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Home > Finance > Tower Semiconductor beats quarterly profit estimates on AI-driven chip demand

Tower Semiconductor beats quarterly profit estimates on AI-driven chip demand

Published by Global Banking & Finance Review®

Posted on February 11, 2026

2 min read

Last updated: February 11, 2026

Tower Semiconductor beats quarterly profit estimates on AI-driven chip demand - Finance news and analysis from Global Banking & Finance Review

Tags:technology innovation customers financial services investment

Quick Summary

Tower Semiconductor's Q4 profits surpassed expectations, driven by AI chip demand. The company is investing heavily in silicon photonics technology.

Tower Semiconductor Surpasses Q4 Profit Projections Amid AI Chip Demand

Quarterly Performance and Future Outlook

Feb 11 (Reuters) - Israeli contract chipmaker Tower Semiconductor beat Wall Street expectations for fourth-quarter profit on Wednesday, helped by demand for its chips for fast data transmission in artificial intelligence infrastructure.

Investment in Silicon Photonics

U.S.-listed shares were up nearly 5% in premarket trading.

Revenue and Profit Figures

Demand for Tower's silicon photonics technology, which transmits data at high speeds using light, has made it an important supplier as data center operators race to build infrastructure capable of handling complex AI workloads.

Market Response

The company is making an additional $270 million investment in equipment for silicon photonics chips, it said on Wednesday, taking the total spending on the high-speed technology to $920 million.

Tower aims to make over five times as many of these chips per month by the end of 2026 as it shipped in late 2025, CEO Russell Ellwanger said, adding that customers have already agreed to buy that additional volume.

The company forecast first-quarter revenue of $412 million, plus or minus 5%, compared with estimates of $408.4 million, according to data compiled by LSEG.

It reported revenue of $440.2 million for the fourth quarter, compared with estimates of $439.8 million.

Adjusted profit for the quarter came in at 78 cents per share, beating estimates of 68 cents per share.

Tower also makes analog semiconductor wafers for other companies in the U.S., Israel, Japan and Italy.

(Reporting by Anhata Rooprai in Bengaluru; Editing by Sahal Muhammed)

Key Takeaways

•Tower Semiconductor beat Q4 profit estimates.
•AI infrastructure drives chip demand.
•Significant investment in silicon photonics.
•Shares rose nearly 5% in premarket trading.
•First-quarter revenue forecast at $412 million.

Frequently Asked Questions about Tower Semiconductor beats quarterly profit estimates on AI-driven chip demand

1What is silicon photonics?

Silicon photonics is a technology that uses silicon as a medium to transmit data using light, enabling high-speed data transmission crucial for AI infrastructure.

2What is adjusted profit?

Adjusted profit refers to a company's earnings that have been modified to exclude certain one-time expenses or income, providing a clearer view of ongoing profitability.

Quarterly Performance and Future Outlook

Investment in Silicon Photonics

U.S.-listed shares were up nearly 5% in premarket trading.

Revenue and Profit Figures

Market Response

The company is making an additional $270 million investment in equipment for silicon photonics chips, it said on Wednesday, taking the total spending on the high-speed technology to $920 million.

The company forecast first-quarter revenue of $412 million, plus or minus 5%, compared with estimates of $408.4 million, according to data compiled by LSEG.

It reported revenue of $440.2 million for the fourth quarter, compared with estimates of $439.8 million.

Adjusted profit for the quarter came in at 78 cents per share, beating estimates of 68 cents per share.

Tower also makes analog semiconductor wafers for other companies in the U.S., Israel, Japan and Italy.

(Reporting by Anhata Rooprai in Bengaluru; Editing by Sahal Muhammed)

Frequently Asked Questions

1What is silicon photonics?

Silicon photonics is a technology that uses silicon as a medium to transmit data using light, enabling high-speed data transmission crucial for AI infrastructure.

2What is adjusted profit?

Adjusted profit refers to a company's earnings that have been modified to exclude certain one-time expenses or income, providing a clearer view of ongoing profitability.