Tower Semiconductor signs $1.3 billion AI chip deals as silicon photonics demand surges

Tower Semiconductor Hits 52-Week High - Here's Why - Tower Semiconductor (NASDAQ:TSEM)

Tower Semiconductor Nearly Doubles Operating Profit On AI Tailwinds The company posted first-quarter revenue of $413.63 million, up 15% from a year earlier and ahead of analysts' estimates of $410.98 million. Adjusted earnings came in at 65 cents per share, topping Wall Street expectations of 56 cents per share. Tower Semiconductor Profit Growth And Margin Expansion Gross profit increased 52% year over year to $110.95 million, while gross margin expanded to 26.8% from 20.4% a year earlier. Operating profit rose 96% to $64.57 million. Operating cash flow surged to $509.97 million from $93.92 million in the prior-year quarter. Tower Semiconductor ended the quarter with $243.31 million in cash and cash equivalents as of March 31, 2026. Silicon Photonics Deals Boost Long-Term Visibility Tower Semiconductor said it signed silicon photonics agreements expected to generate $1.3 billion in revenue in 2027 from its largest customers. The company also secured $290 million in advance payments tied to capacity reservations. The company said customers have additionally committed to a larger wafer supply agreement for 2028, with further prepayments expected by January 2027. Tower said demand continues to rise as more than 50 silicon photonics customers expand artificial intelligence, data center and optical connectivity applications. Chief Executive Officer Russell Ellwanger said the long-term agreements strengthen the company's position in the optical connectivity market, which is benefiting from growing AI infrastructure demand. Ellwanger added that Tower continues expanding manufacturing capacity globally to support next-generation optical networking technologies. The company is targeting $2.8 billion in annual revenue and $750 million in net profit by 2028. AI And Manufacturing Expansion Remain Key Focus Executives said AI-driven demand, long-term customer agreements and growing silicon photonics production remain major growth catalysts. The CEO said silicon photonics capacity is expected to increase fivefold from fourth-quarter 2025 levels by the end of 2026 as the company invests in AI connectivity technologies, optical networking and advanced packaging solutions. Tower Semiconductor Outlook Tower Semiconductor forecast second-quarter revenue of $432.25 million to $477.75 million, compared with analysts' estimates of $436.38 million. TSEM Price Action: Tower Semiconductor shares were up 15.43% at $254.90 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data. Photo: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Tower Semiconductor lifted by AI chip demand and photonics contracts

Tower Semiconductor has raised its Q2 revenue guidance and announced contracts totaling $1.3bn related to chips for artificial intelligence data centers. The announcement propelled the Israeli foundry's stock up over 12% on Wall Street. The group is benefiting from robust demand for its analog and mixed-signal processors, driven by massive investments in data infrastructure and AI. The company now forecasts quarterly revenue of $455m, compared to the $436.4m expected by analysts according to LSEG. Tower Semiconductor also announced several agreements in the field of silicon photonics, a technology that enables ultra-high-speed data transmission via light within AI data centers. These contracts are expected to generate approximately $1.3bn in revenue by 2027. The group has already received $290m in customer prepayments to secure production capacity. CEO Russell Ellwanger saif that Tower remains confident in its target of reaching $2.8bn in annual revenue and $750m in net profit by 2028. In Q1, the group's revenue grew by 15% to $414m, slightly above market expectations, while adjusted EPS reached 65 cents against the 56 cents expected. Tower Semiconductor also remains embroiled in a legal dispute with GlobalFoundries, which has accused it since March of infringing several patents related to chip manufacturing for smartphones and electronic devices.

Tower Semi forecasts upbeat quarterly revenue, signs $1.3 billion in AI chip deals

May 13 (Reuters) - Tower Semiconductor on Wednesday forecast second-quarter revenue above estimates and said it landed $1.3 billion in deals for 2027 to supply chips that use light to move data at high speeds through artificial intelligence data centers. Strong demand for its analog and mixed-signal processors on the back of rising investment in data centers and AI helped boost the Israeli contract chipmaker's quarterly forecast, sending its U.S.-listed shares over 17% before the bell. o Integrated circuits developed by the company are used by a wide range of industries including automotive, industrial, consumer electronics and communications. o The company expects second-quarter revenue of $455 million, above analysts' average estimate of $436.4 million, according to data compiled by LSEG. o Tower Semiconductor also announced that it signed silicon photonics deals worth $1.3 billion for 2027 revenue and received $290 million in customer advance payments to secure production capacity. o It added that customers have committed to larger orders for 2028, with more advance payments due by January 2027. o "We are confident in our path toward achieving our financial model targets of $2.8 billion in annual revenue and $750 million in net profit in 2028," CEO Russell Ellwanger said. o Tower reported a 15% rise in first-quarter revenue to $414 million, beating estimates of $411 million. Adjusted profit came in at 65 cents per share, compared with estimates of 56 cents. o In March, rival GlobalFoundries sued Tower alleging the Israeli chipmaker infringed 11 patents related to manufacturing chips used in smartphones and other electronics. (Reporting by Arunesh Sinha and Anhata Rooprai in Bengaluru; Editing by Shreya Biswas)