Tower Semiconductor CEO Says the Company's Biggest Growth Phase Has Arrived

Tower Semiconductor Ltd. (NASDAQ:TSEM) stock traded higher in Monday’s premarket session after the Israeli chipmaker reported record third-quarter 2026 results that beat Wall Street estimates and issued strong fourth-quarter guidance.

Adjusted earnings of $1.15 per share beat the analyst estimate of $1.08.

Revenue jumped 33% year over year to a record $526.161 million, topping the $520.157 million analyst estimate. Sales also rose 14.4% sequentially from $460.079 million.

Profit Surges As Margins Expand

Gross profit surged 92% year over year to $178.759 million from $93.045 million. Gross margin expanded to 34% from 23.5%.

Operating profit more than doubled to $127.135 million from $50.580 million a year earlier.

Net profit attributable to the company climbed to $120.256 million from $53.645 million. GAAP diluted earnings rose to $1.05 per share from 47 cents.

Adjusted net profit reached $131.298 million, compared with $62.756 million a year earlier.

Operating cash flow totaled $185.159 million, while capital expenditures reached $190.683 million.

Tower ended September with $250.748 million in cash and cash equivalents and $1.222 billion in short-term deposits.

Strong Demand Drives Record Outlook

Tower forecast fourth-quarter revenue of $600 million, plus or minus 5%. The midpoint represents 36% year-over-year growth and a 14% sequential increase.

CEO Russell Ellwanger said the company is entering its strongest growth phase, with annual revenue expected to reach $2 billion in 2026.

He expects strong demand for high-speed connectivity technologies, particularly silicon photonics and silicon germanium, to support continued growth.

Tower expects its silicon photonics business to reach a $1.1 billion annualized revenue run rate in the fourth quarter, five times its 2025 annual revenue.

The company said its manufacturing expansion in Japan is progressing ahead of schedule. Customer contracts extending through 2029 also support its longer-term revenue and margin goals.

Management expects to enter 2027 with sequential revenue growth despite the semiconductor industry’s typical first-quarter seasonal slowdown.

TSEM Price Action: Tower Semiconductor shares were up 2.49% at $170.62 at the time of publication on Monday, according to Benzinga Pro data.

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