Tower Semiconductor and Semtech Corporation have announced an expanded multi-year agreement under which Semtech will invest in securing dedicated silicon germanium (SiGe) capacity at Tower, deepening a manufacturing relationship that spans two decades.

A 20-Year Partnership Enters Its Next Phase

The announcement, made jointly by Migdal Haemek, Israel, and Camarillo, California, builds on the companies' 20-year partnership and is aimed at supporting Semtech's design wins and growing demand for AI data center optical interconnect components.

Tower Semiconductor, traded on Nasdaq and the Tel Aviv Stock Exchange under the ticker TSEM, describes itself as the leading foundry for high-value analog semiconductor solutions. Semtech, a Nasdaq-listed company under the ticker SMTC, is a provider of high-performance semiconductors powering AI data center networking and intelligent, connected Internet of Things devices worldwide.

The secured capacity spans Tower's fabs in the United States, Israel and Japan. According to the companies, this adds 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.

Power as AI's Next Constraint

The companies framed the expanded agreement against a backdrop of shifting bottlenecks in AI infrastructure. The parties stated that AI's next constraint is power, and that 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, according to the statement.

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. This context underpins the value both companies place on SiGe process technology, which serves as the foundation for Semtech's signal integrity portfolio.

Signal Integrity Portfolio Built on Tower's SiGe

Semtech's signal integrity portfolio includes transimpedance amplifiers (TIAs), modulator and laser drivers, and linear equalizers, all built on Tower's SiGe process technology.

The portfolio serves a range of interconnect architectures: 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 believes that, together, 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.

ECOC 2026 Recognition Highlights the Partnership's Track Record

The companies point to recent industry recognition as evidence of the partnership's results. Semtech received the Optical Component Innovation (Chip/Wafer) award at the European Conference on Optical Communication (ECOC) 2026. The award recognizes Semtech's 224 Gbps per Lane TIA Family for linear pluggable optics, which was built on Tower's leading-edge SiGe technology.

Beyond capacity, Tower and Semtech continue to work closely on a joint technology roadmap designed to secure product leadership in multi-generational AI data center interconnects.

Executives Point to Long-Term Capacity Planning

Hong Hou, Semtech's President and Chief Executive Officer, said that connectivity is now a primary factor in how far AI systems can scale. "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," Hou said. He added that Tower has been a trusted partner to Semtech for 20 years and expressed satisfaction with the agreement securing 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, Chief Executive Officer of Tower Semiconductor, said it is a source of profound satisfaction that the partnership with Semtech has grown so strong. "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," Ellwanger said.

He emphasized that by qualifying these solutions well ahead of market need, both companies stand fully prepared for immediate implementation as the market moves into these generations.

Ellwanger further stated that in doing so, the companies are key drivers of the technologies carrying the market forward, ensuring a continual expansion of Tower's already leading market share in optical transceiver connectivity within this high-growth market.

Tower's Global Manufacturing Footprint

The dedicated capacity draws on Tower's fab network, which currently includes one operating facility in Israel (200mm), two in the United States (200mm), and two in Japan (200mm and 300mm) owned through its 51% holdings in TPSCo.

Tower also shares a 300mm facility in Agrate, Italy, with STMicroelectronics. The company offers a broad range of customizable process platforms beyond SiGe, including SiPho, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, non-imaging sensors, displays, and integrated power management (BCD and 700V), and serves markets including consumer, industrial, automotive, mobile, infrastructure, medical and aerospace and defense.

Stay Ahead of the Silicon Curve: Track Semiconductor Projects Before They Break Ground

In an industry where a single fabrication plant can represent a billion-dollar investment, timing is everything. Whether you supply equipment, materials, or engineering services to the semiconductor ecosystem, knowing which fabs, packaging facilities, and R&D campuses are moving from blueprint to construction gives you the edge competitors lack.

The Global Project Tracking (GPT) platform by Blackridge Research delivers real-time intelligence on semiconductor capital projects across markets worldwide, from megafab announcements to cleanroom expansions and advanced packaging hubs.

Every tracked project is enriched with details that matter: project scope, investment value, development stage, and key stakeholders driving procurement decisions.

• Upcoming Projects

• Tender Notices

• Contract Awards

• Projects Under Construction

• Completed Projects

Book a free demo today and see how the Global Project Tracking (GPT) platform by Blackridge Research can sharpen your semiconductor market strategy.