Semtech Secures Dedicated SiGe Capacity at Tower for AI Interconnect

Tower Semiconductor and Semtech Corporation announced on October 13, 2026, an expanded multi-year agreement under which Semtech will invest in securing dedicated silicon germanium (SiGe) capacity at Tower, building on the companies’ 20-year partnership to support optical and copper interconnects for AI data center infrastructure.

The joint announcement, datelined Migdal Haemek, Israel, and Camarillo, California, ties the capacity investment to what the companies described as strong design wins and demand for AI data center optical interconnect components. Tower operates as a foundry for high-value analog semiconductor solutions, while Semtech supplies high-performance semiconductors for AI data center networking and connected Internet of Things devices.

Dedicated Capacity Across Three Regions

The secured capacity spans Tower’s fabs in the United States, Israel, and Japan, and the companies said the footprint gives Semtech’s manufacturing strategy added supply resilience and geographic diversification. The agreement builds on current production and gives Semtech additional supply assurance, with demand for its SiGe-based products expected to grow across a widening base of customer programs and end markets, according to the announcement.

The release’s forward-looking statements caution that results could differ from projections, citing Tower’s ability to install equipment and expand SiGe manufacturing capacity at its fabs on the anticipated timeline, the possibility that demand for Semtech’s SiGe-based products does not develop as anticipated or that Semtech does not fully utilize its reserved capacity, and the risk that design wins do not become production orders or revenue at the anticipated levels or timing. The statements also cite the pace of AI data center investment, the rate of adoption of next-generation interconnect speeds, and Semtech’s reliance on Tower for the manufacture of its SiGe-based products, with that manufacturing concentrated in a limited number of facilities, including in Israel.

SiGe Portfolio and the Speed Roadmap

The announcement describes power as AI’s next constraint, with an increasing portion of that power going to moving data instead of computing it. As AI clusters scale across racks, rows and campuses, the per-bit energy cost of moving data increasingly determines how much useful work each accelerator can deliver, the companies said. Each step in the speed roadmap, from 800G to 1.6T and on to 3.2T, increases requirements for bandwidth, reach and power per bit, raising the importance of the high-speed analog front end that drives and receives the signal.

Semtech’s signal integrity portfolio, which includes transimpedance amplifiers (TIAs), modulator and laser drivers, and linear equalizers, is built on Tower’s SiGe process technology. It serves 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 said it believes these products position it to address copper links within the rack and optical links across the data center as the industry moves to its next generation of architectures.

On August 25, 2026, Semtech introduced a family of 224G linear TIA and driver solutions designed for NPO and co-packaged optics (CPO) architectures in AI and machine learning clusters and hyperscale data centers: the GN1838L and GN42T380, which Semtech described as the industry’s first linear octal TIAs, and the GN42M380 linear octal Mach-Zehnder modulator driver, optimized for 1.6T, 3.2T, 6.4T, and 12.8T optical engines. The GN1838L has a 500µm channel pitch and the GN42T380 a 375µm pitch; both include an automatic gain control stage and programmable continuous-time linear equalization. The GN42M380, with a 375µm channel pitch, supports silicon photonics, indium phosphide Mach-Zehnder, and thin-film lithium niobate modulators.

On September 21, 2026, Semtech announced its membership in the eXtra-dense Pluggable Optics Multi-Source Agreement (XPO MSA), an industry initiative defining a 12.8T high-density optical transceiver form factor for AI infrastructure. Under the MSA, the current module generation delivers 12.8T at 200G per lane with integrated liquid cooling, and a future generation is mapped to 400G-per-lane electrical interfaces.

Semtech said its 200G-per-lane modulator driver and TIA portfolio, which includes quad and octal TIAs with 750µm, 500µm, and 375µm channel pitches and Mach-Zehnder modulator drivers with 625µm and 375µm pitches, is designed to support XPO transceiver development and volume deployment. In the same release, Scott Wilkinson, lead analyst for optical components at Cignal AI, projected demand for datacom optics to grow from $9 billion in 2024 to an estimated $37 billion in 2026.

ECOC Award and Executive Statements

Semtech received the Optical Component Innovation (Chip/Wafer) award at the European Conference on Optical Communication (ECOC) 2026, held September 21–23, 2026, in Málaga, Spain, for its 224 Gbps-per-lane TIA family for linear pluggable optics, built on Tower’s SiGe technology. The companies said they continue to work closely on capacity and on a joint technology roadmap described as designed to secure product leadership in multi-generational AI data center interconnects.

Hong Hou, Semtech’s president and chief executive officer, said Semtech’s customers are expanding interconnect bandwidth rapidly and at massive scale, and that serving that demand calls for long-term capacity planning and committed manufacturing partners. The agreement, Hou said, “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.”

Russell Ellwanger, Tower Semiconductor’s chief executive officer, said the companies are driving platform-level solutions that deliver what he called best-in-class figures of merit across present-generation, next-generation and N+2 technologies, and that those solutions are being qualified well ahead of market need. He said the partnership is ensuring continual expansion of what he described as the companies’ already leading market share in optical transceiver connectivity.