Tower Semiconductor, an Israeli chipmaker, plans to invest about US$3 billion in Japan, backed by about US$1 billion in government grants, to expand 300mm silicon photonics, silicon germanium, and advanced optical packaging capacity for AI and data-center interconnects.

The first phase will convert the Arai facility, formerly Fab 6, into a production site for 300mm silicon photonics and advanced packaging, and increase output at Fab 7 in Uozu.

The company expects full production readiness in the fourth quarter of 2027.

A second phase would add a new 300mm fab next to Fab 7, which the company said is expected to start making a significant financial contribution in 2029.

Tower already operates in Japan through TPSCo, the former Panasonic Semiconductor manufacturing business, with facilities in Uozu and Tonami.

The support fits Japan’s push, led by the Ministry of Economy, Trade and Industry, to restore competitiveness in semiconductors and strengthen supply-chain resilience.

Tower said it expects US$3.6 billion in revenue and US$1.2 billion in net profit in 2028.

🔗 Source: Calcalist