Tower Semiconductor forecasts upbeat Q4 revenue; unveils $350 mln investment plan

Tower Semiconductor

13/11/2024 13:32

Nov 13 (Reuters) - Israeli contract chipmaker Tower
Semiconductor  TSEM.TA   forecast its fourth-quarter revenue
above estimates on Wednesday, driven by a recovery in demand for
its chips, and said it plans to invest $350 million to expand
capacities.
    The U.S.-listed shares of the company were up 7.5% in
premarket trading.
    The company said the investment will expand capacities for
its silicon photonics, used in autonomous vehicles, and silicon
germanium, used in wireless communication and high-performance
computing systems.
    However, the company did not disclose the time frame for
this investment.
    The plan also includes the qualification and ramp-up of
200mm capacity, both in San Antonio and Migdal Haemek, Israel,
and in its 300mm facility in Uozu, Japan.
    The company makes analog and mixed-signal semiconductors
used mainly in automobiles for "fabless" firms, which outsource
chip manufacturing.
    Slowing growth in demand for electric vehicles has kept
inventory levels for chips used in the automotive industry at
elevated levels.
    However, Texas Instruments - a bellwether for analog chip
demand - indicated last month that improving demand from the
Chinese automotive market is helping drive down chip inventory
levels.
    Tower Semiconductor expects to report fourth-quarter revenue
of $387 million, with an upward or downward range of 5%, beating
analysts' expectations of $379.2 million, data compiled by LSEG
shows.
    In September, Tower Semiconductor tied up with India's Adani
Group to invest 839.47 billion rupees ($10 billion) for a
project in India's western state of Maharashtra. The project
will initially have a capacity of 40,000 wafers.
    It reported third-quarter revenues of $371 million, which
was ahead of Wall Street estimates of $370.3 million. Its
quarterly profit was 57 cents per share, compared with analysts'
estimates of 53 cents per share.

 (Reporting by Rishi Kant in Bengaluru; Editing by Vijay
Kishore)
 ((Rishi.Kant@thomsonreuters.com;))