September 2, 2026 / SemiMedia / — French semiconductor materials maker Soitec is signing multi-year supply agreements with customers using fixed pricing and deposit requirements as demand surges for silicon photonics wafers used in AI data centers.

CEO Laurent Remont said Soitec expects Photonics-SOI revenue to more than double from just above $100 million this financial year, with revenue exceeding $200 million. He described the $200 million level as an “absolute floor” for the business.

Demand for silicon photonics is accelerating as hyperscale data centers increasingly use optical connections to move data within AI infrastructure. Optical links can provide higher bandwidth with lower power requirements than traditional copper connections. Soitec supplies SOI substrates used in silicon photonics chips and holds an estimated 95% share of the market, according to UBS.

Remont said about 80% of Soitec's planned capacity reservation agreements with photonics customers are expected to be signed within one or two weeks, with the remaining agreements expected within a month.

The contracts set pricing in advance and require customers to pay deposits linked to committed demand. Customers that meet their agreed volumes receive the deposits back, while those that fall short risk losing them. Volumes above the agreed level trigger new price negotiations.

Customers are also required to share inventory data with Soitec, a measure intended to discourage overbooking capacity and help ensure wafers remain available for actual demand.

Despite the rapid increase in orders, Soitec does not expect to require a new fab until around 2029. The company plans to increase output by reallocating unused capacity across its operations and installing additional equipment in existing cleanroom space.

Remont said those measures should comfortably cover demand this year and next year, allowing Soitec to increase capacity more quickly without immediately constructing a new wafer fab.