Hello and welcome to the Soitec Q3 2025 revenue call. Today's event is being recorded. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. I will now hand you over to Pierre Barnabé, CEO, to begin today's conference. Please go ahead.
Welcome to Soitec's conference call dedicated to the publication of the third quarter revenue for fiscal year 2025. This is a quarter covering the period from October to December 2024. I'm Pierre Barnabé, Soitec CEO. Together with me on this call are Léa Alzingre, our CFO, and Steve Babureck, our EVP Strategy. As usual, we will start with a few comments on our figures, and after that, we will open the floor to questions. After the strong rebound we achieved in Q2 2025, we maintained our Q3 revenue roughly in line on a sequential basis, down 6% year on year. Our Mobile Communications division resumed growth on a year-on-year basis, a much better performance than in the previous quarter. This illustrates some seasonal restocking in our RF-SOI across value chain and a continued strong traction in POI for smartphone filters.
Conversely, our Automotive & Industrial divisions continue to be impacted by the weak automotive market. In Edge & Cloud AI, the momentum remained strong in cloud infrastructure, as well as in AI-driven IoT applications. That dynamic is punctually offset by a low performance in Imagers, as we are about to phase out our product next year. Sales have hence been highly concentrated in Q1. Overall, our Q3 2025 revenue amounted to €226 million, a 6% year-on-year decline, which breaks down between a 10% decline on an organic basis, a positive currency impact of 5%, and a small negative scope effect of minus one, which is related to the disposal of Dolphin Design's mixed signal activities in early November. Let's now have a look at our Q3 revenue by end market, starting with mobile communication.
Our division was back to growth in Q3 2025, leveraging the progressive recovery in the smartphone market, some seasonal RF-SOI restocking, and the continued strength in POI. EUR 154 million revenue was up 11% year on year. RF-SOI inventories across the overall supply chain are trending down overall, but some customers continue to optimize RF-SOI inventory level based on seasonality and market conditions, which will keep driving fluctuations over the next few quarters. We are confident that we will achieve strong growth in RF-SOI in Q4 2025. In the meantime, we continue to leverage our state-of-the-art R&D capabilities, as well as our strategic relationships across the value chain to bring leading-edge innovative products to market.
In Q1 2025, we announced the extension of our partnerships with UMC to bring to market the industry's first 3D IC solution for RF-SOI technology, a solution that enables the integration of more RF front-end modules into a single device. In December, we announced our commitment to provide GlobalFoundries with our latest generation of RF-SOI 300mm wafers to support the most advanced 9SW platform. As you know, we have a long-standing relationship with GF. GlobalFoundries' 9SW RF-SOI platforms offer significant advantages and value for premium smartphones, with enhanced RF performance, improved power efficiency, and scalability. These features are critical to ensure a superior user experience in high-end devices and evidence the strengthening of our strategic relationships with the key players in our industry. Turning to POI, sales continue to gain traction, increasing quarter after quarter since the beginning of fiscal year 2024.
In Q3, POI wafer sales were significantly higher than in Q2 2025 and Q3 2024, as the adoption of our product continued to accelerate. We now have 10 customers in volume productions and more than 10 others in qualification, and we are engaged with all leading US fabless companies. Finally, Imager-SOI sales were also higher than in Q2 2025 and Q3 2024. Let's switch now to Automotive & Industrial. After a long period of sustained growth, we have been impacted by the weaker automotive market since the beginning of fiscal year 2025. Overall, we continue to see increasing adoption of our products and growing content per car, driven by infotainment, autonomous driving, functional safety, and electrification. Our division revenue reached EUR 25 million, a 47% decline year-on-year, reflecting different dynamics across our product portfolio.
Sales of Power-SOI reached a particularly low level in Q3 2025, as the current weakness of the automotive market is leading to some inventory adjustment at customer level. Going forward, the strong outlook for battery management system support our products' roadmaps towards 300mm. Conversely, automotive FD-SOI sales recorded a year-on-year growth, as FD-SOI continues to be driven by adoption in microcontrollers, radar, and wireless connectivity. We continue to support our foundries and IDM customer design wins on FD-SOI, such as GlobalFoundries on the 22FDX or STMicroelectronics, recently on 18nm adoptions, with production expected by H2 2025. As for SmartSiC, I'm very pleased to announce a fifth customer in qualification. This is a strong testimony of strong market appetite for very innovative products. We continue to deliver a growing number of samples and prototypes to our five customers in qualification and around 35 prospects in evaluation.
