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Tower Semiconductor to invest $4 billion in Japanese ops to set up massive optical connectivity hub

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Tower Semiconductor to invest $4 billion in Japanese ops to set up massive optical connectivity hub

Tower Semiconductor and the government of Japan plan to co-invest a total of $4 billion in the company's Japanese operations to turn regional fabs into a massive manufacturing base for optical-connectivity semiconductors, reports Nikkei. The dual-track expansion will repurpose an idled fab, maximize output of an existing 300mm facility, and eventually add another 300mm fab, thus boosting Tower's Japanese capacity to the equivalent of 45,000 300mm wafers per month by 2029.

The first stage, called Track One, involves converting Tower's idle 200-mm Fab 6 in Arai, Niigata Prefecture, into a 300mm manufacturing facility for silicon photonics (SiPho) and advanced optical packaging (i.e., bonding electronic integrated circuits with photonic integrated circuits), as well as expanding the output of SiGe EICs (Silicon-Germanium Electronic Integrated Circuits) and SiPho PICs (Photonic Integrated Circuits) at 300-mm Fab 7 near Uozu, Toyama Prefecture.

Fab 7 is already fully qualified and is in mass production of various SiGe EICs and SiPho PICs using various process technologies, including the latest TPS65SG and several other TPS65-series 65nm-class SiGe fabrication nodes, as well as TPS45PHD 45nm-class SiPho manufacturing technology. The plan is to expand Fab 7's output as significantly as possible to meet growing demand for optical engines by the AI industry. Such an approach enables the company to add output progressively as additional equipment is installed, rather than waiting for an entirely new fab and process flows to qualify.

Track One is scheduled to reach full production readiness in the fourth quarter of 2027. 2 billion in net profit in FY2028.


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