Tower Semiconductor (TSEM) Stock Forecast & Price Target

Tower Semiconductor Ltd. has demonstrated strong performance in its RF Infrastructure segment, which grew 13% sequentially and 60% year-over-year in Q3, primarily driven by robust growth in its Silicon Photonics (SiPho) and Silicon Germanium (SiGe) Optical Transceiver revenues. The company's Infrastructure business showed remarkable annual growth of 69% in FY24, reaching $241 million, with SiPho contributing significantly at $105 million, an impressive 250% increase compared to the previous year. Additionally, Tower's shares have seen a notable rise of nearly 17%, reflecting market confidence in its ongoing streak of increasingly strong financial results.

Tower Semiconductor Ltd. is facing a significant decline in its Mobile business, projected to decrease at a high-teens pace through FY25, largely due to weakness in the Chinese Android market. The company is also experiencing adverse effects on its Q4 gross margins from a costly lease extension for its Newport Beach facility, incurring an additional $6 million in expenses per quarter over the next five years. Furthermore, anticipated revenue from RF-SOI is expected to drop by approximately 21% in 2025 compared to the previous year, compounded by potential pressures to lower selling prices in response to declining average prices in key markets such as consumer electronics and PCs.