Shares in AIM-listed semiconductor products firm IQE (LON:IQE) gained 18% after it announced a deal with US partner Tower Semiconductor (NASDAQ:TSEM). The multi-year agreement will see IQE supply specialist wafers for optical connectivity in AI-driven data centre infrastrusture.
IQE’s InP (indium phosphide) epiwafers will be used in several of Tower’s advanced silicon photonics platforms as part of its next-generation optical technologies. The firms will collaborate on transceivers and prototype modulators as well as optical circuit switches and other critical applications for data centres.
There is no mention of the monetary value of the agreement between IQE and Tower. However, Tower has signed up to a minimum purchase amount for each year of the life of the contract.
Separately, Tower will issue IQE a broad worldwide and royalty-free licence for certain patents. This move settles all litigation between the two companies in their ongoing patent dispute.
IQE chief executive Jutta Meier said he was ‘pleased to move forward with Tower, already a leader in silicon photonics’. Tower supplies major AI and datacentre customers as well as aerospace and defence firms like Northrop Grumman (NYSE:NOC).
Today’s news is positive on several fronts, as not only does it guarantee more revenue but it lays to rest the patent dispute with Tower. It also puts Cardiff-based IQE at the centre of the AI infrastructure conversation.
The firm has signed a few US deals in recent months, one with MACOM (NASDAQ:MTSI) in April and one with Lumentum (NASDAQ:LITE). IQE had been under offer, but it ended the formal sale process in April and raised a total of £81 million from shareholders.
Read the press release here:
https://www.iqep.com/investors
