Tower Semiconductor Guides Fourth Quarter To $600 Million After Record $526 Million Third Quarter
The chip foundry targets a $1.1 billion annualized run rate in silicon photonics alone in the fourth quarter, its CEO said.
Tower Semiconductor, a specialty chip foundry, posted record third-quarter revenue of $526 million, up 33% from $396 million a year earlier, and guided fourth-quarter revenue to $600 million, the company said in its Monday release. At the midpoint, that guidance would put 2026 revenue at $2 billion.
Profit rose faster than sales
Gross profit hit a record $179 million, 92% above $93 million in the third quarter of 2025. Operating profit, excluding non-recurring items, was a record $127 million, 2.5 times the $51 million of a year earlier.
Net profit excluding non-recurring items was a record $120 million, a 23% net margin, or $1.06 basic and $1.05 diluted per share. That is 2.2 times the $54 million of the year-earlier quarter.
Operating cash flow was $185 million, against $139 million a year earlier. Net investment in property and equipment was $191 million, up from $103 million, as Tower builds capacity.
A $600 million quarter ahead
Tower guided fourth-quarter revenue to $600 million, give or take 5%. The midpoint is 36% above a year earlier and 14% above the third quarter.
CEO Russell Ellwanger said the company is "entering the strongest growth phase in our history," closing the year at $2 billion in revenue and a $2.4 billion annualized run rate. He said Tower targets a start to 2027 that avoids the usual first-quarter industry seasonality.
Demand for silicon photonics and silicon-germanium chips, which serve infrastructure, is driving growth in high-speed connectivity, Ellwanger said. Tower targets an annualized $1.1 billion run rate in silicon photonics revenue alone in the fourth quarter, five times its 2025 annual silicon photonics revenue.
Capacity and a sliding stock
Tower makes silicon wafers to customers' designs, with specialties including silicon photonics, radio frequency, power management and image sensors, and sells no chips of its own. Ellwanger said the Japan 300mm buildout is progressing ahead of schedule, with customer contracts being extended through 2029.
Tower's U.S.-listed shares closed at $166.48 on Friday, down about 11% in a session when chip stocks sold off, according to Benzinga. Market value stood at $18.9 billion.
Tower holds its investor call at 10:00 a.m. Eastern on Monday.
Sources
- Form 6-K — Guiding fourth quarter revenue of $600 million, 36% year-over-year growth MIGDAL — SEC EDGAR
- Black Friday Came Early for Chipmakers: Intel and 10 Other Stocks Are More Than 20% Off This Month — benzinga.com
- Tower Semiconductor Reports Third Quarter Record Results, — globenewswire.com