The current weakness of the automotive market and the longer-than-initially-anticipated customers' qualification cycles confirm a delay in the expected wafer production ramp-up by around two years, in line with what we already shared in 2024. Beyond the short-term challenges in the automotive market, we remain highly confident that further digitalization and electrification of the automotive industry will drive a rise in semiconductor content in the new generations of vehicles. Finally, we recorded a mixed performance in Edge & Cloud AI linked to seasonality effects. The momentum for Edge & Cloud AI divisions remains very strong, driven by sustained investment in cloud infrastructures across the industry and growing appetite for low-power computing devices and edge AI applications. The division revenue, down 30% year-on-year at EUR 45 million, reflects a strong seasonality effect and mixed performance across our product portfolio.
Photonics-SOI wafers continue on their high-growth trajectory, with revenue much stronger than in Q2 2025 and significantly higher than in Q3 2024. We are addressing the industry's requirements for new data centers architectures with better performance, lower energy consumption, and lower cost. We are accelerating our partnerships with leading-edge fabless to support AI machine learning developments, and we are benefiting from high investment across the AI value chain as key industry players accelerate their co-packaged optics roadmaps. Photonics-SOI enables new data center architectures with better performance, energy consumption, and lower cost, a critical challenge for the artificial intelligence value chain. Photonics-SOI is becoming a standard for high-speed and high-bandwidth optical interconnections in data centers. There is no new AI data centers without Soitec technology. Sales of FD-SOI wafers remained as strong as in Q2 2025, but were lower than Q3 2024.
FD-SOI technology is a key enabler for AI-driven devices, both in the consumer and the industrial sector, with IoT applications requiring ultra-low-power edge computing. Finally, sales of Imager-SOI wafers remain lumpy from one quarter to the next, dragging the division's performance in Q3 2025. In fiscal year 2025, the phasing of sales was very much concentrated in Q1, whereas last year they were mostly recorded in H2 2024. That summarizes our Q3 2025 performance. On a nine-month basis, our revenue came at EUR 564 million, down 12% year-on-year. Turning now to our fiscal year 2025 outlook, we continue to expect a strong recovery in Q4 2025, supported by our backlog, a progressive recovery in the mobile market, a seasonal restocking in RF-SOI, and continued traction in both POI and Photonics-SOI.
However, in the context of the ongoing weakness in the automotive and consumer markets, a couple of customers have asked us to put deliveries on hold, which impacted our Q3 and will impact our Q4 2025, as we are rigorous in matching our deliveries with customer requirements. As a result, we are revising our fiscal year 2025 revenue outlook to a high single-digit percentage decline compared to flat previously at constant exchange rate and perimeter. As a result, fiscal year 2025 EBITDA margin is now expected to be between 32%-34% of revenue, and we continue to be very disciplined on cost control to preserve our margin and enable our investment in R&D. Capital expenditures will be around EUR 230 million in line with what we shared in November, reflecting a more moderated recovery in SOI and SmartSiC. Let's have a few words on fiscal year 2026.
For calendar year 2025, we continue to anticipate different dynamics across our three end markets. The mobile communication market is anticipated to see gradual improvement. The weakness in the automotive market is likely to persist through the first half of the year, and investment in cloud AI infrastructures are expected to stay at high levels. With the lack of visibility on our end markets for now, it is also too early to provide specific guidance for fiscal year 2026. Given current market conditions, we expect fiscal year 2026 growth to be quite limited at this stage. Our fundamentals remain solid, and we allow us to accelerate as end markets recover.
In the context of these temporary challenging market conditions, we continue to enhance our technology leadership everywhere, to strengthen our SOI positioning with both existing and a lot of new customers, to deploy our expansion into compound semiconductors with the acceleration of POI volumes and a fifth customer's qualification on SmartSiC, and to carefully manage our profitability and cash generation profile. This ends my opening remarks. Thank you for your attention. We are now ready to take your questions.
Thank you. Ladies and gentlemen, if you would like to ask a question on today's call, please signal by pressing star one on your telephone keypad. That is star one for your questions today. And up first, we have Emmanuel Matot from ODDO BHF. Please go ahead.
Hello. Emmanuel Matot from ODDO BHF. I hope you can hear me well.
