Tower Semiconductor (NASDAQ/TASE: TSEM) announced plans to restructure its Japan operations by taking full ownership of a 300mm manufacturing facility while expanding capacity to meet customer demand.

The semiconductor foundry will acquire complete control of the 300mm facility, known as Fab 7, from TPSCo, a joint venture previously owned 51% by Tower and 49% by Nuvoton Technology Corporation Japan. Under the restructuring, Nuvoton will take full ownership of the 200mm facility, Fab 5.

The transaction is scheduled to close on April 1, 2027, subject to regulatory approvals and customary closing conditions. Both companies will enter into long-term supply agreements to maintain service continuity for existing customers.

Tower plans to expand the 300mm capacity pending subsidy approval from Japan's Ministry of Economy, Trade and Industry. The company targets combining the existing facility with an adjacent expansion to achieve four times the current Uozu 300mm capacity once completed.

"This step enables Tower to further strengthen our differentiated optical and photonics technology platforms through a large and profitable expansion of our 300mm operational capabilities," said Russell Ellwanger, Chief Executive Officer of Tower Semiconductor.

The facility currently produces photonics technologies that are qualified and shipping in volume. Tower expects the first increases in photonics shipments to occur immediately upon each new tool arrival in the expanded facility footprint.

Tower operates manufacturing facilities in Israel, the United States, and Japan, along with a shared 300mm facility in Italy with STMicroelectronics. The company provides analog semiconductor foundry services for consumer, industrial, automotive, mobile, infrastructure, medical and aerospace markets.