Tower Semiconductor Shares Surge on AI Chip Demand

Tower Semiconductor (TSEM) has seen its U.S.-listed shares climb 15% after the Israeli chipmaker forecast stronger fourth-quarter revenue, driven by high demand for chips powering artificial intelligence (AI) and data-center networks. The surge marks the highest share price for Tower in more than two decades.

The company projects quarterly revenue around $440 million, plus or minus 5%, surpassing analyst expectations of $434.4 million. In the previous quarter ending September 30, Tower reported $395.7 million in revenue and adjusted earnings of 55 cents per share—slightly above market forecasts.

Rising Demand for AI and Data-Center Chips

Tower Semiconductor has emerged as a key supplier of specialized chips that facilitate high-speed optical data transmission. As companies worldwide continue building next-generation networks, the demand for Tower’s technology has accelerated.

CEO Russell Ellwanger highlighted that the company’s Silicon-Germanium and Silicon Photonics technologies are critical for fast and efficient data transfer in AI-driven systems, fueling the current revenue growth.

Expansion Plans Across Global Facilities

To meet the growing demand, Tower Semiconductor is expanding its production footprint across Israel, the United States, Italy, and Japan. The company has announced an additional $300 million investment aimed at boosting capacity and advancing its specialized chip technologies.

This strategic expansion is expected to reinforce Tower’s position in the global semiconductor market, particularly in sectors reliant on AI and high-speed data infrastructure.

Performance in Context

Tower Semiconductor’s recent performance aligns with broader trends in the semiconductor industry, where AI-related applications are driving a wave of growth. While the company faces competition from other chip manufacturers, its focus on niche technologies like Silicon-Germanium and Silicon Photonics sets it apart in the high-speed data market.

Analysts note that while Tower shows strong short-term performance, investors should weigh long-term valuations carefully, especially amid market volatility in tech sectors.