Tower Semiconductor (TSEM) Q2 2025 Earnings Call August 04, 2025 10:00 AM ET Company ParticipantsNoit Levy - SVP - IR & Corporate CommunicationsRussell Ellwanger - CEO & DirectorOren Shirazi - SVP - Finance & CFOConference Call ParticipantsCody Acree - Equity Research AnalystRichard Shannon - Senior Research AnalystMehdi Hosseini - Senior Equity Research AnalystLisa Thompson - Senior AnalystOperatorGood afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's Tower Semiconductor Se ...

Financial Data and Key Metrics Changes - In Q2 2025, the company reported revenues of $372 million, representing a year-over-year increase of $21 million or 6% compared to Q2 2024, and a quarter-over-quarter increase of $14 million or 4% compared to Q1 2025 [16] - Net profit for Q2 2025 was $46.6 million, which is $7 million higher than the previous quarter, resulting in earnings per share of $0.42 basic and $0.41 diluted [16][19] - Gross profit and operating profit for Q2 2025 were $80 million and $40 million respectively, each higher than the prior quarter by $7 million [16] Business Line Data and Key Metrics Changes - The RF Infrastructure business grew significantly, contributing over $90 million in revenues, which accounted for 25% of corporate revenues, up from 14% in the same period of 2024 [6][10] - The company has seen a recovery in RF SOI, with a revenue increase of over 20% from Q1 to Q2 2025, and is expecting a further increase of close to 30% from Q2 to Q3 [10][12] - For silicon photonics, the company has moved five times more products from preproduction to production phase compared to the same period in 2024, indicating strong customer adoption and operational scalability [8] Market Data and Key Metrics Changes - The company is experiencing strong demand in the optical transceiver market, particularly for silicon germanium and silicon photonics technologies, which are essential for data center and AI expansions [5][6] - Utilization rates in Q2 2025 were approximately 60% for Fab two in Israel and Fab nine in Texas, while Fab three operated at 85% utilization and Fab seven was fully utilized [13] Company Strategy and Development Direction - The company is repurposing multiple factories to increase capacity for RF infrastructure, specifically silicon germanium and silicon photonics, with expected growth in Q3 and Q4 being the first results of this strategy [4][5] - The company plans to invest in capacity and R&D throughout 2025, with further growth planned for 2026 to align with customer demand forecasts [5][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining the number one market share position in the optical transceiver market, with expectations for sequential quarter-over-quarter growth throughout 2025 and acceleration in the second half [4][5] - The company anticipates a doubling of silicon germanium revenue in 2025 compared to 2024, with significant contributions expected from infrastructure and power management segments [24] Other Important Information - The company has committed to significant capital expenditures, including $300 million for equipment in the New Mexico fab and $500 million for the Italy fab, with plans to invest $350 million to expand capacity in various fabs [19][20] - The balance sheet remains strong, with total assets of $3.2 billion and shareholders' equity reaching a record of $2.8 billion as of June 2025 [19] Q&A Session Summary Question: What segments are expected to contribute to sequential growth in the second half of the year? - Management indicated that RF Infrastructure, particularly silicon germanium and silicon photonics, will be the primary contributors, with power management and RF SOI also expected to show strong growth [24] Question: Is the company fully booked through the end of the year? - Management confirmed that while there is room for immediate upsides, the focus remains on utilizing additional capacity for silicon germanium and silicon photonics [27][28] Question: Can you elaborate on the silicon photonics technology supporting receive functions? - Management noted that the new technology for the receive function could add approximately 20% to the served market for specific applications, with expected high shipments in Q4 [36][37] Question: What is driving the recovery in RF mobile? - Management attributed the recovery to inventory corrections and market share gains among customers, with expectations for continued growth in Q3 and Q4 [40][61] Question: How is the company planning for capacity amid evolving customer needs? - Management emphasized that pluggable solutions remain strong, and the transition to silicon photonics is expected to drive demand, with ongoing development for future technologies [46][49] Question: What is the outlook for operating expenses and cash flow? - Management expects operating expenses to remain flat, while cash flow from operations is anticipated to improve as revenue increases, despite ongoing capital expenditures [75][72]

Second Quarter 2025 Financial Results Conference Call Supporting Slides August 4, 2025 Safe Harbor This presentation contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements ...

Core Viewpoint - The Tower Semiconductor is hosting the 2025 Global Technology Symposium (TGS 2025) in Shanghai, aimed at providing a platform for existing and potential customers to engage directly with the management and technical experts of Tower [2][4]. Agenda Summary - The event will commence with registration from 08:30 to 09:30, followed by an opening session led by Mrs. Rachel Xie, the China Country Manager [5]. - A keynote address will be delivered by Mr. Russell Ellwanger, CEO of Tower Semiconductor, from 09:45 to 10:30 [5]. - Dr. Marco Racanelli, President, will discuss market megatrends and Tower's technology solutions in RF mobile, infrastructure, power, and sensors from 10:30 to 11:15 [5]. - The agenda includes a lunch break from 12:00 to 13:30, after which Mr. Naoki Okada will present on Tower's design enablement services [5]. - Dr. Mete Erturk will cover power management technologies focusing on system efficiency and integration from 14:15 to 15:00 [6]. - The afternoon sessions will feature Dr. Benoit Dupont discussing OLEDoS displays and next-generation image sensor technologies, followed by Dr. Ed Preisler on foundry technologies for high-speed data transfer applications [6]. - The event will conclude with closing remarks from Mr. Lei Qin, Senior Vice President of Worldwide Sales [7].