Yeah, yeah. Hello, Emmanuel. We hear you very well. Loud and clear.
First, Pierre, you are talking about limited sales growth for fiscal year 2026. Could you give us some colors by division? It is disappointing for me knowing that your main division, mobile com, I was expecting it to grow double-digit given that the smartphone market looks healthy, that RF-SOI, I think, should be essentially behind us, and that customer diversification is a success in POI. So why no more growth than just limited, what you said, for next year? Second, are the difficulties only due to the current uncertain macro environment, or is Soitec experiencing specific problems with its technologies? And as a result of these difficulties, are you planning to reduce your R&D efforts and your CapEx budget next year? And if we can have also a word about your new customer for Silicon Carbide for the SmartSiC, is it a key player in this segment of business?
Thank you.
Thank you, Emmanuel. Then, on your first question regarding fiscal year 2026 preview per division, I will recall what I already said on November on the market dynamics, and that is reflecting this preview for fiscal year 2026. First of all, the mobile market is under recovery, but still low level of growth. First point. Second point, privileging more mid-range, low-range smartphones. And as you know, we are getting a higher footprint in high-end, let's say, smartphones, and this segment is more suffering, even in more negative territories as it is today. That's the first point. The second point is that our content growth is more expected in the range of 4%-5%. Nothing to compare to the 15% we were expecting a few years ago because of shrinking models, because of a new generation of RF-SOI solution.
Third, what we see is the phenomenon we have observed for a few years now. Then the customers are stocking, replenishing the inventory in their calendar Q1. They are consuming to be sure that they're going to deliver the smartphone on time, and then they replenish in Q1 and so on. This is the same cycle now for a certain amount of time, and we don't see dramatically increasing the consumption rate. Then that's for RF-SOI. Of course, POI is going to grow and going to continue to grow because we have customers. But looking at the observation of RF, that is soft and POI strong, we are cautious on the mobile communication market.
And if you listen to peers, I mean, a lot of players in the value chain, we see softness and uncertainties, and we are reflecting what we hear and what we observe today on the market. If we look at automotive, as we said also in November, H1 calendar is going to be weak, and we see clearly uncertainties in this market. We were even believing a possible rebound in H2. For the moment, it's unclear. There are a lot of big lack of visibility in this market. And it is clear that when you listen again to the peers and to all the players in this market, calendar 2025 is going to be difficult. And we expect this market to decline, and it's going to reflect in our activities this type of trends.
Looking at Edge AI and Cloud AI, Edge AI and Cloud AI continue to grow thanks to Silicon Photonics and FD-SOI to some extent. But we got the confirmation that Imager phase-out is engaged, and Imager, it weighs around 5% of our fiscal year 2025 revenue. That means that, of course, we will have to compensate this loss by a big growth in Silicon Photonics and FD-SOI. Silicon Photonics strong growth is confirmed, and we have more and more traction, that's for sure. This is really by the combination of market trends and the prospect on what we see. We are looking at market uncertainties and lack of visibility that is obvious everywhere. We are looking at this limited growth prospect for fiscal year 2026, but of course, we'll come back to you more precisely with more flavor and more details on May.
On your second, okay, I actually want to comment, yeah, of course.
Yes, maybe I can take the second question. Good morning, Emmanuel. Regarding the R&D and the CapEx for next year, we are going to continue to invest in R&D. This is very important for us to prepare for the future, both on our SOI product to prepare the next generation, to improve the cost for product, and also to work on new products, new technology for new markets. Of course, we will adapt also at the level of the revenue. We want to protect margins. We are going to continue to invest, but keeping in mind our profitability and also our cash flow. We'll adapt our CapEx plan definitely based on the visibility we'll have on customer demand. We are going to continue to invest for POI. We are seeing big traction.
And for the other technology, we'll see depending on customer visibility as we have always done.
Then we will really drastically adapt CapEx on the business needs. And of course, on R&D, we are keeping a very strong path. 10%-11% of our revenue is going to be invested in R&D in many domains. We'll come back on it, but you know that we have launched some incubators to prepare the ground for next-generation products that are on sale. There was also a question in between you asked, and I would like to come back on it, is on the. Is there any specific problem in the? I want to be super clear on it. There is no intrinsic or, I would like to say, in-depth problem in this company, okay? Are we losing market share? No. We are not losing market share. Well, we are already, okay?
