The same AI connectivity boom behind the Marvell-Lumentum deal is showing up in a specialty foundry’s results.
Tower Semiconductor reported record third-quarter revenue of $526 million, up 33% from $396 million a year earlier. Gross profit rose 92% to $179 million, operating profit reached $127 million and net profit hit a record $120 million, or $1.05 per diluted share. Adjusted diluted EPS was $1.15, ahead of analyst forecasts, according to Globes.
Guidance points higher
Tower guided fourth-quarter revenue to $600 million, plus or minus 5%, which would be up 36% from a year earlier and 14% from the third quarter. That would bring 2026 revenue to about $2 billion.
“We are entering the strongest growth phase in our history,” CEO Russell Ellwanger said. He said infrastructure demand for silicon photonics (SiPho) and silicon germanium is driving exceptional growth, and that Tower targets an annualized $1.1 billion SiPho revenue run rate in the fourth quarter alone.
Capacity and hiring
Ellwanger said capacity investments, including the 300mm buildout in Japan, are ahead of schedule, with customer contracts being extended through 2029. He told Globes the company is hiring 150 operators and technicians in Israel.
Why it matters
Optical chips for AI networking are becoming a major business in their own right. Supply for these parts is tight, and long-term customer contracts are becoming common.
For vendors in data center networking and AI infrastructure, supply assurance is a selling point. Marketing that explains availability, lead times and roadmap alignment will resonate with buyers planning large AI builds.
Sources: Tower Semiconductor, Globes. Written by the xRapid Media LLP team.
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