Tower Semiconductor Revenue Jumps 33% to Record $526 Million
Key Facts
Tower Semiconductor reported record third-quarter 2026 revenue of $526 million, up 33% year over year from $396 million in the same period of 2025. The company said gross profit also reached a record $179 million, up 92% from $93 million a year earlier. Operating profit, excluding nonrecurring items, was $127 million, or 2.5 times its level of $51 million in the year-earlier quarter. Net profit, excluding nonrecurring items, reached $120 million, or 2.2 times the $54 million recorded a year earlier. Net profit margin was 23%, while basic earnings per share were $1.06 and diluted earnings per share were $1.05.
Actual revenue came in above the company’s previous third-quarter guidance of $520 million, which implied expected year-over-year growth of 31%. Revenue in the second quarter of 2026 was $460 million, up 24% year over year, according to the company’s statement. In that quarter, gross profit was $138 million, up 72% from $80 million in the second quarter of 2025. The comparison between the two quarters shows faster growth in revenue and gross profit in the third quarter, alongside record operating and net profitability metrics. Chief Executive Russell Ellwanger said the company is entering “the strongest growth phase in its history,” referring to the guidance it issued for the following period.
Tower forecast fourth-quarter 2026 revenue of $600 million, with a range of 5% above or below that figure. The midpoint implies year-over-year growth of 36% and a sequential increase of 14%, the company said. Ellwanger said this trajectory would bring the company to annual revenue of $2 billion in 2026 and a quarterly revenue run rate of $2.4 billion. The guidance puts the expected revenue level for the coming period above the record third-quarter result. The company is scheduled to discuss its results and fourth-quarter guidance on a call on November 2, 2026, at 10:00 a.m. Eastern Time, or 5:00 p.m. Israel time.
The company’s growth plans include silicon photonics, where it is targeting a revenue run rate of $1.1 billion in the fourth quarter of 2026 from that activity alone, equivalent to five times its annual revenue in 2025. In May, Tower announced contracts with its largest customers for $1.3 billion in silicon photonics revenue in 2027, along with $290 million in customer advance payments to reserve production capacity. In July, it announced a strategic expansion in Japan of its 300 mm wafer manufacturing capabilities in silicon photonics, silicon germanium and advanced packaging. The company said the expansion is supported by the Japanese government and responds to customer demand. These steps provide context for the fourth-quarter guidance and capacity targets outlined by the company.
Cash generated from operating activities was $185 million in the third quarter, compared with $139 million in the same period of 2025. Meanwhile, net investment in property and equipment reached $191 million, compared with $103 million a year earlier. The figures reflect simultaneous increases in operating cash and spending on property and equipment over the comparable period. The company’s shares, listed under the ticker TSEM, closed at $166.48 on October 30, 2026. The closing price figure did not include the session’s high or low.