IQE plc (AIM: IQE) and Tower Semiconductor (NASDAQ/TASE: TSEM) announced a multi-year agreement for the supply of Indium Phosphide epiwafers to support optical connectivity solutions for AI-driven data center infrastructure.

Under the agreement, IQE will supply InP epiwafers for Tower's silicon photonics platforms used in next-generation optical technologies. The collaboration includes technology for 200Gbs/lane pluggable transceivers and prototyping of 400Gb/lane modulators, along with optical-circuit-switches for datacenter deployment.

The agreement includes a minimum purchase commitment by Tower in the first year, a reciprocal supply commitment from IQE, and minimum volume commitments in subsequent years.

The companies also reached a separate agreement resolving their intellectual property dispute. Tower will provide IQE with a worldwide, royalty-free license for porous silicon patents that were subject to litigation between the companies, settling all related disputes.

"This agreement reinforces IQE's position within Tier 1 global hyperscale cloud and AI infrastructure markets," said Jutta Meier, Chief Executive Officer of IQE. "With decades of InP epitaxy expertise and established high-volume manufacturing capability, IQE is primed to support next-generation optical connectivity applications as they scale from innovation to commercial deployment."

Dr. Marco Racanelli, President of Tower Semiconductor, said the partnership will enable products delivering both performance and high volumes required to scale future AI infrastructure capacity.

The information is based on a press release statement from the companies dated June 15, 2026.