Shares of Tower Semiconductor (TSEM) jumped 16% in pre-market trading after teaming up with Nvidia (NVDA) to develop advanced silicon photonics for AI data centers. The partnership will focus on high-speed silicon photonics for 1.6T data center optical modules, designed to work with Nvidia’s networking protocols and next-gen AI systems.
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For context, Tower Semiconductor manufactures specialty semiconductors for the automotive, industrial, imaging, and AI data center markets. The company focuses on advanced tech like high-performance analog, RF, and silicon photonics to help devices run faster and more efficiently.
What the Deal Means for Tower Semiconductor
As part of the partnership, the new silicon photonics (SiPho) solution is expected to double data rates compared with previous generations, increasing bandwidth and throughput for optical connections. This helps accelerate AI workloads in data centers and strengthens Tower Semiconductor’s role as a key partner for high-speed optical interconnects in AI infrastructure, data center networking, and advanced telecom markets.
Commenting on the partnership, Tower Semiconductor CEO Russell Ellwanger said the company is investing heavily in its SiGe and silicon photonics platforms to provide top-tier performance and scalability, helping customers build the next generation of data center architectures.
Meanwhile, Nvidia’s Senior VP of Networking Gilad Shainer added that the rapid growth of AI is driving demand for high-speed, scalable networking to connect AI infrastructure. He noted that collaborating with Tower Semiconductor will make AI systems more efficient and help accelerate AI applications at scale.
Is Tower Semiconductor a Good Stock to Buy?
According to TipRanks, TSEM stock has a Moderate Buy consensus rating based on three Buys and two Holds assigned in the last three months. At $134.80, Tower’s average share price target implies a 11.15% upside potential.
