“A market that could reach a billion dollars”: Tower reveals a milestone with Marvel

Together, the two provided customers with over 5 million coherent optical communication chips (Coherent PICs) based on Tower’s advanced Silicon Photonics (SiPho) platform. These are chips suitable for fast connectivity between data centers (data center interconnect) for artificial intelligence – a rapidly growing field.

However, this is not just a milestone, and the announcement also hints at future growth, when Dr. Radha Nagarjan, Senior Vice President and VP of Optical Technologies at Marvel stated that “As a supplier and a key partner in our ecosystem, we look forward to continuing our collaboration with Tower and promoting together the next generation of innovative coherent optical communication technologies. This collaboration will help bring to the market advanced, efficient and high-performance photonics solutions that support advanced artificial intelligence needs.”

In a conversation with Globes, Tower CEO Russell Ellwanger elaborates on the opportunities ahead. “The announcement we published today is particularly important,” said Ellwanger. He mentioned a major industry conference held about two weeks ago in Taiwan, Nvidia CEO Jensen Huang said that Marvell is very critical to all AI infrastructures and estimated that it will become the next company to reach a trillion dollars (compared to about 254 billion today).

Marvel and Tower collaborate on a variety of technological developments that support the advancement of the next generation of coherent chips and the advancement of the performance and applicability of silicon photonics platforms for optical communication. The company’s announcement states that the unique chips (Coherent PICs) enable extremely precise control that enables fast optical communication over long distances with high performance.

“A great and exciting story”

Ellwanger notes that Tower has a field of activity called TFLN, which is an advanced material for use in very high-speed optical modulators with low energy consumption. Tower embeds the TFLN and connects it to the silicon wafer (wafer) with the connection and the wafer manufactured in Tower, and according to him this connection presented results that no one else on the market has.

According to Ellwanger, according to what they see, the data center interconnect market is growing 5 times, and in the advanced materials (like TFLN) the pricing per wafer is almost double. “It’s a market that alone could reach $1-1.2 billion, beyond all the SiPho business we have right now,” says Ellwanger. This is a business that in 2025 will reach revenues of approximately 238 million dollars for Tower, while Marvel’s share was only a small part of those revenues, and which the company recently announced that it signed contracts of over 1.3 billion dollars for the next year. “It’s a very big and very exciting story,” says Ellwanger.

You previously announced goals for 2028 that include revenues of $2.8 billion and a net profit of $750 million. In light of the developments, will these goals be achieved sooner?
“These goals are a central focus of the company. It is possible that the rate of revenue and profit will arrive sooner, but we are talking at the annual level of 2028,” says Alvanagar and emphasizes that these are goals and not a forecast.

The stock is not stopping and has already risen by 570% in the last year?
“I don’t think I’m the one who should talk about the value. We’re in a wonderful position, and certainly when you look at the model we’ve presented, the value has room to grow. We’re looking at additional new things beyond everything we’ve announced.”

One of them is the fact that Tower is awaiting the approval of the government in Japan for a grant to expand further in the country, after it announced full ownership of its 300 mm factory in Japan and intends to expand production capacity there. “I look forward to reporting on the company’s steps that could accelerate or add beyond the current model,” he says.