Are we gaining market share? Yes. We are gaining market share in the new products we are launching. We have never been so diversified. Hopefully. Hopefully. And again, in the $400 million club, we have four products today. We expect, as I say, the fifth one as soon as possible. And you know that the candidate is Silicon Photonics to come. Do we have any problems in quality? No. Do we have any problems with customers? No. From some blacklisted customers a few years ago, today, we have strong relationships, strong contacts with customers at the highest level. And also, we are extremely attached to respect customers' reasons. And you know we had two orders put on hold by a couple of customers, okay?
Suddenly, they came to us to say, "Guys, there is a contract, but we cannot honor this contract because we don't need looking at uncertainties and difficulties of the market, the orders, because we don't need for the moment this product." They put on hold for further notice. We could have forced it. We could have asked, "Okay, execute the contract now." I believe we need to respect. And also, we are building long-term relationships with our customers. You know the fact that we have announced the 9SW with GlobalFoundries, the 3D packaging on RF with UMC. And you know how these guys are discreet in communicating particularly with suppliers. They have accepted to do it, and you will have other news flows to come because they consider us as very reliable and strong partners, technology-wise, business-wise, competence-wise.
It's very important to keep in mind that if you look at the fundamentals of this company, they are intact in terms of positions, technological leaderships, competence of the people we are reinforcing, quality of our relationships with our customers, and also strength of our balance sheet. When the markets will get back on track and when we will get win in the sale, I can tell you that we have all the foundations to make strong growth coming through. That's very important to compare to it. There is no, and of course, you can check, Emmanuel. You can call any customers, any people you want to check. There is no interesting problem with this company. The fundamentals are very strong for the growth story in the coming five years to come. It's a very strong conviction I have with all the team.
We stabilized the governance totally. We diversified like never. Now we have to navigate in uncertain geopolitics and lack of visibility markets. That's it, and we'll do it by keeping high level of disciplines on cost management and profitability management to be sure we continue to finance our R&D, the needed CapEx we're going to adapt, and to generate cash for the future. That's really extremely important to recall it with strength. On the new SmartSiC customers, this is, of course, very good news. This is a very important customer. This is a key customer. I will stop with the teasing here because I will never jeopardize, as you know, I'm obsessed by that customer relationship by giving more, let's say, indications or information for you to guess, but this is very good news.
How do you explain that you have those design wins from several customers in SmartSiC at the time? They don't need to order your products because the market is very challenging. I'm talking about electric cars in Europe and America.
Yes, you have two elements. The first element is that the qualification phase is long. Okay, then we have, and we said it a few years ago, we have underestimated the qualification times. Then it's two years plus two years. Two years to be qualified by the IDM integrators and so on, and two years to be qualified within the car. Then it's a long process, and we have to accept this long process. That's the first point. Second, you're right to mention that the electric vehicles market is shaken very strongly.
And the SiC promises in the future are now back to reality, back to the ground, taking into account that also we have to follow the price war. And we are following the price war by being stringent on the cost structures. Then we made very active work in adapting our cost structures, including, of course, efforts by the mono SiC and poly SiC suppliers to be in the race, to be in the race. And the fact we get a fifth qualification today, where in the past, it's not something I promise for the next quarter, but we are today in the pace of one qualification per quarter over the last year, this year.
Then it means that clearly we have something very innovative, a breakthrough that is cost-effective for the customers in terms of CapEx, OPEX avoidance, features effective for the final customers, and competitive from a price point of view. This is a proof point. Taking the profile of these customers, this fifth customer, it's an add-on and a tick in the box in the strength of the SmartSiC line of product.
Okay, thank you very much for those comments.
Welcome, Emmanuel.
Thank you. And we're now moving on to our next questioner, which is Alexander Peterc from Bernstein. Please go ahead.
Yes, good morning, and thank you for taking my question. I just have two. The first one is regarding the roll-off of Imager-SOI.
I'd just like to understand if the full EUR 50 million that you referred to is rolling off in fiscal 2026, or do you already see some effects of this phase-out in the current year? And so if that's the case, what's the proportion of this roll-off this year, and how much remains for next year? Then the second question is regarding your comments on content growth. You say that you expected a few years ago 10 to 15, and now we're around 5 to 45% content growth. Is this 10 percentage point drop in content growth a cyclical matter? So it's just the factor of the mix that we have currently, which is negative, or is there a structural drop in content growth? And if that's the case, why? Thanks.
