Semtech is paying to lock up silicon germanium capacity at Tower Semiconductor, extending a manufacturing partnership that has run for two decades into a multi-year supply commitment.
The agreement was announced October 13. Semtech will invest to secure dedicated capacity across Tower’s fab network, covering plants in the United States, Israel and Japan, to support what both firms call strong design wins in AI data center interconnect.
Silicon germanium is the material behind the high-speed analog front end that drives and receives signals in optical links. Tower builds the process, Semtech designs the transimpedance amplifiers, laser drivers and linear equalizers that sit on top of it.
Power is the new wall
The two companies frame the deal around energy rather than speed. As clusters scale across racks, rows and campuses, a growing share of the power budget goes to moving data instead of computing it. Every step up the speed ladder, from 800G to 1.6T and toward 3.2T, raises the performance demanded of the analog circuitry that drives each bit.
Semtech’s parts feed fully retimed optics, linear pluggable and linear receive optics, near-packaged optics and active copper cables, spanning links inside a rack and optical runs across a data center.
Tower has been expanding capacity for photonics and analog work, including a planned push in Japan. The company recently won a European optical communications award for a 224 gigabit per lane amplifier family built on its silicon germanium process.
