Tower Semiconductor Q1 2026. It's All About Silicon Photonics Now!
On May 13, 2026, Tower reported Q1 2026 revenue of $413.6 million, up 15.5% YoY but down 6.0% QoQ from Q4 2025’s record $440.2 million. This was marginally ahead of the forecasted midpoint of $412 million. Note that Tower’s first quarters are typically seasonally down.
GAAP gross margin landed at 26.8%, a touch above the 26.7% Q4 print and 640 basis points above the 20.4% Q1 2025 base. GAAP operating income was $64.6 million (+96% YoY) and GAAP net was $65.0 million on 114.3 million diluted shares. GAAP diluted EPS was $0.57, +63% YoY and -19% sequentially from Q4 2025’s $0.70 GAAP diluted EPS.
Looking ahead, the company guided for a record current quarter with revenues of $455 million, while flagging that we should expect QoQ growth for both revenue and gross margin throughout the year
The company guides revenue for the second quarter of 2026 to be $455 million, a company record, with an upward or downward range of 5%, reflecting revenue increase of 22% year-over-year and 10% quarter-over-quarter. Company targets sequential quarter-over-quarter revenue and margin growth throughout 2026.
Lest the strong guidance should escape our attention, the company helpfully added this into their revenue chart, something they don’t normally do…
This guidance, along with the reasons behind it, drove a strong positive reaction in the share price over the following couple of days:
TSEM closed May 12 at $220.83, opened May 13 at $253.95 and finished print day at $270.77, +22.6%. For the record, TSEM is now up ~550% over the course of the past twelve months, with the lion’s share of that action happening since mid-March.
It think it would be fair to say that the earnings call was dominated by CEO Russell Ellwanger’s opening remarks, later repeated by the CFO
$1.3 billion of contracted silicon photonics revenue for 2027 from our largest SiPho customers, ... backed by approximately $290 million in prepayments already received
Tower is all about silicon photonics now. Let’s dig in…