MIGDAL HAEMEK, Israel, — July 30, 2025 - Tower Semiconductor, a leading foundry of high-value analog semiconductor solutions, announced today that it has been awarded the Best Supplier Award by Wisol, a key vendor of RF filters and modules used by global top-tier mobile phone manufacturers. Wisol supplies RF front-end module (FEM) devices based on Tower’s advanced 300mm RF SOI technology, produced at Tower’s facilities in Uozu, Japan and Agrate, Italy. The award recognizes Tower’s long-standing partnership ...

Company Overview - Tower Semiconductor is a leading foundry specializing in high-value analog semiconductor solutions, providing technology and process platforms for various markets including consumer, industrial, automotive, mobile, infrastructure, medical, and aerospace and defense [3]. Upcoming Earnings Release - Tower Semiconductor will release its second quarter 2025 earnings on August 4, 2025, and will hold a conference call to discuss the financial results and guidance for the third quarter 2025 at 10:00 a.m. Eastern Time [1]. Conference Call Details - The conference call will be accessible via the Investor Relations section of Tower Semiconductor's website, and participants must pre-register to receive dial-in details and a unique PIN [2]. The teleconference will be available for replay for 90 days [2]. Facilities and Capacity - Tower Semiconductor operates one 200mm facility in Israel, two 200mm facilities in the U.S., and two facilities in Japan (200mm and 300mm). The company also shares a 300mm facility in Italy with STMicroelectronics and has access to a 300mm capacity corridor in Intel's New Mexico factory [3].

Core Insights - Tower Semiconductor has received the Industry Paper Competition Award at the 2025 IEEE International Microwave Symposium for their paper on a low-loss, wideband RF switch technology, reinforcing their leadership in advanced RF front-end innovation [1][2]. Group 1: Award Recognition - The award highlights Tower's PCM RF switch as a significant innovation in RF switch technology, achieving a bandwidth of DC–110 GHz, insertion loss of less than 2 dB, power handling of 30 dBm, and a linearity improvement of 15–20 dB over RFSOI CMOS solutions [2][3]. Group 2: Technological Advancements - Tower's proprietary BEOL integration and integrated digital control enable ultra-low-loss wideband performance, simplifying implementation for end users and facilitating advanced circuits for applications such as 5G, future 6G, SatCom, beamforming, and millimeter-wave technologies [2][3]. Group 3: Company Overview - Tower Semiconductor is a leading foundry of high-value analog semiconductor solutions, focusing on technology and process platforms for various markets including consumer, industrial, automotive, mobile, infrastructure, medical, and aerospace and defense [4]. - The company operates multiple facilities globally, including locations in Israel, the U.S., and Japan, and provides design enablement and process transfer services to IDMs and fabless companies [4].

First Quarter 2025 Financial Results Conference Call Supporting Slides May 14, 2025 Safe Harbor This presentation contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. A ...

Core Insights - The global wafer foundry industry experienced a 5.4% quarter-over-quarter decline in total revenue for Q1 2025, amounting to $36.403 billion, but showed a significant year-over-year growth of 24.8% [1] - The traditional seasonal slowdown in the wafer foundry industry was somewhat mitigated this year due to uncertainties in international conditions prompting downstream customers to stock up inventory and China's ongoing trade-in policy [1] Industry Performance - Despite facing seasonal challenges, the wafer foundry industry demonstrated resilience, with expectations for revenue growth in Q2 2025 driven by the launch of new smartphone models and stable demand from AI and HPC sectors [4] - The top ten global wafer foundries accounted for 97% of the market share in Q1 2025, with a total revenue of $36.403 billion [2] Company Rankings - TSMC led the market with a revenue of $25.517 billion in Q1 2025, despite a 5.0% decline from Q4 2024, maintaining a market share of 67.6% [2] - Samsung's revenue fell by 11.3% to $2.893 billion, resulting in a market share of 7.7% [2] - SMIC reported a slight revenue increase of 1.8% to $2.247 billion, raising its market share to 6.0% [2] - Vanguard's capacity utilization was above average due to customer stockpiling, while Tower Semiconductor faced significant seasonal impacts and did not benefit from China's subsidy policies [4]

Core Insights - Tower Semiconductor is participating in the International Microwave Symposium (IMS) 2025, showcasing its advanced RF & HPA technology platform and recent developments in RF switch technology [1] - The company, in collaboration with pSemi, has developed a white paper on a new wideband SPDT switch, which has been nominated for the Best Industry Paper Award at IMS2025 [1][2] Company Overview - Tower Semiconductor is a leading foundry specializing in high-value analog semiconductor solutions, serving various markets including consumer, industrial, automotive, mobile, infrastructure, medical, and aerospace and defense [4] - The company offers a range of customizable process platforms such as SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, and MEMS, focusing on sustainable impact through long-term partnerships and innovative technology [4] Product Highlights - The jointly developed SPDT switch features ultra-wideband performance from DC to 110 GHz with less than 2 dB insertion loss, and it supports digital control via integrated CMOS drivers [2] - The switch can handle up to 30 dBm of power and exhibits 15-20 dB better linearity performance compared to existing RFSOI CMOS SPDTs, making it suitable for advanced applications in 5G, future 6G, SatCom, and millimeter-wave technologies [2] Event Details - The presentation of the white paper will be conducted by Dr. Nabil El-Hinnawy on June 19, 2025, at 8:20 AM during the Innovative RF Switches session [3] - Attendees can meet with Tower's engineering team at booth 655 during the conference [3]