Tower Semiconductor Faces Q4 Revenue Decline Amid Automotive Sector Uncertainties
Israel’s Tower Semiconductor, a contract chipmaker, faced a downturn in Q4 revenue, attributing it to uncertainties in the automotive sector. The Israel-Hamas conflict did not impact its operations or supply chain. Despite this, Nasdaq-listed shares rose 8.1% to $30.95.
Several chipmakers, including Tower Semiconductor and European company STMicroelectronics, anticipate a supply glut affecting the automotive sector, leading to reduced demand. Tower Semiconductor, specializing in analog and mixed-signal chips for automotive use, reported a 12% YoY revenue decline to $351.7 million in Q4.
The company plans to phase out certain lower-margin products, aiming for strategic adjustments. An earthquake on January 1 temporarily halted operations in its Hokuriku, Japan facilities, causing tool damage and affecting work in progress. However, both factories have since resumed full operations.
Tower Semiconductor Forecasts Q1 Growth Despite Setbacks
Tower Semiconductor forecasts Q1 revenue at $325 million, allowing for a 5% upward or downward range. Despite the earthquake, the company exceeded profit and revenue estimates in Q4, with CEO Russell Ellwanger noting that growth is expected throughout 2024.
In 2023, Intel terminated its $5.4 billion acquisition of Tower Semiconductor. Despite this, Tower secured a deal with Intel to utilize a New Mexico factory for producing 65-nanometer chip flows for power management. Customer prototypes are expected by the second half of 2024. Ellwanger acknowledged the missed opportunities from the canceled Intel deal but highlighted the positive outcome from the subsequent arrangements.
Read More Innovation – Tech Foom
