Tower Semiconductor posts upbeat revenue forecasts on data-center boom, shares rise
The logo of Israeli analog integrated circuits developer, Tower Semiconductor is seen at their offices in Migdal HaEmek, northern Israel, February 28, 2022. Picture taken on February 28, 2022. REUTERS/Amir Cohen
Israeli contract chipmaker Tower Semiconductor on Monday forecast fourth-quarter revenue above estimates, banking on strong demand for its chips used in data centers and AI infrastructure, sending its U.S.-listed shares up 15 per cent.
The shares hit their highest in more than two decades following the results, after surging 63.2 per cent this year.
The company expects quarterly revenue of $440 million, plus or minus 5 per cent, compared with analysts' average estimate of $434.4 million, according to data compiled by LSEG.
Tower has been gaining share in fast-growing segments such as radio-frequency (RF) infrastructure as well as other cloud network and data-transmission-related platforms.
The company has been expanding its manufacturing capacity across Israel, U.S., Italy and Japan.
Tower manufactures analog and mixed-signal semiconductors for customers across industries including automotive, industrial, consumer electronics and communications.
CEO Russell Ellwanger said the market for its technologies essential for high-speed optical data transmission, combined with rising data center demand, is fueling strong growth.
Tower said it is investing an additional $300 million to expand the capacity and advance next-generation capabilities in its Silicon-Germanium and Silicon Photonics technologies, essential for high-speed optical data transmission.
Tower reported revenue of $395.7 million for the quarter ended September 30, topping expectations of $394 million.
Its quarterly adjusted earnings of 55 cents per share also beat estimates of 54 cents.