Okay, Alex. Hello. Then on the first question on Imager-SOI, the roll-off is going to be total.
That means that next year, fiscal year 2026, and we got recent confirmation, we are not expecting revenue coming from this Imager-SOI first-generation product. Then let's be clear, in fiscal year 2026, we need to compensate around 5% of revenue weight we had. We benefited in fiscal year 2025. As I said, we are working on next-generation imaging systems, but they're going to generate first, let's say, revenue in two to three years from now. Then we'll have to compensate. That's the reason why the acceleration of Photonics is helping a lot, particularly Edge & Cloud AI, to offset a part of this big drop and this big phase-out that is quite rapid and brutal. But we need to also face reality, and we need to tell you exactly what is the situation. Regarding the content growth, the 5% content growth is on RF-SOI.
If you take, of course, POI and so on, the content of Soitec in a smartphone is between 10 to 15 because you add POI, you add a bit of FD-SOI for some applications like millimeter wave, envelope trackers, and so on. The limited 5% is on RF-SOI. Okay? Why? Because there are some, and we are working with the customers also on this aspect. There are some adaptations of the architectures trying to shrink a bit the effect. We have also some features that are taking more time to come. If I take the Wi-Fi 7, the Wi-Fi 7 is taking a longer ramp-up than expected in terms of adoptions by, first of all, the telecom service providers and the infrastructures. This content is also slowed down by the reasons of features we were expecting quicker. That's the reason why.
In terms of expansion of Soitec technologies within the smartphone, we're going to continue to expand thanks to more POI and thanks to more FD-SOI, even if for the moment, millimeter wave, I would like to say, is stuck to around 11%-12% penetration rate, and we don't see particularly a strong increase. The last point to add is that if you remember the 5G adoptions compared to years ago, we see a slowdown in the growth just because the infrastructures, the 5G infrastructures are also taking time to be deployed. It is, let's say, postponing a bit our ambition and our trajectory. Of course, the more 5G, the more Soitec, the more new features, the more Soitec. It is taking a bit more time. That's the reason why we have flattened a bit the content increase on RF-SOI in the different phones.
Plus, of course, as you know, the high-end versus low-range, that is also waiting for us, and the breakdown is very important to follow.
Can I just have a quick follow-up on Imager-SOI? So it's my understanding that Face ID isn't going anywhere. So did you miss a trick, and that's why you're not in the current generation or the forthcoming generation and only in the one after? What exactly happened here? Why do we have this gap? Thanks.
No, years ago, the customers of the customers decided to enter into a more integrated and simpler solution that is not using SOI. You don't need SOI product to proceed with these solutions. And it's really something that's going to a bit more simplification and integration on which SOI has no added value. But we need to think on the next generation of imaging systems for the phones.
Not only for the phones, for IoT and devices, generally speaking. Today, the imaging system is 2D, superficial imaging recognitions where you take some points on the surface. The next generation imaging system is going to go 3D, and they're going to use infrared millimeter waves to detect and to bring imaging across in 3D dimensions and sometimes across the skin. This next generation technologies are going to be very interested for SOI on another materials application. I don't want to disclose confidential roadmaps we are working with customers, but you will see that by using different materials, we're going to be in a position to also look at crystal orientations to use waves to go into 3D imaging systems and for more than only smartphone face image recognition, and we are working with several customers for several applications today.
But again, we will come back on it during maybe the presentation on innovation during the CMD.
Great. Thank you very much.
Thank you. And up next, we have Sébastien Sztabowicz from Kepler Cheuvreux. Please go ahead.
Yeah. Hello, everyone, and thanks for taking my question. Sorry to be on the level of inventory today. You mentioned that you are almost back to normal. Can you give a little bit more precise indication? Where are we standing right now? That is the normal level. And where do you see the inventories? I would say ending maybe 12 months down the road in terms of level. So are we expecting further inventory correction on RF in the next 12 months? And the second question, we have seen these two orders' consolidation affecting both autos and consumers. How do you see also the inventories in those markets?
Is there also a big inventory build ongoing that is likely to affect your demand over the next few quarters? Thank you.
