Soitec shares rose from about €23 at the start of January to roughly €154 in Paris on Monday afternoon, a gain of almost sevenfold in 2026, even as the French semiconductor company reported a 34% annual revenue decline. Bank of America upgraded the stock from Neutral to Buy on Friday, lifting its price target from €152 to €300. That points to more than 90% upside from the price cited in its analysis.
French Manufacturing, AI Demand
Soitec makes engineered silicon wafers used by other semiconductor companies to build chips. It doesn't manufacture the processors that train AI models. Based in Bernin near Grenoble, the company employs more than 2,000 people and holds more than 4,700 patents. French research institute CEA-Leti spun it out in 1992.
Euronews journalist Valérie Gauriat visited Soitec's production facilities earlier this month for the Made in Europe series. Inside the clean rooms, silicon wafers move 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.
Soitec supplies specialised silicon wafers for silicon photonics chips. The technology connects processors with light rather than electrical signals, offering a faster, more energy-efficient alternative to traditional copper connections. Bank of America analyst Oliver Wong and his colleagues said, “We estimate that Soitec currently holds ~95% market share in supplying Photonics-SOI wafers.”
Forecast Growth, Weaker Smartphone Sales
Competitors, including Taiwan's GlobalWafers, are trying to enter the photonics wafer market. Bank of America expects Soitec's technological expertise and manufacturing experience to defend its position, and estimates the wafer area required for photonic chips will grow by approximately 60% annually between 2026 and 2030.
In September, Soitec projected that photonics revenue in 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, which could make future demand more predictable and support investment in production capacity.
Smartphones accounted for roughly half of Soitec's revenue last fiscal year. In the June quarter, its broader Edge & Cloud AI division generated 57% of sales. Bank of America projects photonics revenue will climb from €92 million in fiscal 2026 to approximately €680 million in fiscal 2029. That would make up almost half of projected group revenue of €1.43 billion, compared with 16% last fiscal year.
Soitec's annual revenue dropped 34% to €592 million in fiscal 2026, while mobile communications sales plunged 43%. The smartphone division shrank 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, but cautions that a recovery isn't guaranteed.
Margins, Valuation and Upcoming Results
Bank of America estimates photonics wafers retain about 80 cents per euro of sales after raw material costs, versus 56 cents for Soitec's other products. The bank expects Soitec's gross profit margin to climb from 16% to 44% by fiscal 2029. “We believe FY26 gross margin of 16% marked the trough for Soitec,” Wong and his colleagues said. Bank of America forecasts fiscal 2029 earnings per share of €10.62, approximately 71% above the Visible Alpha analyst consensus.
Bank of America expects Soitec to announce an extension of its Singapore manufacturing plant in the coming months, potentially costing around €700 million. At approximately €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. Soitec will publish first-half results on 18 November.