Tower Semiconductor to invest $4 billion in Japanese ops to set up massive optical connectivity hub
Tower's new optical connectivity hub in Japan will increase its output by 40 times in 2029 compared to 2025 level.
Tower Semiconductor has announced plans to invest $4 billion in its Japanese operations to establish a large-scale optical connectivity hub. This investment will involve converting an idle 200mm fab in Arai, Niigata Prefecture, into a 300mm manufacturing facility for silicon photonics and advanced optical packaging. Additionally, the company will expand the output of its existing 300mm facility near Uozu in Toyama Prefecture.
By 2029, Tower's Japanese capacity is expected to reach the equivalent of 45,000 300mm wafers per month, a significant increase from 2025 levels. The project will also create around 200 new jobs in Japan. Tower is providing $3 billion of its own funds for the expansion, with the remaining $1 billion coming from Japan's Ministry of Economy, Trade and Industry.
This investment aims to meet the growing demand for optical connectivity in the AI industry and position Tower as a leader in co-packaged optics. Tower's plans reflect its strong position in the contract production market for optical communications semiconductors, serving major industry players like Marvell.
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