Tower Semiconductor announced that it will take full ownership of its 300‑mm Fab 7 in Japan, a move that will enable a four‑fold increase in the facility’s output once the planned expansion is complete. The transaction is slated to close on April 1 2027, subject to regulatory approvals and customary closing conditions.
The company said the restructuring will strengthen its differentiated silicon photonics and optical platforms, with the first increases in photonics shipments expected immediately after new tools arrive in the expanded fab footprint. The expansion is contingent on subsidy approval from Japan’s Ministry of Economy, Trade and Industry (METI) and is part of Tower’s broader strategy to expand its high‑value analog foundry footprint in a key market.
Tower’s Q4 2025 results provide context for the expansion. The company reported earnings per share of $0.78, beating the consensus estimate of $0.67, and revenue of $440.21 million, up 13.7% year‑over‑year. Silicon photonics and silicon germanium revenue accounted for 27% of total revenues in FY25, rising to $421 million from $241 million in FY24. Management guided for Q1 2026 revenue of approximately $412 million, reflecting confidence in continued demand from AI data‑center customers.
CEO Russell Ellwanger said, “This step enables Tower to further strengthen our differentiated optical and photonics technology platforms through a large and profitable expansion of our 300‑mm operational capabilities.” He added that the company is proud to deliver advanced, high‑speed technologies that support demanding data‑center and AI requirements, and that it will continue to invest significantly across its SiGe and silicon photonics platforms to support the ecosystem with industry‑leading performance, scalability, and manufacturability.
Investors responded positively, citing enthusiasm for AI and silicon photonics, the company’s partnerships with firms such as Oriole Networks and Coherent, and institutional buying that signals confidence in Tower’s strategic direction. The expansion positions Tower to meet growing demand for high‑speed optical interconnects in AI data centers and to solidify its role as a leading foundry for silicon photonics.
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