Tower shows a record in sales and surpasses the forecasts

After eight Tower Weakened by about 26% from the June peak, the chip maker publishes its second quarter reports. The revenues amounted to 460 million dollars and the bottom line recorded an adjusted net profit of 88 cents per share, higher than the analysts’ forecasts of revenues of approximately 455 million dollars and a profit of 76 cents per share. The stock first jumped by more than 6% in early trading on Wall Street, but later most of them were erased and it moved to declines. The stock also erases almost all the gains it recorded at the beginning of the trading day on the Tel Aviv Stock Exchange.

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The results for the quarter reflect a growth of 24% compared to the corresponding quarter, and record sales in the company. The record is expected to be broken in the third quarter: Tower expects revenues of 520 million dollars, a growth of 31% from the corresponding quarter. This is about revenues that are about 6% higher than analysts’ forecasts.

In the second quarter, Tower registered a 39.6% growth in net profit, which amounted to 90.8 million dollars. Adjusted net profit attributable to shareholders increased by 35.2% and reached approximately $101 million. During the second quarter, Tower generated $177 million from current operations, and at the end of the quarter it had cash and investments in the amount of nearly $1.5 billion, compared to long-term debt of $125 million.

CEO Russell Ellwanger said: “Against strong and continuous demand in Tower’s core activities, we achieved sales and profitability records in the second quarter, while continuing to establish and strengthen our position as technological leaders and expanding production capacity during the year 2026. In addition, we announced additional significant strategic investments to expand production capacity, as a direct response to the accelerating demands from our customers.”

Ellwanger pointed out that in the technology ofSiPho (Silicon Photonics), the company recorded triple-digit growth in sales compared to the corresponding quarter, with an annual sales rate of $680 million, compared to a rate of $180 million in the corresponding quarter. According to him, Tower expects to “cross the billion dollar threshold at an annual sales rate as early as the fourth quarter of 2026 and to continue on a significant growth path during 2027 as well.”

As a reminder, with the publication of the previous reports, Tower reported that it received supply contracts in the field worth 1.3 billion dollars for 2027; Tower later announced the expansion of production capacity in Japan, in a way that will support, among other things, the production of silicon photonics technology. When Tower updated on this, she raised the financial goals she had set for herself for 2028. The company set a revenue target of $3.6 billion compared to $2.8 billion previously, and the net profit target for 2028 rose from $750 million to $1.2 billion. Ellwanger addressed this now, saying that these targets are “fully supported by strong demand from our customers.” The deep and long-term strategic partnerships with our customers generate stable and sustainable growth for both our customers and Tower, and enable the continued creation of significant value for the company’s shareholders.”

We note that the latest weakness in Tower shares came after a jump of about 170% from the beginning of the year to the peak set in June. At the same time, the chip index, which rose by about 107% until the June peak, has since weakened by about 22%. Tower’s market value before the reports were published was $26.5 billion.