Tower Semiconductor to invest $4 billion in Japanese ops to set up massive optical connectivity hub

What happened

Track One is scheduled to reach full production readiness in the fourth quarter of 2027. Tower expects Track One to enable it to earn approximately $3.6 billion in revenue and $1.2 billion in net profit in FY2028.

Tower Semiconductor and the government of Japan plan to co-invest a total of $4 billion in the company's Japanese operations to turn regional fabs into a massive manufacturing base for optical-connectivity semiconductors, reports Nikkei . The plan is to expand Fab 7's output as significantly as possible to meet growing demand for optical engines by the AI industry .

Such an approach enables the company to add output progressively as additional equipment is installed, rather than waiting for an entirely new fab and process flows to qualify. Track Two: Build new fab The second stage, called Track Two, commences in parallel and is considerably more ambitious.