Tower Semiconductor Reports Strong Third Quarter Results and Announces Major Capacity Expansion Plan

Migdal Haemek, Israel – November 13, 2024 – Tower Semiconductor (NASDAQ: TSEM & TASE: TSEM) today announced its financial results for the third quarter ended September 30, 2024, reporting continued growth and a significant investment in future capacity.

Third Quarter Highlights:

• Revenue reached $371 million, a 6% increase quarter-over-quarter and exceeding the $358 million reported in Q3 2023.
• Gross profit remained steady at $93 million, consistent with both Q2 2024 and Q3 2023.
• Operating profit reached $56 million, slightly up from $55 million in Q2 2024 (excluding restructuring income in Q2). Note that Q3 2023 operating profit was significantly higher due to a one-time gain from the Intel merger contract termination.
• Net profit was $55 million, representing a 15% net margin and $0.49 earnings per share, a slight increase from Q2 2024. Again, Q3 2023 net profit was significantly higher due to the Intel merger contract termination.
• Cash flow from operating activities totaled $125 million.

Significant Capacity Expansion:

Tower Semiconductor is investing $350 million to expand its SiPho (Silicon Photonics) and SiGe (Silicon Germanium) capacity and capabilities. This expansion will include the qualification and ramp-up of 200mm capacity in San Antonio and Migdal Haemek, and in its 300mm facility in Uozu, Japan. This investment is in direct response to the accelerating demand from key customers in high-growth markets.

Business Outlook:

Tower Semiconductor projects revenue of $387 million for the fourth quarter of 2024, with a potential 5% variance either way. This projection indicates continued growth both year-over-year and quarter-over-quarter.

CEO Commentary:

Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, commented: “We are delivering consistent quarter-over-quarter revenue growth, driven by strong double-digit year-over-year increases across key technology platforms. Our focus on innovation and strong customer partnerships positions us as a vital player in the technologies of the future. The significant investment in SiGe and SiPho capacity underscores our commitment to meeting the rapidly expanding demand in the AI-driven data center market.”