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The first stage, called Track One, involves converting Tower's idle 200-mm Fab 6 in Arai, Niigata Prefecture, into a 300mm manufacturing facility for silicon photonics (SiPho) and advanced optical packaging (i.e., bonding electronic integrated circuits with photonic integrated circuits), as well as expanding the output of SiGe EICs (Silicon-Germanium Electronic Integrated Circuits) and SiPho PICs (Photonic Integrated Circuits) at 300-mm Fab 7 near Uozu, Toyama Prefecture.
Fab 7 is already fully qualified and is in mass production of various SiGe EICs and SiPho PICs using various process technologies, including the latest TPS65SG and several other TPS65-series 65nm-class SiGe fabrication nodes, as well as TPS45PHD 45nm-class SiPho manufacturing technology. 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 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.
The second stage, called Track Two, commences in parallel and is considerably more ambitious. Tower intends to construct another 300mm manufacturing facility next to Fab 7 in Uozu that will increase the company's output of SiGe EICs and SiPho PICs by several times. As a result, Tower will have two sites in Japan producing EICs and PICs and one — the converted Fab 6 — assembling optical engines using these components.
Tower Semiconductor revives shuttered Panasonic-era fab in $3 billion Japan photonics expansion — METI-backed plan targets $3.6 billion revenue by 2028
AI data center optical interconnect market to hit $144 billion by 2030
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/photonics/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/photonics/tower-semiconductor-to-invest-usd4-billion-in-japanese-ops-to-set-up-massive-optical-connectivity-hub-dual-track-expansion-aims-to-increase-output-by-40-times-by-2029#main
- https://www.tomshardware.com/my-account
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