Israel-based company Tower Semiconductor has announced plans to expand its 300mm Silicon Photonics (SiPho), Silicon Germanium (SiGe), and advanced packaging manufacturing capabilities in Japan.
The expansion project is projected to require approximately $3bn in investment by Tower Semiconductor. The company is being supported by $1bn in grants to be provided by the Japanese government.
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Tower Semiconductor’s expansion involves a dual-track approach. The first track repurposes the former Panasonic Semiconductor Arai facility, now part of Tower Semiconductor’s operations.
The facility will add new 300mm SiPho capacity and advanced packaging.
Previously known as Fab 6, the Arai plant will be dedicated to SiPho manufacturing.
Tower Semiconductor expects operations to be fully ready for production in the fourth quarter of 2027, while the move is set to maximise output for 300mm at the company’s Fab 7 site in Uozu.
Based on the track-one growth outlook, Tower Semiconductor is updating its business model and is targeting $3.6bn in revenue and $1.2bn in net profit in 2028.
The second track, which will commence alongside the first, involves building an additional 300mm facility next to Fab 7 in Uozu. This site’s development is subject to the signing and closing of related agreements.
According to the company, the new facility will offer a substantial increase in SiPho and SiGe production capacity, with the aim of meeting growing customer demand in emerging AI and data centre technologies.
The company anticipates the new site will be highly accretive starting in 2029.
Tower Semiconductor stated that the expansion will provide advanced domestic manufacturing for SiPho and SiGe in Japan, aiming to strengthen the country’s semiconductor supply chain.
The initiative also seeks to reinforce regional infrastructure and supply-chain capabilities, and foster collaboration with Toyama and Niigata Prefectures, as well as with local suppliers, businesses, universities, and research institutions.
Tower Semiconductor CEO Russell Ellwanger said: “We are honoured and appreciative that the Government of Japan has selected Tower to lead the expansion of these strategically important technologies.
“Together, we are building a globally differentiated centre of excellence founded on technology leadership, manufacturing excellence, and exceptional product quality.
“By combining Tower’s specialised technology leadership with Japan’s unparalleled manufacturing expertise, world-class research institutions, and deeply committed workforce, we are building a strategic platform that will drive innovation, economic growth, and semiconductor leadership for decades to come.”
According to the company, the former Panasonic Semiconductor business, now operated as TPSCo, has played a central role in establishing its presence in Japan.
The expansion aims to support long-term customer needs and enable next-generation optical connectivity technology.
Tower Semiconductor indicated it will proceed with recruitment and training for engineering and manufacturing positions at the new and existing facilities.
Separately, in March 2026, GlobalFoundries filed multiple patent infringement lawsuits against Tower Semiconductor in the US.
