Tower posts less-than-expected Q4 revenue decline
Israel-based contract chipmaker Tower saw its quarterly sales fall by 12.7% – better than estimates by $2 million.
The firm, which makes analog and mixed-signal chips used mainly in automotive manufacturing, reported revenues of USD 351.7 million for the three months ended December 2023, down more than 12% year-on-year. Gross profit for 4Q 2023 was USD 84 million compared with USD 87 million for the third quarter. Gross profit for the 4Q 2022 was USD 125 million.
The soft market for EVs is mostly likely to blame for the decline. However shares in Tower spiked the next day because the performance was better than anticipated.
For the full year Tower Semiconductor posted a fall in sales and profits. Revenue fell from $1.68 billion in 2022 to $1.42 billion in 2023. It was an eventful year for the company, thanks largely to the collapse of its merger with Intel. In its filings, Tower included $314 million from the Intel merger termination and $33 million in restructuring income.
Tower Semiconductor serves over 300 customers worldwide across diverse sectors including automotive, medical, industrial, consumer, aerospace, and defence. It is ranked seventh in global foundry revenue according to TrendForce. Earlier this week, it was reported that Tower is in talks with Indian government representatives about subsiding the construction of a fab in the country to produce 65nm and 40nm chips.
