Tower Semi Soars on Strong Forecast, $1.3B AI Chip Deals

Tower Semiconductor Announces Strong Q2 Forecast and Major AI Deals

Israeli contract chipmaker Tower Semiconductor projected second-quarter revenue of $455 million, surpassing analysts' estimates. The company also announced it has secured $1.3 billion in silicon photonics deals for its 2027 revenue, driven by strong demand from the artificial intelligence sector.

Riding the AI Wave

The optimistic forecast is fueled by robust demand for Tower's analog and mixed-signal processors amid rising global investment in data centers and AI infrastructure. This follows a strong first quarter where revenue reached $414 million and adjusted profit was 65 cents per share, both beating LSEG estimates.

Stock Surges on Positive Outlook

Following the announcement, Tower Semiconductor's U.S.-listed shares surged over 17% in pre-market trading. The deals include $290 million in customer advance payments to secure production capacity, signaling strong confidence in the company's future growth, with further commitments expected for 2028.

Forward-Looking Confidence

CEO Russell Ellwanger expressed confidence in achieving the company's long-term financial targets, aiming for $2.8 billion in annual revenue and $750 million in net profit by 2028, solidifying its position in the competitive chip market.

FAQ

Q: What was Tower Semiconductor's Q2 revenue forecast?
A: The company forecast second-quarter revenue of $455 million, above the analysts' average estimate of $436.4 million.

Q: What major deals did Tower Semiconductor announce?
A: Tower announced $1.3 billion in silicon photonics deals for 2027 revenue, primarily for AI data center applications.

Source: Investing.com