Tower Semiconductor announced a $3 billion dual-track capacity expansion in Japan for 300mm silicon photonics, silicon germanium, and advanced packaging operations, backed by $1 billion in grants from Japan’s Ministry of Economy, Trade and Industry.
The first phase includes converting the Arai facility, formerly known as Fab 6, for 300mm silicon photonics capacity and advanced packaging. The expansion targets AI data center interconnect demand, where silicon photonics promises to replace traditional copper links with high-bandwidth, low-power optical connections.
CEO Russell Ellwanger described the buildout as a strategic bet on the optical I/O megatrend, with Tower positioned as a pure-play foundry for photonic integrated circuits. The company has already secured $1.3 billion in silicon photonics agreements for 2027 from its largest customers.
The investment comes as AI data centers push silicon photonics toward mainstream 300mm manufacturing, with EE Times recently reporting that STMicroelectronics and others are scaling optical interconnect technology to production volumes.
