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Tower Semiconductor Shares Rise on High-Volume Shipments of AI Optical Chips
Shares of Tower Semiconductor Ltd. (NASDAQ: TSEM) rose 6.8% in premarket trading Thursday following an announcement that it has started high-volume shipments of optical engine chips for artificial intelligence applications. The move, in partnership with NewPhotonics, positions the company to capitalize on the surging demand for high-bandwidth components required for AI infrastructure.
Shipments Target AI Data Centers
Tower Semiconductor and its partner NewPhotonics are now shipping laser-integrated optical engine photonic integrated circuits (PICs) designed to support the massive data flows within AI systems. The companies stated that the initial shipments support data rates from 800G to 1.6T.
These high-performance chips are intended for use in:
- Pluggable transceiver modules
- Socket pluggable applications
The components are critical for creating high-speed, energy-efficient optical interconnects that link processors and memory in modern data centers.
Technology and Future Roadmap
AdThe collaboration leverages Tower’s PH18DA silicon photonics technology platform. This platform enables the monolithic integration of key components—including lasers, modulators, and photodetectors—onto a single photonic integrated circuit, a key feature for scaling performance and efficiency.
Looking ahead, the partners announced plans for future volume manufacturing of 6.4T solutions. The companies project that volume shipments for these next-generation chipsets will commence in the first half of 2027, addressing the next wave of AI infrastructure demands.
Market Significance
The announcement was well-received by investors, signaling Tower's successful entry into a high-growth segment of the semiconductor market. The demand for advanced optical interconnects is a direct result of the expansion of large-scale AI models and the data centers that power them.
"We are excited to see our vision of integrating lasers with high-performance photonic integrated circuits come to fruition through scale-ready solutions," said Dr. Ed Preisler, Vice President and General Manager of Tower Semiconductor’s RF Business Unit, in the company's statement.
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