Tower Semiconductor Beats Quarterly Profit Estimates On AI-Driven Chip Demand

Reuters
02/11

Feb 11 (Reuters) - Israeli contract chipmaker Tower Semiconductor TSEM.TA beat Wall Street expectations for fourth-quarter profit on Wednesday, helped by demand for its chips for fast data transmission in artificial intelligence infrastructure.

U.S.-listed shares TSEM.O were up 6% in premarket trading.

Demand for Tower's silicon photonics technology, which transmits data at high speeds using light, has made it an important supplier as data center operators race to build infrastructure capable of handling complex AI workloads.

The company is making an additional $270 million investment in equipment for silicon photonics chips, it said on Wednesday, taking the total spending on the high-speed technology to $920 million.

Tower aims to make over five times as many of these chips per month by the end of 2026 as it shipped in late 2025, CEO Russell Ellwanger said, adding that customers have already agreed to buy that additional volume.

The company forecast first-quarter revenue of $412 million, plus or minus 5%, compared with estimates of $408.4 million, according to data compiled by LSEG.

It reported revenue of $440.2 million for the fourth quarter, compared with estimates of $439.8 million.

Adjusted profit for the quarter came in at 78 cents per share, beating estimates of 68 cents per share.

Tower also makes analog semiconductor wafers for other companies in the U.S., Israel, Japan and Italy.

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