Hello, Sébastien . Then on the RF-SOI inventory today, there is no change compared to what we said. We observe average 12 months end-to-end inventories in the supply chain with, of course, difference, and it's a patchy view, of course, regarding the different customers. But this is what we see. And as we said already, compared to the observed inventory before COVID, we are, yes, two to three months above this level because the level was around nine months. Then we have three months excess. Then the question is, will the customers go to pre-COVID view or metrics, or will they continue to live with 12-11 months?
This is today unclear, and we prefer to be cautious and to consider that some correction would continue between nine to 12 months, but this is exactly what we already said on November. No big changes compared to what we said. Just the fact that the orders we expect to get are just replenishing the inventories in Q1 calendar to be consumed in order to provide the smartphone new models, particularly during H2, and then after the consumption, they will restock again in Q1 calendar and so on, then this cycle is now quite stabilized, and there is a kind of plateau in this model, and then as long as we don't see more smartphones, high-end, more content, of course, AI revolution, this remains would last, but of course, we see a lot more and more innovation and technology to enter into the phones.
We have hopes beyond fiscal year 2026 to see back to growth in RF-SOI territories. But for the moment, we need to be cautious looking at the uncertainty and the lack of visibility for customers and the customers for customers. When you talk to them, when you look and you read the earnings, let's say, documentation by all these customers, they are also calling for, let's say, cautiousness and the lack of visibility in the end-to-end market. If we look at the inventories for auto, there are some building up of inventories. But as you know, we are working with a few customers for the moment in Power-SOI. Then we have a certain visibility with these customers. But these customers clearly have to fight on a daily basis to confirm contract, gain contracts. We don't see the same phenomenon, but there are some inventory building up.
That's the reason why also we are also very cautious on our automotive and industrial segments by forecasting for the market, a decrease, strong decrease on H1, talking about the market, and maybe a continued decrease for H2. We'll see, but lack of visibility is today's, I would like to say, the key words, and we are expecting by before summertime, springtime, a bit more visibility within the supply chain, and for consumers, what is happening there? Is this also an inventory build or for sure? For consumers, we are less accurate directly on consumer market. Then we are too, I would like to say, too small, too tiny players to give you, let's say, any visibility on the pure consumer electronics markets, the markets where we see, and we discuss a lot with supply chain and high-end customers.
Of course, customers of customers is smartphone, automotive, and edge and cloud activities.
Okay. Thank you.
Thank you. And from UBS, we now have François-Xavier Bouvignies with our next question. Please go ahead.
Thank you very much. Just wanted to come back on this inventory comment, the 12 months that you described that maybe will come down and you want to be cautious. I mean, last quarter, you said that it would be potentially the new normal, the 12 months, saying that you don't expect further down because it's a new normal level. And now you seem to suggest that it could come down. I mean, what is changing since last quarter when you said about these 12 months? It looks like you expect it further to come down. I didn't have this impression last quarter, but maybe I'm wrong.
Second is you talked about adaptation of architectures that would reduce the content for FD-SOI. Can you elaborate on that comment? I mean, what do you mean by adaptation of architecture? We'd love to have some color on that. And then finally, on POI, you had a strong year this year. Can you explain maybe the customers' roadmap? Do you expect more customers coming through? And should we expect for 2026 a double-digit percentage growth at least? Is the momentum still there? Thank you.
Okay, François. Starting with RF-SOI inventories, no changes except cautiousness within the value chain that is obvious now. 12 months is a new normal. But the normal we have experienced in the past is more nine months. It's exactly what we said.
Then if we look at the readings by the different players in the mobile supply chain, we need to look at a bit of cautiousness. Some customers might be comfortable with 12 months, but others might ask for going down. We have no specific messages. Clearly, there is nothing new in the conversation we had with our customers, except the fact that when you look at fabless conversations and readings coming from the earnings, yes, we need to look at cautiousness back to the lack of visibility in the market. If we look at the RF-SOI architecture, this is an optimization of the architecture because, of course, you have many, many features to run on RF-SOI, let's say, footprints. And the idea is to manage the different features.
It's part of the, let's say, deal and strategic relationships, technological relationships we develop with UMC, with the 3D IC packaging for RF-SOI. This is exactly this type of. Then we are on it. We are in these changes. We need to have more compact phones because the phones are bringing more and more dies, more and more capabilities also to swallow AI revolution. We need less and less energy consumption. This is exactly what we are working on. But content reduction doesn't mean value reduction. Then maybe the content is today plus 4%-5% in RF-SOI as it is today. But we are bringing more and more value because also we are bringing more and more technology. The 9SW product for GlobalFoundries is a revolutionary product for RF where we are bringing more and more value. Okay?
