After Years of Legal Disputes, IQE and Tower Join Forces in AI Photonics

16 June, 2026

Four years after a trade-secret lawsuit, IQE and Tower Semiconductor have signed a long-term indium phosphide supply agreement targeting optical networking, data centers, and AI

UK-based materials company IQE and Israeli chipmaker Tower Semiconductor have announced a long-term supply agreement covering indium phosphide (InP) epitaxial wafers, a key technology used to manufacture photonic components for optical networking, data centers, and artificial intelligence applications.

Under the agreement, IQE will supply Tower with InP-based epitaxial wafers used in the production of lasers, photodetectors, and other advanced optical devices. Tower plans to integrate these materials into its photonics manufacturing processes, which serve customers in optical communications and AI-related markets.

The announcement is particularly noteworthy given the companies’ contentious legal history.

In 2022, IQE filed a federal lawsuit in the United States accusing Tower of misappropriating trade secrets and proprietary know-how related to porous silicon technology, which enables advanced integration of electronic and photonic components on silicon substrates.

According to the complaint, IQE alleged that it had shared sensitive technical information with Tower during discussions about a potential collaboration under confidentiality agreements. The company claimed that Tower later filed patent applications that incorporated knowledge disclosed during those discussions. IQE sought damages and asked the court to review the inventorship of certain patents involved in the dispute.

Tower consistently denied the allegations, arguing that its patents had been developed independently and that the claims lacked merit. Legal proceedings continued for several years, but no final court ruling was issued publicly determining the validity of either side’s claims.

Against that backdrop, the new partnership suggests that both companies have moved beyond the dispute and are now focusing on the commercial opportunities emerging in the rapidly growing photonics market.

Indium phosphide has become one of the semiconductor industry’s most strategically important materials in recent years. It is widely used in high-performance lasers and optical interconnects that enable high-speed data transmission between AI processors inside modern data centers. As AI workloads continue to expand, demand for optical networking infrastructure has surged, driving increased investment across the photonics supply chain.

For IQE, the agreement secures a strategic long-term customer and a stable source of revenue in a fast-growing market. For Tower, it provides reliable access to advanced photonic materials needed to expand its position in optical communications and AI-related applications.

While neither company has presented the agreement as a formal legal settlement, the joint announcement marks a clear shift in their relationship. After four years of public litigation, IQE and Tower are now collaborating in one of the semiconductor industry’s fastest-growing sectors, turning a dispute over intellectual property into a partnership centered on the AI-driven photonics boom.

Share via Whatsapp

Posted in: News

Other articles you might like

Intel Israel and Microsoft Remove a Key Limitation in Secure Cloud Computing

Smart Shooter Wants to Turn the Infantry Soldier Into an AI Platform

BIRD Foundation Awards $7.5 Million to U.S.-Israel Projects in AI, Cybersecurity and Healthcare