Semtech Locks In Multi-Year Dedicated SiGe Capacity at Tower Fabs for AI Interconnect Chips

Semtech Corporation has committed to a multi-year agreement with Tower Semiconductor that secures dedicated silicon germanium (SiGe) manufacturing capacity across Tower's fabrication facilities in the United States, Israel and Japan.

Dedicated Capacity Deal Anchors Semtech's Optical Interconnect Roadmap

The deal, announced jointly from Camarillo, California, and Migdal Haemek, Israel, is designed to guarantee supply for Semtech's SiGe-based optical interconnect products as demand accelerates among customers building AI data center infrastructure.

The arrangement gives Semtech additional supply assurance on top of its current production, which the companies say matters as the customer base for Semtech's SiGe devices widens across multiple end markets.

According to the announcement, the geographic spread of the capacity also adds resilience and diversification to Semtech's manufacturing strategy. The agreement extends a collaboration that is now in its 20th year.

Tower Semiconductor, listed on Nasdaq and the Tel Aviv Stock Exchange under TSEM, positions itself as the leading foundry for high-value analog semiconductor solutions. Semtech, which trades on Nasdaq as SMTC, supplies high-performance semiconductors used in AI data center networking and in connected Internet of Things devices worldwide.

Moving Data, Spending Power

Both companies framed the deal around a single argument: in AI infrastructure, the binding constraint is shifting toward power, and much of that power is consumed by data movement rather than computation. As AI clusters grow to span racks, rows and entire campuses, the energy required to move each bit increasingly determines how much useful work each accelerator delivers, per the companies' statement. That logic extends to the speed roadmap itself.

Each generational step, from 800G to 1.6T and onward to 3.2T, raises the bar for bandwidth, signal reach and power consumed per bit, which in turn elevates the role of the high-speed analog front end that drives and receives signals. SiGe process technology, the foundation of Semtech's signal integrity portfolio, sits at the center of that requirement.

What the Portfolio Covers

Semtech's signal integrity lineup manufactured on Tower's SiGe process comprises transimpedance amplifiers (TIAs), modulator and laser drivers, and linear equalizers. These components support a broad set of interconnect architectures, including fully retimed optics (FRO), linear pluggable optics (LPO), linear receive optics (LRO), near-packaged optics (NPO), eXtra-dense pluggable optics (XPO), linear equalizers on PCB, and active copper cables (ACC). Semtech's position, as stated in the announcement, is that this product set allows it to address both copper links inside the rack and optical links across the data center as the industry transitions to its next generation of architectures.

Recent Recognition on the Industry Stage

The companies cited recent industry recognition as validation of the collaboration's output. At the European Conference on Optical Communication (ECOC) 2026, Semtech received the Optical Component Innovation (Chip/Wafer) award for its 224 Gbps per Lane TIA Family for Linear Pluggable Optics, a product built on Tower's leading-edge SiGe technology. The partnership goes beyond capacity commitments. Tower and Semtech maintain a joint technology roadmap aimed at securing product leadership across multiple generations of AI data center interconnects.

Leadership Commentary

Hong Hou, Semtech's President and Chief Executive Officer, said connectivity has become a primary factor in how far AI systems can scale. "Our customers are scaling interconnect bandwidth quickly and at massive scale. Meeting that demand requires long-term capacity planning and commitment with our manufacturing partners," Hou said.

He described Tower as a trusted partner of 20 years and welcomed the secured dedicated SiGe capacity across three regions, which he said will support growth across copper and optical interconnects from 800G and 1.6T today through 3.2T and beyond. Russell Ellwanger, Tower Semiconductor's Chief Executive Officer, said the strength of the partnership with Semtech is a source of profound satisfaction.

"Together, we are driving truly accretive, platform-level solutions that help advance their designs delivering best-in-class figures of merit across present-generation, next-generation and N+2 technologies," Ellwanger said.

He noted that by qualifying solutions well ahead of market need, both companies are prepared for immediate implementation as the market enters those generations. Ellwanger added that this positions the companies as key drivers of the technologies carrying the market forward, supporting continual expansion of Tower's already leading market share in optical transceiver connectivity within a high-growth market.

The Fab Network Behind the Agreement

The dedicated capacity draws on Tower's global manufacturing network, which today consists of one operating fab in Israel (200mm), two in the United States (200mm), and two in Japan (200mm and 300mm) held through its 51% ownership of TPSCo.

Tower also operates a shared 300mm facility in Agrate, Italy, together with STMicroelectronics. Beyond SiGe, Tower offers customizable process platforms including SiPho, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, non-imaging sensors, displays, and integrated power management (BCD and 700V). Its served markets span consumer, industrial, automotive, mobile, infrastructure, medical, and aerospace and defense.