Tower Semiconductor has reported strong financial results for the fourth quarter and full-year 2025, highlighting the growing impact of artificial intelligence infrastructure on its specialty semiconductor business. The company is doubling down on silicon photonics and high-value analog technologies to position itself as a key foundry for the AI economy.
Tower Semiconductor Q4 and full-year 2025 results
Tower Semiconductor generated Q4 2025 revenue of $440 million, representing 14 percent year-over-year growth and 11 percent sequential growth. The company said the surge was driven by explosive demand for AI-related infrastructure and high-speed data center connectivity.
For the full year, Tower Semiconductor reported revenue of $1.57 billion, up from $1.44 billion in 2024, reflecting 9 percent annual growth.
Looking ahead, Tower expects Q1 2026 revenue of $412 million (plus or minus 5 percent), which would represent 15 percent growth compared with Q1 2025.
CEO Russell Ellwanger said the company delivered its highest-ever quarterly revenue alongside improved profitability, supported by growth across all major technology platforms and strong performance from its silicon photonics business.
Silicon photonics and SiGe drive AI infrastructure growth
Tower Semiconductor’s strongest momentum came from its high-value analog and connectivity technologies.
Silicon photonics becomes the main growth engine
Silicon Photonics and Silicon Germanium platforms are now the company’s primary growth drivers. Silicon photonics revenue more than doubled in 2025 compared with 2024, fueled by rapid adoption of 1.6T optical transceivers in AI data centers. Tower is currently the primary provider of foundry services for these high-speed optical modules.
RF infrastructure gains momentum
The RF infrastructure business also saw strong demand. Growth in the Silicon Germanium platform was supported by rising global data transmission needs as AI workloads expand.
Core analog platforms remain stable growth base
Tower’s traditional specialty analog platforms continue to provide stability and profitability. Power management, CMOS image sensors and 65nm RF mobile technologies all recorded year-over-year growth, forming a strong foundation for higher-margin AI-related segments.
Strategy focuses on becoming a foundry for the AI economy
Tower Semiconductor is reshaping its global manufacturing footprint to support long-term AI infrastructure demand.
Global fab expansion and repurposing
The company is investing heavily across fabs in the United States, Israel, Japan and Italy. These facilities are being repurposed to produce a richer mix of silicon photonics and Silicon Germanium products.
Customer-funded capacity growth
More than 70 percent of Tower’s planned capacity through 2028 is already reserved or in the process of being reserved by customers, often supported by prepayments. This approach reduces financial risk while ensuring long-term demand visibility.
Technology roadmap targets faster interconnects
Tower is focusing on 300mm silicon photonics and next-generation Silicon Germanium to support the transition toward 1.6T and future 3.2T data center interconnect technologies.
Tower Semiconductor boosts capex to $920 million
To meet surging AI-driven demand, Tower Semiconductor significantly increased its investment plans.
Total Capex plan raised to $920 million from $650 million
Additional $270 million allocated for silicon photonics equipment and next-generation capabilities
Target to achieve silicon photonics wafer capacity by December 2026 that is more than five times the Q4 2025 monthly run-rate
In fiscal 2025, Tower invested $437 million in property and equipment.
AI infrastructure demand reshapes Tower Semiconductor’s future
Tower Semiconductor’s results highlight how AI data center growth is transforming the specialty semiconductor industry. The company’s focus on silicon photonics, high-speed connectivity and customer-funded expansion positions it to capture the next wave of AI infrastructure spending while improving profitability and long-term visibility.
BABURAJAN KIZHAKEDATH
