Tower Semiconductor Raises Quarterly Revenue Forecast, Signs $1.3 Billion Silicon Photonics Chip Order

Israeli wafer foundry Tower Semiconductor released its financial report on Wednesday, reporting a 15% year-over-year increase in first-quarter revenue to $414 million, slightly above market expectations of $411 million, with adjusted earnings per share at $0.65, also higher than the expected $0.56. The company also raised its second-quarter revenue guidance to $455 million, higher than the average analyst forecast of $436 million.

The market is more concerned about the company's announcement of signing a $1.3 billion silicon photonic chip order, which will supply AI data centers by 2027. These chips use light instead of electric signals to transmit data and have significant power consumption and bandwidth advantages in high-speed interconnection scenarios, making them one of the key components of next-generation AI infrastructure. The company has also received a $290 million customer prepayment to lock production capacity and stated that the customer has committed to further expanding the order volume by 2028.

CEO Russell Ellwanger stated that the company is confident in achieving financial targets of $2.8 billion in annual revenue and $750 million in net profit by 2028.

It is worth noting that competitor GlobalFoundries filed a patent lawsuit against Tower in March this year, accusing it of infringing on 11 patents related to smartphone and consumer electronics chip manufacturing, and the progress of this case remains a potential risk point.