Tower Semiconductor signs $1.3B in AI chip deals, Q1 2026 earnings
Key takeaways
- Silicon photonics chips use light instead of electrical signals to transmit data, which makes them ideal for the high-speed needs of AI data centers.
- "We are confident in our path toward achieving our financial model targets of $2.8 billion in annual revenue and $750 million in net profit in 2028," CEO Russell Ellwanger said in a statement.
- The contracts were disclosed alongside Tower's first-quarter results, which showed revenue of $414 million, up 15% from the same period a year earlier.
Tower Semiconductor signs $1.3B in AI chip deals, Q1 2026 earnings Quartz · Bloomberg / Getty Images Colleen Cabili Wed, May 13, 2026 at 8:10 PM GMT+7 2 min read TSEM Tower Semiconductor signed $1.3 billion in silicon photonics contracts for 2027 revenue with its largest customers in that technology, the Israeli contract chipmaker said Wednesday, as demand for chips used in AI data center infrastructure drives rapid growth at the company.
Silicon photonics chips use light instead of electrical signals to transmit data, which makes them ideal for the high-speed needs of AI data centers. Customers buying silicon photonics capacity paid Tower $290 million upfront and have promised to increase their 2028 orders. Another round of advance payments is expected by January 2027.
"We are confident in our path toward achieving our financial model targets of $2.8 billion in annual revenue and $750 million in net profit in 2028," CEO Russell Ellwanger said in a statement.