Photons Are Flying: SiPh Ramp Ahead of Schedule

Research evidence excerpt

Photons Are Flying: SiPh Ramp Ahead of Schedule

Company Report

May 13, 2026 Tower Semiconductor (TSEM)

Rating: Photons Are Flying: SiPh Ramp Ahead of ScheduleNEUTRAL

Price:

$270.77 Net

12-Month Price Target: ● We view TSEM's Q1 results and commentary as positive, and we very much

$300.00 (from $140.00) acknowledge we missed the velocity of the ongoing transition to optical

datacenter networking, when we made the decision to shift to a NEUTRAL view

on the stock late last year.

Analysts ● At the same time, with TSEM having appreciated greatly (both following OFCMatt Bryson

(617) 695-6302 and post earnings), we aren't quite comfortable enough with potential upside

matthew.bryson@wedbush.com (vs our 2028 estimates, which we are now using to calculate our PT) to upgrade

Antoine Legault, CFA, CPA the stock at this juncture.

(626) 497-1619 A Smooth Ramp Aheadantoine.legault@wedbush.com

● TSEM's announcement it has secured $1.3B in 2027 customer commitments

in our view supports existing buy side expectations (which we believe had

Company Information - Hardware significantly outpaced consensus numbers), particularly, given management's

Market Cap (M) $24,915 suggestion that customers are forecasting demand well above commitments.Enterprise Value (M) $23,894

52-Week Range $37.48 - $232.67 ● And management's suggestion that we will soon see an update to the 2028

(Intermediate Term Model) bodes well for future expectations with a revised

REV (M) in $ forecast certain to include additional revenues attached to the planned capacity

FYE Dec 2025A 2026E 2027E build out at the 12 inch Uozu fab. Q1 Mar 358.2A 413.6A 581.4E

Previous 406.2E 508.1E ● We see the better than expected Q1 results (particularly higher margins) as