Tower Semiconductor to invest $3 billion in Japan, backed by government grants

Reuters

Tue, July 14, 2026 astatine 5:10 AM CDT 1 min read

July 14 (Reuters) - Israeli chipmaker Tower Semiconductor said connected Tuesday it volition put $3 cardinal to ‌bolster spot manufacturing successful Japan, including $1 cardinal successful ‌grants from the Japanese government.

U.S.-listed shares of the institution roseate much ​than 18% successful premarket trading aft the announcement, which is expected to enactment increasing AI and information halfway demand.

The determination aims to assistance the company's accumulation ‌of silicon photonics - ⁠which uses airy to determination information faster betwixt AI chips - and silicon-germanium technology, which ⁠enables faster and much energy-efficient semiconductor devices.

The enlargement volition hap successful 2 phases, with the archetypal signifier involving ​converting Tower's ​Arai installation successful Japan, ​formerly Fab 6, for ‌300-millimeter silicon photonics production, with afloat operations expected by the 4th fourth of 2027.

Following this archetypal capableness expansion, Tower said it expects its 2028 gross to scope $3.6 cardinal and nett net to deed $1.2 billion, ‌compared with its erstwhile expectations of $2.8 ​billion successful gross and $750 cardinal ​in nett profit.

Tower ​said the 2nd signifier volition statesman ‌simultaneously with the first, to ​build an further ​300mm manufacturing installation adjacent to the company's existing Fab 7 facility.

"We expect way 2 to supply ​the way ‌for continued maturation acold beyond 2028," Tower CEO ​Russell Ellwanger said.

(Reporting by Jaspreet Singh successful Bengaluru; ​Editing by Vijay Kishore)