Tower Semiconductor published third-quarter results yesterday, and as expected, they broke records. Revenue reached $526 million, up 33% from $396 million a year earlier and above the company's own guidance. Net profit hit a record $120 million, and adjusted EPS of $3.62 handily beat the $3.22 analysts expected.
Silicon photonics
The growth engine is silicon photonics: chips that move data with light instead of electricity, used for high-speed connections inside AI data centers. Revenue from the field reached about $240 million in the quarter, nearly half of all revenue. Tower expects $600 million in fourth-quarter revenue, bringing annual revenue to $2 billion.
150 more employees
According to Globes, on the back of the growth Tower plans to add about 150 employees in Israel. At a time when Israeli software companies are laying off staff, it is part of the trend in which AI is "splitting" tech: chip and infrastructure companies hire while software companies shrink.
Why the stock fell
Despite the results, the stock fell about 6.7% on the day. Investors, who had driven the stock sharply higher in recent months, apparently expected an even higher forecast. It is a pattern seen this week at several AI companies: even excellent results aren't enough when expectations are very high.
