they rely on specialised materials, process knowledge, test capacity, and tight packaging tolerances. The agreement places InP epitaxy closer to the centre of data-centre photonics scaling, rather than leaving it as a specialist input at the edge of the platform.
