Israel-based Tower Semiconductor has announced plans to expand its 300mm Silicon Photonics (SiPho), Silicon Germanium (SiGe), and advanced package manufacturing capabilities in Japan.
The expansion project is expected to require an estimated $3bn investment by Tower Semiconductor. The company is backed by $1bn in subsidies from the Japanese government.
Tower Semiconductor’s expansion involves a two-track approach. The first track also targets the former location of Panasonic Semiconductor Arai, which is now part of Tower Semiconductor’s operations.
The facility will add a new 300mm SiPho capacity and advanced packaging.
Formerly known as Fab 6, the Arai plant will be dedicated to the production of SiPho.
Tower Semiconductor expects operations to be fully ready for production in the fourth quarter of 2027, while the move is planned to increase production by 300mm at the company’s Fab 7 facility in Uozu.
Based on a single-track growth outlook, Tower Semiconductor is revising its business model and targeting $3.6bn in revenue and $1.2bn in net profit by 2028.
The second track, which will start next to the first, involves building an additional 300mm center next to Fab 7 in Uozu. The development of this site is subject to the signing and closing of related agreements.
According to the company, the new facility will significantly increase the production capacity of SiPho and SiGe, with the aim of meeting the growing demand of customers in emerging AI and data center technologies.
The company expects that the new site will be widely accepted from 2029.
Tower Semiconductor said the expansion will provide advanced domestic production of SiPho and SiGe in Japan, aimed at strengthening the country’s semiconductor supply chain.
The program also aims to strengthen the region’s infrastructure and supply-chain capabilities, as well as promote collaboration with Toyama and Niigata Prefectures, as well as local suppliers, businesses, universities and research institutes.
Tower Semiconductor CEO Russell Elwanger said: “We are honored and grateful that the Government of Japan has chosen Tower to lead the expansion of this very important technology.
“Together, we are creating a world-class center of excellence based on technological leadership, manufacturing excellence, and exceptional product quality.
“By combining Tower’s exceptional technological leadership with Japan’s unmatched manufacturing technology, world-class research facilities, and deeply committed workforce, we are creating a strategic platform that will drive innovation, economic growth, and semiconductor leadership for decades to come.”
