Wedbush analyst Matt Bryson indicated that Tower Semiconductor is poised to exceed expectations in its upcoming second-quarter results, driven by an accelerated ramp-up of its silicon photonics (SiPho) capacity. The increased SiPho capacity, which was being qualified in the first quarter, is expected to have made a more substantial contribution to revenue in the second quarter of 2026.
Bryson noted that Tower achieved its first SiPho revenue shipments from two of its fabs in the first quarter with high yields, and utilization at another fab is increasing. This progress underscores the growing demand for SiPho technology, which enables faster data transfer using light and is critical for data center interconnects. Tower is collaborating with Marvell on SiPho integrated circuits.
The positive outlook from Wedbush comes ahead of Tower's official second-quarter earnings release and suggests a bright forecast for the company as it capitalizes on the growing demand for advanced semiconductor technologies in markets like artificial intelligence.