On May 27, Tower Semiconductor fell 5.38% in regular trading, trading at $274.8/share, with trading volume of $213 million. The decline was driven by broad semiconductor sector weakness and emerging market concerns over silicon photonics yield issues at the company's Fab 9 facility.

The semiconductor sector experienced widespread selling pressure, with Marvell Technology down 5.18%, Intel down 4.16%, AMD down 2.58%, and NVIDIA down 2.3%, creating sector-wide downward resonance. Meanwhile, market rumors surfaced suggesting that certain 1.6T silicon photonics chips processed at Tower's Fab 9 encountered process issues, potentially affecting some Q2 optical module deliveries. Industry sources indicated the issue represents normal early-stage manufacturing variation rather than a systemic yield failure, noting that 1.6T production remains in a ramp-up phase where flow variations are not uncommon.

The stock had previously surged over 40% following a $1.3 billion silicon photonics long-term supply contract and Q1 earnings that beat expectations, reaching a 52-week high of $302.86 before intensified profit-taking pressure emerged.

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