Tower posts record Q4 revenue, adds $270M for silicon photonics; shares jump

Summary：Tower (TSEM) reported Q4 revenue of $440.2M and adj. EPS of $0.78, both above estimates, and added $270M to expand silicon photonics; Q1 revenue guide is about $412M.

Migdal HaEmek, Israel — Tower Semiconductor (NASDAQ: TSEM) saw its stock rise significantly in pre-market trading following the announcement of its fourth quarter 2025 results. The company delivered a strong combination of record revenue and profits that exceeded expectations, and further boosted its silicon photonics (SiPho) expansion plans related to AI data centers, making it a market focal point.

Performance Highlights: Both Revenue and Earnings Surpass Consensus

Tower reported fourth quarter revenue of $440.2 million, above the market consensus of approximately $434.2 million. Adjusted earnings per share were $0.78, also surpassing the expected $0.69. For the full year, the company's revenue in 2025 was about $1.57 billion, continuing to rise from $1.44 billion in 2024.

Acceleration in Expansion: An Additional $270 Million Investment, with the Aim to "Quintuple Silicon Photonics Capacity by End of 2026"

Within its growth narrative, Tower continues to focus on silicon photonics. The company announced an additional $270 million investment in SiPho capacity and capabilities, bringing total accumulated investment to approximately $920 million. The goal is to ramp up SiPho wafer startup/shipment capacity to more than five times the monthly level of Q4 2025 by the end of 2026.

Guidance and Order Visibility: Robust Outlook for Q1, Some Capacity Already "Locked In"

Looking ahead to the first quarter of 2026, Tower expects revenue of about $412 million (±5%), with a year-over-year growth estimate of approximately 15%. The company also disclosed that over 70% of the expanded capacity has been booked or is in processing through customer prepayments, with orders extending through 2028.

Variable Indicator: Intel 300mm Collaboration Agreement Changes, Process Returns to Japan's Fab7

However, amidst the positive earnings, uncertainties also arise. Tower mentioned that Intel expressed an intention not to fulfill the 300mm wafer manufacturing agreement signed in September 2023, which is now in mediation. Related customer processes previously transferred or in transfer will be redirected back to the company’s Fab7 in Japan for support.

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Written byTraderKnows

Created date:2026-02-11 14:10

Last Updated:2026-02-11 14:36

Independent Analysis: Manually researched and fact-checked by the TraderKnows Compliance Team, based on public regulatory records.

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