Tower Semiconductor, an Israeli wafer foundry, reported better-than-expected profits for the fourth quarter of 2025, according to its earnings released on Wednesday. The strong performance was primarily driven by a surge in demand for its high-speed data transmission chips used in artificial intelligence infrastructure. The company's U.S.-listed shares rose nearly 4% in early trading on Wednesday.

Key Financial Metrics - Fourth-quarter revenue: $440.2 million, compared to an expected $439.8 million. - Adjusted earnings per share: $0.78, surpassing the forecast of $0.68. - First-quarter revenue guidance: $412 million (±5%), which is above the anticipated $408.4 million.

Silicon Photonics Emerges as Growth Driver Tower Semiconductor is experiencing robust demand for its silicon photonics technology, which utilizes light for high-speed data transmission. This has positioned the company as a key supplier for data center operators racing to build AI infrastructure. As these operators accelerate the development of facilities capable of handling complex AI workloads, such high-speed data transfer technology has become critically important. On Wednesday, the company announced an additional investment of $270 million in silicon photonics equipment, bringing the total expenditure on this advanced technology to $920 million. CEO Russell Ellwanger stated that the company aims to increase its monthly production capacity for silicon photonics chips to more than five times the volume shipped by the end of 2025, with a target date of the end of 2026. He added that customers have already committed to purchasing the new capacity.

Diversified Business Operations Beyond silicon photonics chips, Tower Semiconductor also manufactures analog semiconductor wafers for other companies based in the United States, Israel, Japan, and Italy.