Tower Semiconductor Reports Record Revenue for the Fourth Quarter of 2025
Operating cash flow in the fourth quarter totaled $40 million, reflecting the inclusion of a previously announced $105 million lease extension prepayment for Fab3 in Newport Beach, California.
Tower Semiconductor reported record financial results for the fourth quarter of 2025, delivering revenue of $440 million, an increase of 14% year-over-year and 11% quarter-over-quarter. The company achieved its stated goal of sequential revenue growth throughout 2025, with momentum accelerating in the second half of the year. As a result, fourth-quarter revenue was 23% higher than the first quarter.
Gross profit for the quarter reached $118 million, while operating profit rose to $71 million, up from $93 million and $51 million respectively in the third quarter. Net profit also climbed significantly to $80 million, translating to $0.71 basic and $0.70 diluted earnings per share, compared with $54 million, or $0.48 per share, in the prior quarter.
Operating cash flow in the fourth quarter totaled $40 million, reflecting the inclusion of a previously announced $105 million lease extension prepayment for Fab3 in Newport Beach, California. Capital investments in property and equipment were $111 million during the quarter.
Full-Year 2025 Performance
For the full year 2025, Tower Semiconductor generated revenue of $1.57 billion, representing 9% growth compared with $1.44 billion in 2024.
Gross profit for the year was $364 million, operating profit totaled $194 million, and net profit reached $220 million, or $1.97 basic and $1.94 diluted earnings per share. This compares with net profit of $208 million, or $1.87 per share, in 2024.
Operating cash flow for the year was $395 million, again including the Fab3 lease extension prepayment. Total investments in property and equipment were $437 million, while net debt repayments amounted to $33 million.
Business Outlook for 2026
Looking ahead, Tower expects first-quarter 2026 revenue of approximately $412 million, plus or minus 5%, representing 15% year-over-year growth.
Major CapEx Expansion in SiPho and SiGe
Demand for silicon photonics (SiPho) and SiGe technologies continues to rise sharply. In addition to its previously announced $650 million capital expenditure plan, the company is now committing an additional $270 million to expand SiPho capacity and next-generation capabilities. This brings total planned investment in SiPho and SiGe to $920 million.
Tower expects the full installation and qualification of this capacity expansion to be completed by the fourth quarter of 2026, enabling full production starts in 2027. The company anticipates this expanded capacity will exceed five times the annualized wafer shipment run-rate from the fourth quarter of 2025. More than 70% of the added capacity is already reserved, supported by customer prepayments through 2028.
CEO Commentary
Chief Executive Officer Russell Ellwanger said the company closed 2025 with its strongest quarterly revenue ever and a substantial increase in profitability, driven by growth across key technology platforms and exceptional performance in silicon photonics.
He noted that Tower’s leadership position in SiPho adoption for next-generation 1.6T transceivers has prompted the additional investment, positioning the company for sustained growth and stronger customer partnerships.
Ellwanger added that Tower remains focused on value-driven expansion and expects sequential improvements in revenue and profitability throughout 2026.
Capacity Agreement Update
Tower also provided an update on its capacity agreement with Intel. In September 2023, Intel signed a contract to manufacture 300mm wafers for Tower’s customers at Intel’s New Mexico facility. Intel has recently indicated it does not intend to perform under the agreement, and the two companies are currently engaged in mediation.
Production flows that were being transferred will now be redirected back to Tower’s Fab7 facility in Japan, where they were originally qualified.
Investor Conference Call
Tower Semiconductor will host an investor conference call on Wednesday, February 11, 2026, to discuss fourth-quarter and full-year results, along with its updated business outlook and financial model. The webcast will be available through the Investor Relations section of the company’s website, with replay access for 90 days.
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