Tower Semiconductor (NASDAQ:TSEM) said it will restructure its operations in Japan in a move that will give the company full ownership of a 300mm fabrication plant, while its partner assumes control of a 200mm facility. The company’s shares have risen sharply in recent days, climbing about 27% over the past week to $180.82, near their 52-week high.
Under the arrangement, Tower will hold the 300mm Fab 7 plant through a wholly owned Japanese subsidiary. Meanwhile, Nuvoton Technology Corporation Japan will become the sole owner of the 200mm Fab 5 facility. Both plants are currently operated under TPSCo, a joint venture owned 51% by Tower and 49% by NTCJ, a subsidiary of Nuvoton Technology Corporation (TSEC:4919).
The companies expect the transaction to close on April 1, 2027, pending customary approvals and regulatory clearance, according to a company statement.
To ensure continuity for existing customers, the partners plan to establish mutual long-term supply agreements. Tower customers currently served by Fab 5 and Nuvoton customers supplied by Fab 7 are expected to see no disruption in production or deliveries.
Tower also retains the option to acquire the existing Fab 7 building and land. If the company receives subsidy approval from Japan’s Ministry of Economy, Trade and Industry, it plans to purchase adjacent land to support an expansion of its 300mm manufacturing capacity. The company aims for the combined capacity of the current facility and the planned expansion to reach four times the present 300mm output in Uozu once the project is completed.
Tower noted that its photonics technologies are already qualified and in volume production at the Uozu facility. The company expects photonics shipments to begin increasing as soon as new manufacturing tools are installed at the expanded site.
Tower Semiconductor provides analog semiconductor foundry services serving markets such as consumer electronics, industrial applications, automotive, mobile devices, infrastructure, medical technology, and aerospace and defense.
In separate developments, Tower recently reported record fourth-quarter revenue of $440 million, representing 14% year-over-year growth and an 11% sequential increase, beating market expectations. Adjusted earnings per share reached $0.78, exceeding analyst forecasts by $0.10. The company attributed much of the performance to strong demand in its silicon photonics business.
Following the results, Benchmark raised its price target on Tower Semiconductor to $165 while maintaining a Buy rating.
Tower also announced a development partnership with Lightwave Logic aimed at integrating high-speed optical modulator designs into its silicon photonics process design kit. The collaboration targets bandwidth capabilities of 110GHz and beyond, according to the company.
These initiatives underscore Tower Semiconductor’s strategy to expand its technology capabilities and strengthen its position in advanced semiconductor manufacturing.