Tower Semiconductor Raises 2028 Financial Targets Amid Major Production Expansion in Japan
Tower Semiconductor announced a strategic expansion plan for its 300mm silicon wafer production capacity at its Japanese facility, prompting a significant upward revision of its 2028 financial targets. Led by CEO Russell Ellwanger, the company now aims for $3.6 billion in revenue by 2028, up from $2.8 billion, and net profit of $1.2 billion, an increase from $750 million. This represents a 28.6% rise in revenue targets and a 60% increase in profit expectations compared to previous forecasts.
The expansion plan, supported by the Japanese government, focuses on Tower's silicon photonics platform, silicon germanium, and advanced optical packaging capabilities. It includes two parallel tracks: the first will add production capacity for 300mm silicon photonics wafers, with full production readiness expected by Q4 2027; the second involves constructing an additional 300mm fab adjacent to the existing one, contingent on certain conditions. The total investment for both tracks is estimated at around $3 billion net, after deducting approximately $1 billion in government grants.
Tower recently reorganized its Japanese operations under TPSCo, gaining full ownership of the 300mm fab. The company has also secured $1.3 billion in silicon photonics supply contracts for 2027, highlighting this technology as a key growth driver. Silicon photonics uses light to transmit data within chips, offering superior performance and speed, particularly suited for AI-era data centers handling massive data volumes.
CEO Russell Ellwanger emphasized the significance of the partnership with the Japanese government and the creation of a global center of excellence combining Tower's technological leadership with Japan's manufacturing quality and skilled workforce. He described the expansion as a foundation for sustained innovation, economic growth, and semiconductor industry leadership well beyond 2028. Tower's shares have surged over 400% in the past year, currently valuing the company at $26 billion on Nasdaq and the Tel Aviv Stock Exchange.
