Shares of Tower Semiconductor surged Tuesday after the Israel-based chip company announced a large expansion plan in Japan and hiked its 2028 outlook.

Tower Semiconductor shares in the U.S. rose 19% to $272.16 in premarket trading on Tuesday, extending gains of 3% from the previous session. The stock has risen 95% this year as of Monday's closing bell.

The company announced Tuesday it plans to invest $3 billion, with a $1 billion grant from Japan's government, to build up its chip-making capacity in the country. Tower Semiconductor said in a press release that the expansion is designed to support "rapidly growing long-term customer demand" and to "substantially increase its manufacturing capacity."

"This investment creates long-term value for both Tower and Japan by establishing advanced domestic manufacturing capabilities in silicon photonics and silicon germanium, strengthening Japan's semiconductor ecosystem and supply chain resilience," Tower Semiconductor said.

Silicon photonics and silicon germanium chips are widely used in optical and wireless networking.

Tower Semiconductor on Tuesday also lifted its business outlook, with expectations for sales of $3.6 billion and net profit of $1.2 billion in 2028. That's a considerable increase from the company's previous forecast for revenue of $2.8 billion and net profit of $750 million.

Write to Kit Norton at kit.norton@barrons.com

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July 14, 2026 09:09 ET (13:09 GMT)

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