Tower plans $4 billion Japan photonics expansion

Tower Semiconductor and Japan’s government plan to co-invest $4 billion in the company’s Japanese operations to create a major production base for optical-connectivity semiconductors. The plan would repurpose an idled fab, expand an existing 300mm facility, and add another 300mm fab, lifting Japanese capacity to the equivalent of 45,000 300mm wafers per month by 2029.

Track One will convert Fab 6 in Arai into a 300mm site for silicon photonics and advanced optical packaging while increasing output at Fab 7 near Uozu for SiGe electronic integrated circuits and silicon photonics photonic integrated circuits. Fab 7 already produces SiGe and SiPho devices using TPS65-series 65nm-class SiGe nodes and TPS45PHD 45nm-class SiPho technology. Full production readiness is scheduled for the fourth quarter of 2027, with expected FY2028 revenue of approximately $3.6 billion and net profit of $1.2 billion.

Track Two will add a new 300mm facility next to Fab 7, with material financial contributions expected in 2029. Tower plans to spend $3 billion, while Japan’s Ministry of Economy, Trade and Industry will provide another $1 billion. The company says rivals including Intel, TSMC, and GlobalFoundries are ahead in co-packaged optics, making the investment part of its capacity expansion and a foundation for future CPO work.