Tower Semiconductor (NASDAQ:TSEM) shares surged nearly 9% after the company signed a multi-year indium phosphide epiwafer supply agreement with IQE, targeting the fast-growing AI data center optical connectivity market.
Under the deal, IQE will supply InP epiwafers to support Tower's advanced silicon photonics platforms, including 200Gbps/lane pluggable transceivers and prototyping of 400Gbps/lane modulators, as well as optical circuit switches.
The agreement includes first-year minimum purchase and reciprocal supply commitments, along with continuing minimum volume commitments.
As part of the arrangement, the two companies also settled all prior intellectual property disputes and litigation, with Tower granting IQE a worldwide royalty-free license covering the porous silicon patents involved.