Tower Semiconductor Raises Forecasts on AI and Data Center Demand Surge
Tower Semiconductor, the Israeli-based contract chipmaker, forecast fourth-quarter revenue above market expectations, driven by booming demand for chips used in data centers and AI infrastructure. The announcement sent the company’s U.S.-listed shares up 15%, reaching their highest level in over two decades after a 63% surge this year.
The company said it expects revenue of around $440 million, plus or minus 5%, surpassing analysts’ estimates of $434.4 million, according to LSEG data.
CEO Russell Ellwanger attributed the growth to strong demand for Tower’s analog and mixed-signal semiconductors, which are widely used in automotive, industrial, and communications technologies. He added that the company’s Silicon-Germanium and Silicon Photonics technologies — essential for high-speed optical data transmission — are key growth drivers as global data center expansion accelerates.
Tower also announced an additional $300 million investment to expand its manufacturing capacity and advance next-generation chip capabilities across Israel, the United States, Italy, and Japan.
For the third quarter ended September 30, Tower reported revenue of $395.7 million, slightly above forecasts, and adjusted earnings of 55 cents per share, topping estimates of 54 cents.
The results highlight the semiconductor industry’s ongoing shift toward AI-driven infrastructure, where specialized chips for data transmission and network performance are becoming vital to global tech ecosystems.