Tower Semiconductor Ltd. reported stronger than expected first quarter results and raised its revenue guidance for the second quarter, sending its share price to a new record. First quarter revenue rose 15 percent year over year to $414 million, while net profit increased to $65 million, up from $40 million a year earlier. The company expects $455 million in revenue in the second quarter, marking continued sequential and annual growth.

The company also announced $1.3 billion in signed contracts through 2027 with major silicon photonics customers, positioning the segment as a key growth driver. It has already received $290 million in advance payments for capacity reservations, with additional agreements for 2028 expected to bring further advances by early 2027.

Tower said expanding manufacturing capacity will support its long term targets of $2.8 billion in annual revenue and $750 million in net income by 2028. Management highlighted strong demand tied to artificial intelligence infrastructure and optical connectivity, as well as strategic expansion efforts, including moves to strengthen its manufacturing operations in Japan.