Tower Semiconductor said on Tuesday it will spend roughly $3bn expanding its 300mm operations in Japan, net of about $1bn in grants from the Japanese government, in a two-track build-out aimed squarely at the optical components that AI data centres are consuming faster than anyone can make them.
The announcement, made with the backing of Japan’s Ministry of Economy, Trade and Industry, covers silicon photonics, silicon germanium, and advanced optical packaging.
Tower is a specialist analog foundry rather than a logic manufacturer, which means it does not compete with TSMC for leading-edge nodes. It competes for the plumbing.
Track one repurposes the Arai facility, formerly Fab 6, for 300mm silicon photonics and packaging while pushing output at Fab 7 in Uozu to its maximum.
Full production readiness is expected in the fourth quarter of 2027. On the strength of that alone, Tower raised its 2028 model to $3.6bn of revenue and $1.2bn of net profit.
