Tower Semiconductor And Semtech Expand Multi-Year Agreement With SMTC Investing Dedicated Silicon Germanium Capacity At Tower

Tower Semiconductor (Nasdaq/TASE: TSEM), the leading foundry for high-value analog semiconductor solutions, and Semtech Corporation (NASDAQ:SMTC), a leading provider of high-performance semiconductors powering AI data center networking and intelligent, connected Internet of Things ("IoT") devices worldwide, today announced an expanded multi-year agreement that builds on the companies’ 20-year partnership. Under the agreement, Semtech will invest in securing dedicated silicon germanium (SiGe) capacity at Tower in support of its strong design winsand demand for AI Data Center optical interconnectcomponents.

AI’s next constraint is power, and 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. 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.

Semtech’s signal integrity portfolio, including transimpedance amplifiers (TIAs), modulator and laser drivers and linear equalizers, is built on Tower’s SiGe process technology and servesfully 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.

A testament to the results of the partnership is Semtech’s recent 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 built on Tower’s leading-edge SiGe technology. Tower and Semtech continue to work closely not only on capacity but also on joint technology roadmap designed to secure product leadership in multi-generational AI data center interconnects.

The secured capacity spans Tower’s fabs in the United States, Israel and Japan, adding 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.