Tower Semiconductor beats quarterly profit estimates on AI-driven chip demand

Feb 11 (Reuters) - Israeli ‌contract chipmaker ​Tower ​Semiconductor beat Wall Street expectations for fourth-quarter profit on Wednesday, helped by demand for its ‌chips designed for fast data transmission in artificial ⁠intelligence infrastructure.

U.S.-listed shares of the company were up nearly 4% ‌in early trading.

Demand for ‌Tower's silicon photonics technology, which transmits data at high speeds using light, has made it an important ​supplier as data center operators race to build infrastructure capable of handling complex AI workloads.

The company ⁠is making an additional $270 million investment in equipment for silicon photonics chips, ​it said on Wednesday, taking the total spending on the high-speed technology to $920 million.

Tower aims ​to make over five times ‌as many of these chips per month by the end of 2026 as it ⁠shipped in late 2025, CEO Russell Ellwanger said, adding that customers have already agreed to buy that additional volume.

The ⁠company forecast first-quarter revenue of $412 million, plus or minus 5%, ​compared with estimates of $408.4 million, according to data compiled by LSEG.

It reported revenue of $440.2 million for the fourth quarter, compared with ‌estimates of $439.8 million.

Adjusted profit for the quarter came in at 78 cents per ‌share, beating estimates of 68 cents per share.

Tower also ⁠makes analog semiconductor wafers ‌for other companies ​in the U.S., Israel, Japan and Italy.

(Reporting by Anhata Rooprai in Bengaluru; Editing by Sahal ‌Muhammed)

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