Tower Semiconductor (TSEM) Stock Forecast & Price Target

Tower Semiconductor Ltd has demonstrated significant growth across its diversified business segments, with a particularly strong performance observed in the RF Infrastructure segment, which grew 13% sequentially and 60% year-over-year in Q3. The company's Silicon Photonics (SiPho) business is poised to be a key growth driver, projected to reach $215 million in FY25 and $300 million in FY26, reflecting a robust increase of 105% and 40%, respectively. Additionally, Tower's Infrastructure business reported a remarkable annual growth of 69% in FY24, driven by substantial contributions from its SiPho segment, further solidifying a positive outlook for the company's future performance.

Tower Semiconductor is facing a significant decline in its Mobile business, projected to drop at a high-teens rate through FY25, largely attributed to weakness in the Chinese Android market. The company's gross margins are also under pressure due to the costly extension of its Newport Beach facility lease, incurring an additional $6 million per quarter for five years. Furthermore, the RF-SOI forecast indicates a sharp annual decline of approximately 21% for 2025, reflecting broader concerns over potential price reductions in communication devices and consumer electronics, which may further adversely impact revenue.