Shares in IQE rose as much as 10% in early London trade after the semiconductor company unveiled a new partnership to develop commercial quantum dot wafer supply chains for AI optical interconnects.

The Cardiff-based business said the partnership with Quintessent, a California-based optical connectivity solutions business, had been backed by an initial purchase order of $0.5m for delivery of production wafers to Quintessent through 2025.

IQE said the technology was a “critical innovation for future AI infrastructure which offer superior performance, including extended lifetimes, improved efficiency, lower noise and greater resilience to environmental fluctuations.”

“The rapid expansion of AI-driven applications has placed significant requirement in data centres power consumption driving the migration from copper chip to chip connectivity to Silicon Photonics. This has created an increasing demand for high-bandwidth, low-latency, energy-efficient and highly reliable optical interconnects.”

Alan Liu, CEO and co-founder of Quintessent, said: “The performance, cost, and reliability advantages that quantum dot-based lasers and amplifiers enable over their quantum well counterparts are exactly what our customers are demanding to address the soaring need for optical connectivity in AI driven compute.

“Through our partnership with IQE, we have brought this transformative technology to scale, positioning us to be the leader in delivering solutions leveraging quantum dot laser and SOA technology.”

It comes after IQE edged a step closer to preparing for the IPO of its Taiwan subsidiary.

The semiconductor business said it had seen “a very positive reaction from its first round of engagement with investors” after it unveiled plans in July for the flotation of its Taiwan operations on the Taiwan Stock Exchange.

IQE said it intends to proceed with the IPO and expects to list on the Emerging Market Board of the TSE in the first six months of next year.

IQE shares remain down by around a third over the past year.

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