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Tower Semiconductor to invest $3 billion in Japan expansion
The plan is backed by $1 billion in Japanese government grants and includes a 300mm silicon photonics plant at the Arai facility, targeting full operations by Q4 2027.
Tower Semiconductor plans to invest $3 billion to expand its manufacturing footprint in Japan, a move the company says is among the largest investments in its history. Yahoo Finance reports the expansion is supported by $1 billion in government grants, and it is designed to scale production of silicon photonics, silicon-germanium, and advanced packaging technologies tied to AI infrastructure, data centers, and optical networking.
The project is set up in two phases. In the first phase, Tower plans to convert its Arai facility into a 300mm silicon photonics manufacturing plant, with full operations expected by the fourth quarter of 2027, while the second phase involves building a new 300mm fabrication facility in Japan.
Tower management said the investment will materially expand capacity and help capture accelerating demand from AI infrastructure customers. The company also raised its 2028 financial outlook, and the announcement lifted TSEM shares, with Yahoo Finance noting the stock rose after the July 14 disclosure and had already gained significantly in 2026, including a 109.5% increase year to date as of mid-July.
Tower Semiconductor is a specialty chip foundry focused on high-value analog and mixed-signal technologies, including silicon photonics, RF CMOS, and power management solutions. It is headquartered in Migdal Haemek, Israel, and has a reported market capitalization of $28.2 billion.