TSEM · Tower Semiconductor Ltd.

Tower Semiconductor delivered strong Q1 2026 results with revenue of $414 million, reflecting 15% year-over-year growth driven by broad-based demand across key technology platforms including silicon photonics. Gross profit rose 52% to $111 million and operating profit nearly doubled to $65 million, indicating significant margin expansion from operational efficiencies and higher utilization. Net profit reached $65 million, boosting diluted EPS to $0.57 from $0.35 a year ago. Cash generation was robust at $225 million from operations excluding $290 million in silicon photonics customer prepayments, supporting $156 million in net capex. CEO Russell Ellwanger highlighted strong customer demand, expanding content opportunities in AI infrastructure, and strategic progress like the Japan restructuring for full Fab 7 ownership to advance 300mm capabilities. Q2 guidance points to a company-record $455 million revenue (±5%), up 10% sequentially and 22% year-over-year, with targets for continued quarter-over-quarter revenue and margin growth through 2026. Long-term visibility is bolstered by $1.3 billion in contracted 2027 silicon photonics revenue. S&P Maalot's upgrade to positive outlook on the 'ilAA' rating underscores improving credit profile amid profitable growth trajectory toward $2.8 billion annual revenue and $750 million net profit in 2028.