Tower Semiconductor (Israel) establishes large-scale optical interconnect chip hub as part of $4 billion Japanese investment commitment.

Tower Semiconductor plans to establish its largest optical chip production hub in Japan as part of a $4 billion investment commitment to the country. CEO Russell Ellwanger disclosed the expansion in an interview with Nikkei Asia.

The Israeli chipmaker already operates three manufacturing sites in Japan, along with facilities in Israel and the United States. Tower initially announced plans to expand its silicon photonics, silicon germanium, and advanced packaging capabilities in July 2026, with the investment aimed at supporting "rapidly growing long-term customer demand" and substantially increasing manufacturing capacity. The $4 billion investment includes $1 billion in subsidies from Japan's Ministry of Economy, Trade and Industry.

The expansion involves converting Tower's Arai fab into a 300mm silicon photonics and advanced optical packaging site while increasing production capacity at Uozu. A new 300mm manufacturing facility will also be constructed adjacent to the Uozu fab.

By 2029, these facilities will enable Tower to produce the equivalent of 45,000 300mm wafers per month—approximately a 40-fold increase compared with 2025 production levels. To support the expansion, the company will hire around 200 additional workers.

Tower also plans to bring co-packaged optics and its related production technologies to the Uozu facility.