Tower Semiconductor forecasts third-quarter revenue above estimates on AI chip demand

Tower Semiconductor

04/08/2026 12:39

Aug 4 (Reuters) - Tower Semiconductor TSEM.TA forecast third-quarter revenue above Wall Street estimates on Tuesday, as strong spending on artificial intelligence infrastructure boosts demand for its specialty chips.

Here are some details:
Tower Semiconductor makes specialty chips for other companies, serving industries including automotive, industrial, consumer electronics and communications.
Silicon photonics is one of Tower's fastest-growing businesses, benefiting from rising AI infrastructure spending by major technology companies.
Silicon photonics uses light instead of electrical signals to move data faster and more efficiently across data-center networks.
The company posted second-quarter revenue of $460 million, above analysts' average estimate of $454.7 million, according to data compiled by LSEG.
Adjusted earnings per share came in at 79 cents, above analysts' estimate of 76 cents.
Tower forecast third-quarter revenue of $520 million, plus or minus 5%, above analysts' estimate of $490 million.
Last month, Tower said it would invest about $3 billion to expand chip manufacturing in Japan, backed by about $1 billion in government grants, to meet growing AI-related demand.
In May, the company announced $1.3 billion in silicon photonics supply agreements for 2027 and received about $290 million in customer prepayments to secure production capacity.
CEO Russell Ellwanger said silicon photonics reached a $680 million annual revenue run rate in the second quarter, up from $180 million a year earlier, and the company expects to exceed a $1 billion annual run rate in the fourth quarter.

 (Reporting by Anzar Mehraj in Bengaluru; Editing by Tasim Zahid)
 ((Anzar.Mehraj@thomsonreuters.com;))