Shares in French semiconductor materials supplier Soitec climbed more than 8% on Wednesday after the company reported first-quarter revenue that exceeded market expectations, citing strong orders for its specialised silicon wafers used in artificial intelligence and 5G telecommunications chips.
The Grenoble-based firm posted quarterly revenue of €297 million, up 22% year-on-year and ahead of the consensus estimate of around €280 million. Soitec said demand for its silicon-on-insulator (SOI) and gallium-nitride-on-silicon substrates remained robust, particularly from customers producing radio-frequency chips for smartphones and power-efficient processors for AI data centres.
The positive read-across lifted shares of UK-listed semiconductor companies. IQE, the Cardiff-based wafer supplier, rose 3.2% by midday, while the Scottish Mortgage Investment Trust, which holds a significant position in chip designer Arm Holdings, added 1.5%. The FTSE 100 edged up 0.3% to 8,412 points, with the technology sector outperforming the broader market.
Analysts at Berenberg noted that Soitec's results underscore the structural growth in chip demand driven by AI and the rollout of 5G networks. 'The supply chain for advanced substrates remains tight, and Soitec is well positioned to capture that growth,' they said in a note. For UK investors, the rally highlights the interconnected nature of global semiconductor markets, where a single earnings beat can ripple through London-listed tech stocks.
The move also comes amid broader optimism about the chip sector, with the Philadelphia Semiconductor Index hitting a record high overnight on hopes that AI-related capital spending will remain elevated. UK pension funds with exposure to global technology equities via tracker funds may see a modest boost, though analysts caution that valuations in the sector remain elevated.