Tower Semiconductor Q1 2026 Results Rise on Silicon Photonics Demand

Tower Semiconductor reported stronger-than-expected results for the first quarter of 2026 and issued second-quarter revenue guidance above expectations, driven largely by growing demand for silicon photonics used in artificial intelligence data centers. The Israel-based chip foundry said it secured silicon photonics agreements expected to generate $1.3 billion in revenue for 2027, along with $290 million in upfront customer payments to reserve manufacturing capacity. Following the announcement, the company’s shares rose more than 17% in early trading and reached a 52-week high of 267.42.

For the quarter ended March 31, Tower Semiconductor posted revenue of $413.6 million, up 15% year over year, slightly above analyst estimates. Adjusted earnings came in at 65 cents per share, ahead of expectations, while gross profit increased 52% to $111.0 million. Operating profit nearly doubled, rising 96% to about $65 million. The company also reported gross margin expanding to roughly 26.8% from 20.4% a year earlier.

Tower said it expects second-quarter 2026 revenue of $455 million, plus or minus $5 million. Executives characterized the projection as the highest quarterly revenue in the...