Tower Semiconductor (TSEM) Stock Forecast & Price Target

Tower Semiconductor has demonstrated significant growth across various segments, particularly in its RF Infrastructure business, which saw a remarkable 13% sequential increase and a 60% year-over-year growth in Q3. The Silicon Photonics (SiPho) segment is projected to be a substantial growth contributor, with expected revenues rising from $105 million in FY24 to $215 million in FY25 and potentially reaching $300 million in FY26, marking impressive growth rates of 105% and 40%, respectively. Additionally, Tower’s Infrastructure business reported a robust annual increase of 69% in FY24, reinforcing the company's strong market position and positive outlook amid expanding opportunities in data centers and AI applications.

Tower Semiconductor Ltd. is facing a challenging outlook, particularly with its Mobile business projected to decline at a high-teens pace through FY25, largely attributed to weakness in the Chinese Android market. Additionally, the company's gross margins are under pressure from a costly lease extension for its Newport Beach facility, resulting in an added expense of $6 million per quarter over the next five years. Furthermore, a significant anticipated decline in RF-SOI revenues—forecasted to drop about 21% annually—coupled with the risk of reduced average selling prices across key product categories, poses a threat to the company's overall revenue generation capabilities.