READ THE FULL TSEM RESEARCH REPORT
Tower (NASDAQ:TSEM) continued year-over-year and sequential revenue growth in Q2 2025 and expects acceleration throughout 2025 as capacity comes online. This includes capacity in Italy, Texas, and Japan. The company believes one of its competitive advantages is it can switch production to facilities in various countries as demand or tariffs change. RF Mobile has always been the foundation of the company, but last year’s inventory correction dampened revenue growth; this year, more normal revenues have returned. In the first half of 2025, RF infrastructure has contributed $77 million in incremental revenues of the total increase of $52 million. SiPho contributed $105 million in revenues in 2024, and management now expects it to more than double in 2025. The handset market is predicted to be flat in 2025, but Tower still expects its business to grow, partially due to its envelope tracking power management product.
For Q3, Tower guided to revenues of $395 million plus or minus 5%, which would result in accelerating year-over-year growth. Despite much discussion, the company has seen no effect on business due to current or pending US or reciprocal tariffs. Very little, if any, of Tower’s revenues comes from products shipped into the US; most are shipped elsewhere in Asia for final assembly into end-user devices. As of last night’s closing, price, the company trades at an enterprise value of $4.0 billion, or 2.6xs EV to estimated sales for 2025, versus its peers, which trade at 5.2 times.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.