Then it means that, of course, we expect to increase step by step our footprint and also our value within this. Then it's a natural trend in which we are investing with our customers and in which we're going to bring more and more value because we're going to concentrate more features in a bit less footprints. Then, of course, it means more technology. And it's going to also give us a better advance compared to any other competitors. Then that's also a way to lead the pack and to continue to really run, to be a front-runner in these technologies. And it's the changes we are anticipating and we are working on very actively and creating value. Regarding POI, as we said, we have today 10 active in-production customers.
Sorry, we have 10, a bit more than 10 now, under evaluation customers. The big shift is that these customers now are more in the Western world, particularly in the U.S., where we have started in China. You know that China is going to weigh again on 20% of our revenue in fiscal year 2026, and we continue to weigh at that level in the years to come. But POI now is moving to a Western world, and we have more and more customers under evaluation or qualification in the U.S. to sustain the filtering revolutions in these areas. And that's, of course, a very important trend. POI is expected to continue to grow because we expand our footprints in terms of customers under qualification, industrialization, and evaluation.
Thank you very much.
You're welcome, François.
Thank you. And up next, we're moving to Olivia Honychurch of Jefferies. Please go ahead.
Good morning. Thanks for taking the question. A couple from my side. I just wondered if you could talk about the visibility that you have in each of your end markets. It sounds from your comments like mobile is still low. Clearly, auto is still low given the inventory correction the whole market is seeing, not just you. Edge & Cloud AI might be slightly better. But I'm just trying to get a sense of how you expect to gain confidence in building guidance for FY26 in the context of that limited visibility, which I think you'll be giving us in three months' time. And then I have a follow-up. Thank you.
Then, as we said, then visibility is quite low. It's quite low. It's lack of visibility, to be clear. And there is a cautiousness in all the messages surrounding us. We have a strong relationship with our customers.
We review with them on a regular basis their view forecast and so on, even if they're also lacking of visibility. I mean, we are lacking of visibility because they are lacking of visibility and their customers are lacking of visibility. And it's not something we say out of the blue. It's just you read, let's say, the documentation around us for the last months. Then in this context, we are working step by step on building, of course, a business plan over five years, as it is our regular process, and a budget for fiscal year 2026. Then we're going to refine and revisit this exercise. And we're going to come back to you with, let's say, more details on May. And this is everything we can tell you. But I repeat, mobile, soft, but POI growing, automotive in decline. It's H1.
I'm talking about the market in decline in H1 and risk of continued decline in H2 Edge & Cloud AI growing thanks to FD-SOI, but mainly silicon photonics, offsetting a total phase-out of a Imager-SOI business. This is everything we already said, and it's exactly what I said already on November.
Great. Thank you. Just my follow-up on Photonics-SOI, which you mentioned there. Previously, you've talked about that growing at around 60%. Can you remind me which year that rate relates to? And maybe talk about how you see that growth progressing over the next few years, given that the adoption of silicon photonics in AI data centers is clearly very strong, as you said. Thanks.
Well, silicon photonics is today on a track that is, of course, very, very intense because we need to deliver to many customers for equipping next-generation data centers with transceivers.
This is the mainstream today of activities for silicon photonics business, even if we are working on, of course, the next-generation co-packaged optics solutions that will come perhaps a bit earlier than we had scheduled with the key players. All in all, we believe that silicon photonics will enter into the club of the $100 million revenue BU by fiscal year 2027.
Great. Thank you.
You're welcome.
Thank you. And from Deutsche Bank, we now have Robert Sanders with our next question. Please go ahead.
Yeah, good morning. I've got three questions I just want to squeeze through. One is, have you let any larger customers allow their LTAs to expire? I mean, have they chosen, I guess is the right way of saying it, to let those LTAs expire? Obviously, it has kind of accentuated the problem given the minimums embedded in those contracts.
So I was just wondering if you've decided to maybe change the way you work with those largest customers. The second one is just a layer on the H1 versus H2 seasonality. Is that still roughly 40%, 60% in terms of the split between first half and second half as it was in fiscal 2025? Just wanted to double-check that. And then the last one on the China RF business, obviously, quite a lot of new China RF players. Can you just confirm that your share is higher in China versus companies like Qorvo and Skyworks? Thanks a lot.
