Chipmaker Tower reports record quarter as silicon photonics drives growth
Revenue jumped 14% as profits surged across all metrics. Tower shares have surged by over 170% over the past year to a record market cap of more than $15 billion.
Chipmaker Tower Semiconductor released its results for the final quarter of 2025 and for the full year on Wednesday, reporting positive performance that reflects broad growth across most financial parameters. Revenue from operations reached $440 million in the quarter, an increase of 14% compared with the corresponding quarter in 2024. According to the company, the results met expectations and continued the improvement trend that began at the start of the year. Tower shares have surged by over 170% over the past year to a record market cap of more than $15 billion.
Gross profit rose 27% to $118 million, while operating profit increased 39% to $71 million. Net profit totaled $80 million, up 48% year over year, with earnings per share of 71 cents. For the full year, Tower’s revenue climbed 9% to $1.6 billion, and net profit strengthened 6% to $220 million.
The company also issued guidance for the start of 2026. For the first quarter, the current quarter, Tower expects revenue of $412 million, representing a projected 15% increase compared with the same period last year, with a deviation range of 5% in either direction.
Alongside previously announced capital expenditure plans of $650 million, Tower revealed an additional expected investment of $270 million in infrastructure for the production of silicon photonics components. Last week, the company announced a collaboration with Nvidia, under which Tower will supply these components for the chip giant’s products.
Tower CEO Russell Ellwanger said: “We ended 2025 having achieved our highest-ever quarterly revenue with a substantial increase in profitability. This was driven by a strong base where each of our key technology platforms provided growth, combined with exceptional performance and strong incremental margins of our market-leading SiPho platforms. We previously announced a $650 million CapEx investment, targeted to be fully qualified in the second half of 2026. 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. The resultant of the $920 million total investment targets December 2026 SiPho wafer starts capacity greater than five times the actual fourth quarter 2025 SiPho wafer monthly shipments, with customer committed consumption.”
