BofA raised Soitec to €300 on photonics; GlobalFoundries named it a partner on a $1 billion chip platform
GlobalFoundries named Soitec, alongside CEA-Leti, as a substrate partner for its roughly $1 billion FDX Fusion program on October 9, the same day BofA Securities upgraded the stock to Buy at €300 on a silicon-photonics case. The new FD-SOI wafer demand reaches a Dresden fab in 2028, and only if Berlin approves.
Vincent Jiang · 3 min read
Dresden's new platform sits on a French pilot line
GlobalFoundries−2.43% — GlobalFoundries, down 2.43 percent today topped out its €1.1 billion Dresden expansion on October 9, 2026, and unveiled FDX Fusion, a next-generation fully depleted silicon-on-insulator platform for what it calls physical AI, with manufacturing there from 2028 12. The substrate is being developed with CEA-Leti and Soitec+4.95% — Soitec, up 4.95 percent today on a pilot line in France, a strained 70-angstrom silicon film meant to lift electron mobility about 25%; GlobalFoundries expects to spend roughly $1 billion on the platform, $250 million of it on the first toolset 3.
BofA's €300 case is built on light, not Dresden
The upgrade that moved the stock argues a different business. BofA Securities raised Soitec to Buy from Neutral and its target to €300 from €152, citing a 90%-plus share of the key material in silicon photonics, and models photonics wafer revenue growth of 172%, 74% and 57% across fiscal 2027 to 2029, on take-or-pay contracts with major customers 4. Soitec guided in September to photonics wafer growth of 2.5 to 3 times in the fiscal year ending March 31, 2027 4.
The shares rose 7.25% to €163.45, a 269% one-year gain, at roughly 206.5 times consensus current-year earnings 5. The base underneath is thin: fiscal 2026 revenue of €592 million and a 16% gross margin 6. BofA's route to €300 runs through gross margin, forecast at 29%, 39% and 44% over three years 4.
BofA's €300 case asks Soitec to nearly triple its gross margin by fiscal 2029
- Gross margin
- Estimate
Data
| Gross margin | |
|---|---|
| FY2026 | 16% |
| FY2027 (estimate) | 29% |
| FY2028 (estimate) | 39% |
| FY2029 (estimate) | 44% |
BofA's €300 target clears Soitec's convertible strike; the shares don't
- Estimate
Data
| Value | |
|---|---|
| Share price, 9 Oct | €163.45 |
| Convertible strike | €206.46 |
| BofA target (estimate) | €300 |
The FD-SOI leg is dated 2028 and conditional on Berlin
FDX Fusion is the leg the €300 case leaves out; the rationale as reported names no role for it 4. GlobalFoundries' own release quotes BMW, Bosch, CEA-Leti, Infineon, NXP−1.50% — NXP, down 1.50 percent today, Siemens and Tesla+2.08% — Tesla, up 2.08 percent today, and names no wafer supplier 2. Soitec's part runs through Manfred Horstmann, who runs GlobalFoundries' European fabs and described the pilot line 3. No public document sizes what the program would add to Soitec's revenue.
Demonstrator silicon is due for customer evaluation in early 2027, a first process design kit in mid-2027 2. GlobalFoundries puts the platform's serviceable market above $18 billion by 2030, a company estimate 7. Development is to proceed through the IPCEI Advanced Semiconductor Technologies program, subject to German federal government approval, and the start of work is contingent on it 18.
Someone sold below 5% on the way up
The re-rating has not cleared everyone out. JP Morgan Chase & Co. told the AMF it fell below 5% of Soitec's capital on September 30 through a market sale, leaving 1,702,796 shares, 4.75% of capital and 3.80% of voting rights 9. The €500 million convertible issued on September 18 carries a 0.50% coupon and converts at €206.46, about 26% above the October 9 price 10.
Two gates decide it: Berlin, then 2027 silicon
Watch German approval of the IPCEI program, then demonstrator silicon in early 2027. Until then photonics carries the multiple, and the convertible strike marks where committed money sits. The re-rating is a photonics story; the FD-SOI sequel waits on Berlin and arrives in 2028.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
