Tower plans $4 billion expansion of Japan optical-chip production
The build-out would greatly expand Tower’s Japanese manufacturing footprint, though its financial impact is expected later.
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
For Tower, this is a shift in the scale of its Japanese manufacturing operations, not an immediate earnings change: the new phase is expected to matter financially only from 2029. The production growth also comes with planned local hiring.
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