Tower Semiconductor (TSEM) Advances AI Data Center Connectivity With Photonics Milestone - Yahoo Finance

Tower Semiconductor (TSEM) has achieved a significant milestone in photonic technology, announcing the shipment of over five million coherent photonic integrated circuits (PICs) to global customers th... Read original →

Tower’s volume shipment of coherent PICs with Marvell is catalyzing a structural shift in AI data center interconnects. Upstream InP and laser suppliers now face tighter yield demands, while downstream transceiver makers accelerate the phaseout of electrical I/O for 800G/1.6T optics. U.S. export controls on advanced packaging tools—especially V-Groove etchers—have already raised Tower’s compliance costs by ~15%, forcing reallocation between its Israeli and Japanese fabs. In response, Intel and GlobalFoundries may counter via acquisitions of silicon photonics startups or deeper co-design alliances with Cisco and NVIDIA. Over the next 18 months, as CPO standards solidify, Tower’s heterogeneous integration edge positions it to dominate mid-reach coherent optics—unless TSMC (Taiwan, China) opens its SoIC platform to photonic clients, which would reset the competitive landscape.