Tower Semiconductor reported record fourth quarter 2025 revenue of $440 million, up 14% year-over-year and 11% sequentially, as demand for silicon photonics (SiPho) and SiGe platforms accelerated. The company delivered gross profit of $118 million and operating profit of $71 million, compared to $93 million and $51 million, respectively, in the prior quarter. Net profit reached $80 million, or $0.71 per basic share, up from $54 million, or $0.48 per basic share, in Q3 2025.
For the full year, revenue totaled $1.57 billion, an increase of 9% from $1.44 billion in 2024. Gross profit rose to $364 million and operating profit to $194 million, while net income reached $220 million, or $1.97 per basic share. Operating cash flow for 2025 was $395 million, reflecting a $105 million prepayment tied to the Fab3 Newport Beach lease extension. Capital expenditures reached $437 million for the year, as the company expanded specialty technology capacity.
Tower also disclosed an additional $270 million in capital investments focused on SiPho capacity and next-generation capabilities, raising its total SiPho and SiGe expansion plan to $920 million. The company expects installation and qualification of the equipment to complete by the fourth quarter of 2026, with full wafer starts beginning in 2027. The planned expansion targets SiPho capacity exceeding five times the Q4 2025 annualized wafer shipment run rate, with more than 70% of the capacity reserved or in reservation through 2028, supported by customer prepayments. Tower guided Q1 2026 revenue to $412 million, plus or minus 5%, representing 15% year-over-year growth.
• Q4 2025 revenue: $440 million (+14% YoY, +11% QoQ)
• Q4 2025 net income: $80 million; $0.71 basic EPS
• Full-year 2025 revenue: $1.57 billion (+9% YoY)
• Full-year 2025 net income: $220 million; $1.97 basic EPS
• 2025 CapEx: $437 million
• Additional SiPho CapEx: $270 million (total SiPho/SiGe plan: $920 million)
• Target: >5× increase in SiPho capacity vs. Q4 2025 run rate
• Q1 2026 revenue guidance: $412 million ±5%
Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, said: “We ended 2025 having achieved our highest-ever quarterly revenue with a substantial increase in profitability. Considering our market position, and the extremely high adoption rate of SiPho for 1.6T transceivers, for which Tower is the primary provider, we announce today an additional $270 million investment for the expansion of SiPho capacity and capability.”
🌐 Analysis: Tower’s aggressive $920 million SiPho and SiGe investment underscores the shift toward optical interconnect scaling for 1.6T transceivers in AI-driven data center architectures. As hyperscalers accelerate 800G and 1.6T deployments, specialty foundries with established silicon photonics process maturity are positioning themselves as strategic supply chain anchors amid capacity realignments, including mediation with Intel over the New Mexico 300mm agreement.