Tower and Japan commit $4B to expand optical chip production capacity
The multiyear push aims to massively increase Japan-based 300mm output and reshape ownership of key fabs.
Tower Semiconductor and Japan are putting roughly $4 billion into expanding Japanese production of optical-connectivity chips, with Tower funding $3 billion and Japan’s METI providing $1 billion. The first phase will turn Fab 6 into a 300mm silicon-photonics and advanced optical-packaging site, while Tower also plans another 300mm fab beside Fab 7 in Uozu. Tower expects that new phase to contribute materially to results from 2029; by then, it targets Japanese capacity equivalent to 45,000 300mm wafers per month—about 40 times the 2025 level—and plans to hire around 200 people. For Track One, the company forecasts FY2028 revenue of about $3.6 billion and net profit of $1.2 billion. A separate ownership change is expected to close in April 2027 under an agreement announced in March 2026: Tower will take control of Fab 7 and its 300mm foundry operation, while Nuvoton will own TPSCo and Fab 5.
Why it matters
This investment sharply scales up Japan’s role in optical-connectivity chip manufacturing, with Tower planning capacity equivalent to 45,000 300mm wafers per month in 2029, about 40 times its 2025 level, and adding around 200 jobs in the country. The shift is paired with a reshuffle of fab ownership that gives Tower control of Fab 7 and its 300mm foundry operation, while Nuvoton takes TPSCo and Fab 5, consolidating who runs which facilities as the new capacity comes online.
Signal or noise?
Does this story matter, or is it hype? Decide before you see what everyone else thinks.
Sources
- Tom's Hardware