Tower Semiconductor and Semtech Expand SiGe Partnership for AI Data Centre Interconnects

Tower Semiconductor (Nasdaq/TASE: TSEM), the leading foundry for high-value analogue semiconductor solutions, and Semtech Corporation (Nasdaq: SMTC), a leading provider of high-performance semiconductors powering AI data centre networking and intelligent, connected Internet of Things ("IoT") devices worldwide, announced an expanded multi-year agreement that builds on the companies’ 20-year partnership. Under the agreement, Semtech will invest in securing dedicated silicon germanium (SiGe) capacity at Tower in support of its strong design wins and demand for AI Data Center optical interconnect components.

AI’s next constraint is power, and a growing share of that power is spent moving data rather than computing it. As AI clusters scale across racks, rows and campuses, the energy cost of moving each bit is becoming central to how much useful work each accelerator can deliver. Each step in the speed roadmap, from 800G to 1.6T and on to 3.2T, raises the requirements for bandwidth, reach and power per bit, and increases the importance of the high-speed analog front end that drives and receives the signal.

Semtech’s signal integrity portfolio, including transimpedance amplifiers (TIAs), modulator and laser drivers and linear equalisers, is built on Tower’s SiGe process technology and serves fully retimed optics (FRO), linear pluggable optics (LPO), linear receive optics (LRO), near-packaged optics (NPO), eXtra-dense pluggable optics (XPO), linear equalisers on PCB and active copper cables (ACC). Semtech believes that, together, these products position it to address copper links within the rack and optical links across the data centre as the industry moves to its next generation of architectures.

A testament to the results of the partnership is Semtech’s recent Optical Component Innovation (Chip/Wafer) award at the European Conference on Optical Communication (ECOC) 2026. The award recognises Semtech’s 224 Gbps per Lane TIA Family for Linear Pluggable Optics built on Tower’s leading-edge SiGe technology. Tower and Semtech continue to work closely not only on capacity but also on a joint technology roadmap designed to secure product leadership in multi-generational AI data centre interconnects.

The secured capacity spans Tower’s fabs in the United States, Israel and Japan, adding supply resilience and geographic diversification to Semtech’s manufacturing strategy. Building on current production, the agreement gives Semtech additional supply assurance as demand for its SiGe-based products is expected to grow across a broadening base of customer programs and end markets.

“Connectivity is now a primary factor in how far AI systems can scale,” said Hong Hou, Semtech President and Chief Executive Officer. “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. Tower has been a trusted partner to Semtech for 20 years, and we are very pleased with our partnership agreement that secures dedicated SiGe capacity across three regions to grow across copper and optical interconnects, from 800G and 1.6T today through 3.2T and beyond.”

“It is a source of profound satisfaction that our partnership with Semtech has grown so strong,” said Russell Ellwanger, Chief Executive Officer, Tower Semiconductor. “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. By qualifying these solutions well ahead of market need, we both stand fully prepared for immediate implementation as the market moves into these generations. In doing so, we are the key drivers of the technologies carrying the market forward, ensuring a continual expansion of our already leading market share in optical transceiver connectivity within this high-growth market."