EL7.AI
StocksMedium•24 October 2026•
3 min read

Tower Posts Record $460 Million Revenue, Targets $3.6 Billion in 2028

Key Facts

1Second-quarter 2026 revenue reached a record $460 million, up 24% year over year.
2Net profit rose to $91 million, with a 20% margin in the second quarter of 2026.
3The annualized revenue run rate for silicon photonics reached $680 million in the second quarter, compared with $180 million a year earlier.
4The company signed silicon photonics contracts for $1.3 billion in 2027 revenue and received $290 million upfront to reserve capacity.
5Tower targets revenue of $3.6 billion and net profit of $1.2 billion in 2028.

Tower Semiconductor posted record revenue of $460 million in the second quarter of 2026, up 24% year over year, according to the company’s results statement. Gross profit rose to $138 million, up 72% from $80 million in the same period of 2025. Operating profit reached $90 million, 2.3 times its level of $40 million a year earlier, excluding nonrecurring items. The company said record net profit was $91 million, with a 20% margin, while earnings per share were $0.80 basic and $0.79 diluted. Results came amid demand momentum across its main business units, with silicon photonics standing out as a growth driver.

Company data showed that the annualized revenue run rate for silicon photonics reached $680 million in the second quarter of 2026, compared with $180 million in the second quarter of 2025. Tower plans to exceed an annualized run rate of $1 billion in the fourth quarter of 2026. The figures show the business has expanded from its level a year earlier, while the company said overall growth came amid demand momentum across its main business units. Tower announced in May that it had signed silicon photonics contracts with its largest customer for expected revenue of $1.3 billion during 2027. The company received $290 million in customer prepayments to reserve production capacity tied to those contracts.

Contracted reservations extend beyond 2027: Tower said customers’ contractual commitments for 2028 wafers are larger, with additional related prepayments due by January 2027. The company said its silicon photonics customer base includes more than 50 active customers across a range of applications. Tower raised its 2028 target model to revenue of $3.6 billion and net profit of $1.2 billion, saying customers had booked all available production capacity. The company links this model to expanding its ability to meet demand, while the contracts and prepayments entail future production commitments. These targets remain tied to converting reservations into production and revenue on the schedule announced by the company.

The capacity plan includes an expansion in Japan, where the company expects the first phase to be fully production-ready during the fourth quarter of 2027. The additional facility is also expected to begin making a significant financial contribution in 2029. In the second quarter, cash generated from operating activities was $177 million, compared with $123 million in the same period of 2025. Net investment in property and equipment was $187 million, compared with $111 million a year earlier. The figures put cash flow and capital spending alongside profit growth, while the expansion forms part of preparations for the production capacity reserved by customers.

For the near-term outlook, Tower guided to third-quarter 2026 revenue of $520 million, with a 5% margin of increase or decrease. The midpoint of the guidance range represents year-over-year growth of 31% and a quarterly increase of 13%, according to the company’s statement. The company described the level as a record, following second-quarter revenue of $460 million. The company’s shares, listed under the ticker TSEM, closed at $167.56 on October 23, 2026, according to EL7 data. Tower is scheduled to report third-quarter results on November 2, 2026, and discuss fourth-quarter guidance alongside the results.