Tower Semiconductor Ltd. (NASDAQ: TSEM) announced a partnership with Salience Labs Limited, a photonics company focused on AI data‑center connectivity. The collaboration will combine Tower’s silicon‑photonic foundry capabilities—specifically the PH18DA and TPS45PH platforms—with Salience’s optical‑switch design expertise to create next‑generation AI data‑center optical switches that deliver high‑density, low‑latency connectivity.
The joint effort targets terabit‑per‑second data rates required by large AI clusters. By integrating silicon‑photonic integrated light sources with Salience’s switch architecture, the partnership aims to accelerate time‑to‑market for optical switches that can support the growing bandwidth demands of AI workloads. The partnership also positions Tower to capture a share of the projected $100 billion-plus AI back‑end switch market by 2030, as projected by Dell’Oro Group.
Tower’s existing silicon‑photonic and RF infrastructure businesses will benefit from the new partnership. The collaboration is expected to generate a new revenue stream tied to the rapid expansion of AI data‑center deployments, complementing Tower’s record Q4 2025 revenue of $440 million and its aggressive silicon‑photonic capacity expansion of $920 million, of which over 70 % is already reserved by customers through 2028. The partnership therefore strengthens Tower’s competitive position in the high‑value analog foundry space and signals confidence in scaling AI platform monetization.
Management emphasized the strategic fit of the collaboration. Dr. Ed Preisler, Vice President and General Manager of Tower’s RF Business Unit, said, “Silicon photonics with integrated light sources is a key enabler for scaling next‑generation optical connectivity, and our collaboration with Salience Labs reinforces our strong momentum in AI and data‑center infrastructure.” Vaysh Kewada, Founder, CEO and Director of Salience Labs, added, “Tower is a key partner for Salience Labs, supporting our roadmap with its silicon photonics and switching technology platforms. Our collaboration builds on our deep expertise in silicon photonics and specialty platforms, strengthening our ability to deliver optical switch technology optimized for the performance and power demands of AI data centers.”
The partnership aligns with Tower’s broader strategy of deepening its AI infrastructure footprint. Recent announcements—including a collaboration with NVIDIA on 1.6 T data‑center optical modules and a partnership with Xanadu for photonic quantum hardware—demonstrate Tower’s focus on high‑growth, technology‑intensive markets. The new alliance is expected to accelerate the development of pre‑production optical switches, positioning Tower to meet the bandwidth needs of future AI workloads while leveraging its existing customer commitments and capital investment in silicon‑photonic capacity.
The market reaction to the partnership is underpinned by Tower’s strong Q4 2025 performance and its capacity expansion plan. Analysts noted that the company’s record revenue and profitability, combined with the high customer commitment to its silicon‑photonic platforms, have bolstered investor confidence. The partnership is viewed as a logical extension of Tower’s AI strategy and a potential driver of future revenue growth in a rapidly expanding market.
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