Tower Semiconductor on Wednesday forecast second-quarter revenue above estimates and said it landed $1.3 billion in deals for 2027 to supply chips that use light to move data at high speeds through artificial intelligence data centers.
Strong demand for its analog and mixed-signal processors on the back of rising investment in data centers and AI helped boost the Israeli contract chipmaker's quarterly forecast, sending its U.S.-listed shares over 17% before the bell.
Integrated circuits developed by the company are used by a wide range of industries including automotive, industrial, consumer electronics and communications.
The company expects second-quarter revenue of $455 million, above analysts' average estimate of $436.4 million, according to data compiled by LSEG.
Tower Semiconductor also announced that it signed silicon photonics deals worth $1.3 billion for 2027 revenue and received $290 million in customer advance payments to secure production capacity.
It added that customers have committed to larger orders for 2028, with more advance payments due by January 2027.
"We are confident in our path toward achieving our financial model targets of $2.8 billion in annual revenue and $750 million in net profit in 2028," CEO Russell Ellwanger said.
Tower reported a 15% rise in first-quarter revenue to $414 million, beating estimates of $411 million. Adjusted profit came in at 65 cents per share, compared with estimates of 56 cents.
In March, rival GlobalFoundries sued Tower alleging the Israeli chipmaker infringed 11 patents related to manufacturing chips used in smartphones and other electronics.
