BofA Upgrades Technoprobe and Soitec to Buy, Citing AI Infrastructure Demand for Chip Testing and Optical Connectivity

According to a report by TechNews, Bank of America has named Italian probe card manufacturer Technoprobe and French silicon-on-insulator (SOI) substrate supplier Soitec as its "top picks among European small-to-mid-cap semiconductor stocks," upgrading both to "Buy." The move reflects confidence that the ongoing AI infrastructure boom will continue to drive demand for these critical components.

Headquartered in Italy, Technoprobe is a global leader in GPU probe cards, which are used to electrically test wafers before packaging. BofA analysts argue that as testing becomes more complex due to advancements in CPUs, custom ASICs, High Bandwidth Memory (HBM), and silicon photonics, Technoprobe will benefit significantly. The bank estimates that approximately 50% of Technoprobe's current revenue is linked to AI applications, a figure expected to rise to 70% by 2028.

Soitec, based in Bernin, France, is a key supplier of advanced semiconductor substrates, holding a near-monopoly position in the market for SOI substrates specifically designed for silicon photonics. BofA notes that as AI data centers require higher bandwidth, the demand for optical connectivity ports is growing faster than the demand for AI chips themselves, accelerating the need for Soitec's substrates. The bank raised its price target for Soitec from €152 to €300.

It is worth noting that shares of both companies have already surged, with Technoprobe up more than double and Soitec up more than four times year-to-date, indicating that the market has partially priced in this upstream AI supply chain narrative. J.P. Morgan recently initiated coverage on Technoprobe with a €45 price target, also citing growth in semiconductor production volumes and increasing testing demands.