Tower Semiconductor (TSEM) Stock Forecast & Price Target

Tower Semiconductor Ltd has demonstrated robust financial growth, particularly in its RF Infrastructure segment, which saw a sequential increase of 13% and an impressive annual growth of 60% in Q3. The Silicon Photonics (SiPho) business stands out as a key driver, with revenue expected to surge significantly to $215 million in FY25 and $300 million in FY26, marking growth rates of 105% and 40%, respectively. Additionally, the company's Infrastructure business achieved a notable annual increase of 69% in FY24, underscoring Tower's continued capacity to exceed growth targets and deliver strong performance amid expanding markets such as Data Center and AI.

Tower Semiconductor Ltd is facing a negative outlook primarily due to its projected decline in the Mobile business, anticipated to decrease at a high-teens rate through FY25, largely attributed to weakness in the Chinese Android market. Additionally, the company's Q4 gross margin is adversely affected by a costly lease extension for its Newport Beach facility, incurring $6 million in expenses per quarter for the next five years. Furthermore, a significant projected decline in the RF-SOI segment forecast, down approximately 21% annually, compounded with the potential need to reduce selling prices amid declining average prices in key electronic product markets, suggests ongoing revenue pressures.