Tower Semiconductor plans a dual-track expansion of its 300mm manufacturing capabilities in Japan, supported by government funding, to meet rising demand for silicon photonics, silicon germanium and advanced packaging technologies. The investment is expected to strengthen semiconductor supply chains and support long-term revenue growth driven by AI and data center markets.
Tower Semiconductor has unveiled a two-phase expansion strategy for its 300mm manufacturing operations in Japan, backed by financial support from the Government of Japan, according to official disclosures. The initiative will expand production of silicon photonics (SiPho), silicon germanium (SiGe) and advanced optical packaging technologies, addressing increasing customer demand from artificial intelligence, cloud computing and high-speed connectivity applications.
The first phase involves converting the company's Arai facility into a dedicated 300mm silicon photonics and advanced packaging site while optimizing production at its existing Fab 7 plant in Uozu. Commercial production is scheduled to begin in the fourth quarter of 2027. Tower also updated its financial outlook, targeting revenue of USD 3.6 billion and net profit of USD 1.2 billion by 2028.
The second phase, which will proceed alongside the first after the completion of related agreements, includes constructing a new 300mm fabrication facility adjacent to Fab 7. The company expects the plant to significantly expand production capacity for silicon photonics and silicon germanium technologies, with earnings contributions anticipated from 2029.
Tower Semiconductor is an Israel-based specialty semiconductor foundry serving customers across industrial, automotive, infrastructure, consumer and medical markets. The company estimates the expansion will involve approximately USD 3 billion in investment, offset by around USD 1 billion in grants from the Japanese government, reinforcing Japan's semiconductor manufacturing ecosystem and supply chain resilience while supporting regional industrial development.
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