Tower Semiconductor (TSEM.TA), an Israeli contract chipmaker, has forecasted slightly higher-than-expected first-quarter 2025 revenue, driven by steady demand for its chips, particularly from the automobile sector. The company’s U.S.-listed shares rose by 1% in premarket trading following the announcement.
Tower specializes in manufacturing analog and mixed-signal semiconductors, which are primarily used in the automobile industry by “fabless” firms that design chips but outsource their production. Despite challenges within the automobile sector, such as difficulties in clearing excess inventory built up during the pandemic and a recent slowdown in demand for electric vehicles, Tower Semiconductor has remained resilient, continuing to supply its chips.
The company is now forecasting first-quarter revenue of $358 million, with a 5% margin of variability. This projection slightly exceeds analysts’ expectations of $357.5 million, according to LSEG data. For the fourth quarter, Tower reported revenue of $387.2 million, meeting analyst forecasts. However, its net profit for the quarter ending December 31 came in at $55.1 million, below the expected $58.7 million, mainly due to increased costs from its new greenfield chipmaking facility in Agrate, Italy.
On an adjusted basis, the company posted quarterly profit of 59 cents per share, surpassing analyst estimates of 52 cents per share.
