Soitec shares have climbed almost sevenfold in 2026, even as the French semiconductor company reported a 34% drop in annual revenue to €592 million. Investors are betting on a sharp reversal. On Friday, Bank of America upgraded the stock from Neutral to Buy and lifted its target from €152 to €300, implying more than 90% upside from the price it cited.
Soitec makes materials for other companies’ chips, not the processors used to train AI models. Based in Bernin near Grenoble, the company produces engineered silicon wafers; its shares reached roughly €154 in Paris on Monday afternoon. Its fortunes now depend on whether expected demand for one specialised product can outpace a steep decline in its established smartphone business.
The market’s wager
Soitec supplies specialised wafers used to manufacture silicon photonics chips. These chips use light, rather than electrical signals, to connect processors, providing a faster, more energy-efficient alternative to traditional copper connections. Bank of America analyst Oliver Wong and colleagues estimate that Soitec holds about 95% of the market for Photonics-SOI wafers.
Competitors, including Taiwan’s GlobalWafers, are trying to enter the market. Bank of America expects Soitec’s technological expertise and decades of manufacturing experience to defend its position. The bank estimates that wafer area needed for photonic chips will expand by approximately 60% annually between 2026 and 2030. Those figures are forecasts, not orders already delivered.
In September, Soitec projected that photonics revenue for the financial year ending March 2027 would reach between 2.5 and three times the previous year’s level. The company also forecast approximately 50% growth in total revenue for the September quarter. It expects multi-year capacity agreements with eight of its roughly ten largest photonics customers. Such deals could make future demand more predictable and support investment in production capacity.
Bank of America projects photonics revenue will rise from €92 million in fiscal 2026 to approximately €680 million in fiscal 2029, almost half of the group’s projected €1.43 billion in revenue. Photonics accounted for 16% of revenue last fiscal year. The bank estimates those wafers retain about 80 cents of each euro in sales after raw material costs, compared with 56 cents for Soitec’s other products. It forecasts gross profit margin will rise from 16% to 44% by fiscal 2029. “We believe FY26 gross margin of 16% marked the trough for Soitec,” Wong and his colleagues said.
The weak side of the ledger
The smartphone industry accounted for roughly half of Soitec’s revenue last fiscal year. Mobile communications sales plunged 43% in fiscal 2026, while the smartphone division contracted another 10% in the June quarter as customers cut inventories. Bank of America expects the mobile business to hit its lowest point this fiscal year, though a recovery isn’t guaranteed.
Soitec employs more than 2,000 people and holds more than 4,700 patents. In its clean rooms, silicon wafers pass through dozens of manufacturing stages as the company manipulates very thin layers of material. “Our job is to run faster than the competition,” Chief Technology Officer Christophe Maleville told Euronews.
Bank of America expects Soitec to announce an extension of its Singapore manufacturing plant in the coming months, potentially at a cost of around €700 million. At roughly €154 per share, the stock trades at nearly 96 times the bank’s projected earnings for the financial year ending March 2027. Investors could be vulnerable if AI infrastructure spending slows or competing technologies gain ground.
Bank of America forecasts fiscal 2029 earnings per share of €10.62, approximately 71% above the Visible Alpha analyst consensus. Soitec is scheduled to publish first-half results on 18 November. The share-price surge is the present fact; the growth story remains a forecast, tied to production plans, customer agreements and a market where competitors are already trying to get in.