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3d ago

Tower Semiconductor Pledges $3 Billion to Build 300mm Photonics Capacity in Japan

Japanese government grants will determine whether Tower can scale 300mm photonics capacity to meet AI/data‑center demand.

An operator handles a pod containing silicone chips in the clean room of Israeli analog integrated circuits developer, Tower Semiconductor at their offices in Migdal HaEmek, northern Israel, February 28, 2022. Picture taken on February 28, 2022. REUTERS/Amir Cohen
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Overview

  • Tower announced a $3 billion Japan investment package that includes about $1 billion in expected government grants and targets expanded production of silicon photonics and silicon‑germanium.
  • The company plans to convert its Arai site (former Fab 6) to 300mm silicon photonics with full operations planned by the fourth quarter of 2027.
  • Tower said it will unwind its JV with Nuvoton so Tower gains full ownership of 300mm Fab 7 while Nuvoton takes 200mm Fab 5 for $25 million, with the transfer aimed to close April 1, 2027 pending regulatory approvals.
  • The firm raised its 2028 outlook to roughly $3.6 billion in revenue and $1.2 billion in net profit, tying that upgrade to the new capacity while warning that grants and approvals remain contingent.
  • The move follows Tokyo’s push to reshore chip making using METI subsidies and could expand local supply for AI and data centers, create factory jobs in Japan, and shift specialty foundry capacity away from 200mm lines.