Tower Semiconductor (TSEM.US) and Senke Electronics (SMTC.US) expand cooperation to lock silicon germanium production capacity connected to AI data centers

The Zhitong Finance App learned that Tower Semiconductor (TSEM.US) and Xianke Electronics (SMTC.US) announced that they will expand their 20-year partnership through a multi-year agreement to lock in dedicated silicon-germanium manufacturing capacity for AI data center connection products.

Under the agreement, Senke Electronics will invest in Tower Semiconductors' dedicated production capacity at fabs in the US, Israel, and Japan to support its optical and copper interconnect component requirements. The two sides will also cooperate to develop next-generation data center connectivity technologies, including 800G, 1.6T, and 3.2T.

The two companies said in a statement that as AI clusters expand from racks and rack rows to a campus-level scale, data transmission energy consumption is becoming a key factor limiting AI expansion. The rate was upgraded from 800G to 1.6T and 3.2T, which placed higher demands on bandwidth, transmission distance, and power consumption per bit, and also increased the importance of high-speed analog front-ends. Hong Hou, CEO of Semtech, said that connectivity has become a key factor in the ability of AI systems to expand, and customers are increasing interconnection bandwidth on a large scale, so long-term capacity planning is required.

Before the US stock market on Tuesday, as of press release, Tower Semiconductor had risen 2%, while Xianke Electronics had dropped more than 3%.