Tower Semiconductor (TSEM) Stock Forecast & Price Target

Tower Semiconductor Ltd has demonstrated robust growth across its key segments, particularly within its RF Infrastructure business, which saw a 13% sequential increase and an impressive 60% growth year-over-year in Q3. The company forecasts significant revenue growth in its Silicon Photonics segment, projecting increases to $215 million in FY25 and $300 million in FY26, marking growth rates of 105% and 40%, respectively, thereby positioning SiPho as a primary driver of profitability and expansion for the company. Additionally, Tower's Infrastructure business recorded substantial annual growth of 69% in FY24, with noteworthy contributions from its SiPho business, which rose by 250% year-over-year, reflecting strong performance and market demand.

Tower Semiconductor is facing a considerable decline in its Mobile business, projected to decrease at a high-teens pace through FY25, largely attributed to weakness in the Chinese Android market. The financial performance is further pressured by an extended facility lease that will incur an additional $6 million in quarterly costs over the next five years, negatively affecting gross margins. Anticipated declines in average selling prices across communication devices and consumer electronics may further lead to revenue reductions, compounding the company's financial challenges.