Chip Stocks Rise After Two-Day Skid. Tower Semiconductor Among Leaders.

Tower Semiconductor and Japan will invest $4 billion to expand its Japanese operations, aiming to boost capacity 40x by 2029. The plan includes repurposing an idle fab and building a new one, targeting $3.6B revenue and $1.2B net profit in FY2028. The expansion focuses on optical-connectivity semiconductors, driven by AI demand.

Tower Semiconductor (TSEM) stock rose 6.73% on September 25, 2026, driven by strong demand for its AI photonics chips. The company's shares have gained 20% in a few weeks, with a price-to-sales ratio of 16.64 and revenue of $1.57B. Analysts like Barclays and Stifel have set price targets of $310 and $270, respectively, citing its leadership in silicon photonics for AI data centers.

Tower Semiconductor (TSEM) shares rose 5.7% after Mizuho initiated coverage with an Outperform rating and $300 price target, citing its leadership in silicon photonics chips and projected growth in optical connectivity transceivers. Mizuho projects a $8.5B market by 2029. Barclays and Stifel also recently issued bullish ratings. The stock's gain was driven by company-specific catalysts, not broader market trends.

Tower Semiconductor plans a $4bn investment in Japan to build its largest optical communications semiconductor hub, aiming to boost production capacity 40x by 2029. The move targets silicon photonics demand, with potential collaboration with NTT. The company holds over 80% of the contract manufacturing market for optical communications semiconductors used in servers.

Tower Semiconductor plans to expand its optical communications chip manufacturing in Japan, with a $4 billion project, including $3 billion from the company and $1 billion from Japanese government grants. The expansion aims to meet long-term customer demand for AI data center components, with full production readiness expected by Q4 2027.

Tower Semiconductor plans a $4 billion investment in Japan to establish its largest production hub for optical communications chips, aiming to meet growing demand for AI server technology. The company already operates three manufacturing sites in Japan, along with facilities in Israel and the U.S.