A sharp change in market mood has lifted Tower Semiconductor into the spotlight. The company’s shares surged again, taking its market value beyond $15 billion and marking one of the strongest re-ratings among global chipmakers.
The rise is striking when compared with the past. Just over 2 years ago, Intel had agreed to buy Tower for about $5 billion. That deal collapsed after Chinese regulators failed to approve it. At the time, the breakdown was seen as a blow. Today, Tower’s valuation is about 3 times that abandoned price.
Investor interest has surged. Tower’s stock is up more than 160% in the last 6 months and has climbed sharply this year. Its valuation multiples now exceed even those of Nvidia. Once viewed as a niche producer of analog chips, Tower is now seen as a key player in the infrastructure that supports artificial intelligence.
For CEO Russell Ellwanger, the shift is visible beyond the markets. “I come home in the evening and my whole family, even my neighbors, talk to me about Tower stock,” he said in an interview with a local newspaper. “They think I’m someone special.”
The company’s turnaround is tied to silicon photonics. This technology uses light instead of copper to move data inside servers. As AI workloads grow, copper links are becoming slow and power-hungry. Photonics allows faster speeds with lower energy use, solving a major data-center problem.
Tower is investing heavily to expand this business. It recently announced a $300 million upgrade of its silicon photonics lines, on top of a $350 million plan revealed earlier this year. Most of the new capacity is being built at its Migdal HaEmek plant in northern Israel.
Once the expansion is finished in the first half of 2026, Tower expects photonics revenue to triple and approach $1 billion a year from AI-linked products. By the end of 2026, about 40%–45% of total revenue is projected to come from data centers.
Even before that, performance is improving. Tower forecast record Q4 revenue of $440 million, with full-year 2025 sales of $1.5 billion, up 14% year on year. Profit is expected to near $200 million.
The failed Intel deal now looks like a turning point. Tower kept its independence, invested through regulatory delays, and emerged positioned at the heart of AI infrastructure growth.
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