Tower Semiconductor surges to $15 billion valuation, tripling Intel’s abandoned bid
Shares are up more than 160% in six months as investors embrace the AI infrastructure story.
Tower Semiconductor’s shares surged again on Thursday, pushing the Israeli chipmaker past a $15 billion market capitalization.
The move caps a remarkable revaluation: Tower’s market value is now roughly three times the $5 billion price Intel agreed to pay for the company before abandoning the acquisition just over two years ago after regulators in China failed to grant approval. At the time, the collapse of the deal was widely seen as a setback for Tower. Today, it increasingly looks like a turning point.
Tower’s shares are up more than 160% over the past six months, including a sharp rise this year that has propelled the company to valuation multiples exceeding even those of Nvidia. The rally has transformed Tower from a long-overlooked specialty chipmaker into one of the most closely watched beneficiaries of the infrastructure build-out behind artificial intelligence.
For Russell Ellwanger, Tower’s CEO, the shift is visible not only in trading screens but on the factory floor. “I come home in the evening and my whole family, even my neighbors, talk to me about Tower stock,” he said in an interview with Calcalist last month. “They think I’m someone special.”
Ellwanger has run Tower for two decades, much of that time with little fanfare. For years, the company was viewed as a niche manufacturer of analog chips, solid, profitable, but peripheral to the industry’s main growth engines. That perception has changed as data centers strain under the demands of AI workloads, forcing a re-think of how information moves inside servers.
Tower has placed a large bet on silicon photonics, a technology that replaces traditional copper connections with light-based data transmission. As GPU processors push ever larger volumes of data, copper has become a bottleneck, both in speed and in power consumption. Photonics, by contrast, allows far higher throughput at lower energy cost, a constraint that has emerged as one of AI’s most pressing problems.
The company recently announced a $300 million expansion of its silicon photonics production lines, on top of a $350 million investment disclosed earlier this year. Much of that capacity is being built in Migdal HaEmek, Tower’s main manufacturing site in northern Israel, which is set to become the company’s largest photonics hub.
Ellwanger argues that the market is only beginning to grasp the implications. Once the expansion is completed in the first half of 2026, Tower expects to triple revenue from photonics-related activity, approaching $1 billion annually from AI-linked products alone. By the end of 2026, he estimates that 40% to 45% of Tower’s revenue will come from data-center applications.
That outlook helps explain the market’s enthusiasm. Even before the new capacity comes online, Tower has guided for record quarterly revenue of $440 million in the fourth quarter, putting full-year 2025 revenue at $1.5 billion, up 14% year-on-year. Profitability is expected to approach $200 million, a notable figure for a hardware manufacturer.
The stock’s surge has also reframed the narrative around Intel’s failed takeover. When the deal collapsed, Tower received $350 million in compensation, but lost what many saw as a guaranteed exit. With hindsight, employees and investors increasingly view the outcome differently. Tower retained its independence, continued investing aggressively during the prolonged regulatory review, and emerged positioned squarely in one of the most critical segments of AI infrastructure.
