Tower Semiconductor Forecasts Record Q4 Revenue Amid Data-Center Boom

Tower Semiconductor Ltd., a leading independent semiconductor foundry, has forecasted a record quarterly revenue of $440 million for the fourth quarter of 2025, driven by strong demand for chips powering artificial intelligence (AI) and data-center networks. This forecast represents a significant increase from its third-quarter revenue of $396 million and surpasses analyst expectations, signaling robust growth ahead for the company.

Strong Q3 Performance and Upbeat Outlook

In the third quarter ending September 30, 2025, Tower Semiconductor reported revenue of $396 million, marking a 6% increase quarter-over-quarter and a 7% rise year-over-year. The company also posted a net profit of $54 million, or earnings per share of $0.48, exceeding market estimates. This strong performance set the stage for the company's confident guidance of $440 million in Q4 revenue, with a margin of plus or minus 5%, reflecting an expected 14% year-over-year growth for the quarter.

Drivers of Growth: AI, Data Centers, and Core Technologies

The surge in Tower Semiconductor’s revenue is largely attributed to increasing demand for its core analog semiconductor technologies, especially Silicon-Germanium (SiGe) and Silicon Photonics (SiPho) chips. These specialized chips are crucial in enabling high-speed optical data transmission and efficient data transfer in AI-driven systems, making them integral to next-generation data-center and telecommunications infrastructure.

CEO Russell Ellwanger emphasized that Tower’s SiGe and SiPho technologies are pivotal for the high-performance requirements of modern AI applications and data-center networks, which continue to expand rapidly worldwide. This demand has fueled sweeping growth across Tower’s product lines, positioning the company as a key supplier in a profitable niche within the semiconductor industry.

Significant Investments to Expand Capacity

To capitalize on this momentum, Tower Semiconductor announced plans to invest an additional $300 million to expand production capacity and advance next-generation chip capabilities. This investment will be distributed across four global fabrication facilities, including sites in Israel, the United States, Italy, and Japan.

Previously, advanced SiPho and SiGe chips were produced exclusively at Tower’s Newport, U.S. facility. The new investment aims to extend these production capabilities to other plants worldwide, enhancing the company’s ability to meet growing customer demand and support long-term growth strategies.

Market Reaction and Future Prospects

Following the earnings announcement and revenue guidance upgrade, Tower Semiconductor's stock price surged by over 15% in pre-market trading, reflecting strong investor confidence in the company’s outlook. The market values Tower at around $10 billion, with expectations for continued expansion driven by AI and data-center trends.

Looking forward, Tower aims to achieve approximately $1.5 billion in annual revenue by the end of 2025, representing a compound annual growth rate of 14%. The company’s focus on specialized analog semiconductor technologies and capacity expansion is expected to sustain its competitive edge and growth trajectory in a dynamic industry landscape.

Company Overview

Tower Semiconductor Ltd. operates as a specialty foundry providing customizable process technologies such as SiGe, SiPho, mixed-signal CMOS, RF CMOS, CMOS image sensors, and integrated power management solutions. Its customer base spans the United States, Japan, Asia, and Europe, servicing markets including automotive, telecommunications, data centers, and consumer electronics.

With a market capitalization of approximately $9.4 billion and a strong balance sheet, Tower Semiconductor is strategically positioned to leverage advancements in AI and data communications, driving innovation and revenue growth.

Written by Deepak Periyasamy.

Call to action: Visit TNT PCB for PCB fabrication and instant quotes and TNT E-Comp to order electronic components online (a THANSIV group).