Tower Semiconductor beats quarterly profit estimates on AI-driven chip demand
A silicone semiconductor is seen at the offices of Israeli analog integrated circuits developer, Tower Semiconductor in Migdal HaEmek, northern Israel, February 28, 2022. REUTERS/Amir Cohen
Feb 11 : Israeli contract chipmaker Tower Semiconductor beat Wall Street expectations for fourth-quarter profit on Wednesday, helped by demand for its chips designed for fast data transmission in artificial intelligence infrastructure.
U.S.-listed shares of the company were up nearly 4 per cent in early trading.
Demand for Tower's silicon photonics technology, which transmits data at high speeds using light, has made it an important supplier as data center operators race to build infrastructure capable of handling complex AI workloads.
The company is making an additional $270 million investment in equipment for silicon photonics chips, it said on Wednesday, taking the total spending on the high-speed technology to $920 million.
Tower aims to make over five times as many of these chips per month by the end of 2026 as it shipped in late 2025, CEO Russell Ellwanger said, adding that customers have already agreed to buy that additional volume.
The company forecast first-quarter revenue of $412 million, plus or minus 5 per cent, compared with estimates of $408.4 million, according to data compiled by LSEG.
It reported revenue of $440.2 million for the fourth quarter, compared with estimates of $439.8 million.
Adjusted profit for the quarter came in at 78 cents per share, beating estimates of 68 cents per share.
Tower also makes analog semiconductor wafers for other companies in the U.S., Israel, Japan and Italy.