Well, it's probably easier to take your second question. I will cover the questions one and three, Robert.
Yes. Good morning, Rob. Yes, we see an effect of seasonality, a big effect of seasonality for FY 2026. It's too early to know the exact trends.
We are still working on our FY26 outlook, but yes, we'll have a seasonality effect at least at the same extent as this year.
Okay. On your first question, Rob, on the LTA, then there is no LTA expiration coming or came recently. On the contrary, we signed a few LTAs with customers running over a few years, four to five years, depending, and that is quite new. Of course, it's not generally speaking, but this year, we had LTAs after difficult years before fiscal year 2024 in this domain, then we start seeing customers coming back with LTAs. It's a beginning. It's soft, but there is something important coming up. Despite the difficulties of the market, despite the uncertainties, it's a very important signal to underline that.
But I believe that there are more buying Soitec technologies and reliability, and there are more betting on our ability to really run ahead of the market and provide the best-in-class technologies. That's really, for me, a signal of trust and confidence in the long run, again, despite the market uncertainties. Regarding the RF players or RF business in China, our technologies are today equipping 100% of the smartphones in the world. Then we can suspect that it is the same for, let's say, RF or smartphone made or sold in China. This is everything I can tell you. And the overall SOI segment shares for Soitec is 70%, as you know. Then we could imagine that through the way of the supply chain, we are experiencing more or less the same market shares for our technologies and for Soitec.
But nothing more to tell you at this stage.
Thanks a lot.
Welcome.
Thank you. And we have one last question for today's call, which comes from Sufian Shafi from Citi. Please go ahead.
edge and cloud AI
Difficult to forecast. We need more to look at the dynamics and what are the criteria to bring, let's say, high-end mobile phones in a better dynamics. First of all, the price is a bit dissuasive. We experience inflation in smartphones, and particularly in high-end smartphones.
The second-hand market continues to thrive. And people in the second-hand market or repair market are buying high-end phones. That is a bit cannibalizing the first-hand, high-end smartphones. That's very important to understand the trend. And for me, the dynamics that are going to reshuffle the high-end segments of the smartphones are going to be features, applications, surely based on AI, that are going to make this smartphone unavoidable, or let's say, to get in the pocket. This is, for me, the AI revolution entering into the smartphone that's going to make these types of, let's say, devices different from phones and more a kind of personal assistant for your daily life. In that case, we would enter into a supercycle for the smartphone industry. It should come. It should come. When you listen to many things, articles and whatever, it should come.
We don't know how, when, and which magnitude, but that's going to be, of course, very important topics. And of course, as Soitec, we're going to benefit a lot from this supercycle, but it's not today at all in our model. I believe we covered all the subjects. Okay. Thank you very much. Then this is the conclusion we can go for. And thank you for the Q&A session. Thank you for your interest and for the dynamic of the exchange in depth and your question. And also, very important to recall and to repeat strongly that the fundamentals of this group are totally intact. We manage successfully the governance crisis that is behind us. We manage successfully to diversify our activities with many products, many customers, many geographies going on. We are gaining shares, gaining marketplaces, gaining positions.
We are developing a very strong technology leadership in all the domains we are investigating and more to come. We didn't talk in detail about Smart Cut. We didn't talk about other products we are working on, but we're going to enter more into details, but already where we are, we are leading from a technical point of view, and we have many, many new products in the car box, particularly through the incubators we have created very recently to be ready for launching when the market is going to be ready. We are working, of course; it's confidential with many customers for that. Talking about customers, we have developed in-depth and strong relationships with our customers on the long run.
I can tell you that we have today good, if not very good, relationships with all our existing and also new customers we didn't know a few years or even months ago. And that's, of course, extremely important and very inspiring for the team, for the engineers, for the technicians, for the operators in this company. They see and they feel that they make part of the history of the semiconductor by bringing to the market next-generation, very innovative engineered substrates. Thank you very much for your attention again. And we love the next steps of the agenda for the Q4 2025 revenue and our fiscal year 2025 revenue on May 27th after market close. And we'll be hosting our Capital Markets Day in Paris the day after on May 28th. And I'm looking forward to seeing you, many of you there. This ends our call for today.
Thank you very much.
Thank you for joining today's call, ladies and gentlemen. You may now disconnect.