Tower Semiconductor earnings: third quarter 2026

Tower Semiconductor, which makes chips to order for other companies, had a record third quarter of 2026. Sales rose by a third on a year earlier to $526 million. Profit roughly doubled because each dollar of sales left much more after production costs. The company expects another record of about $600 million in the fourth quarter. The one shadow is cash: heavy spending on new factories took all the cash the business made. ¹

Against what analysts expected

Earnings per share were $1.05 after counting all shares that could be issued, about 7% above the $0.98 average of six analysts' forecasts compiled by Nasdaq's earnings calendar. ¹²

The strong points

• Sales reached a record $526 million, up 33% on a year earlier and a further step up on the previous quarter. ¹
• Gross margin, what is left of each dollar of sales after the direct cost of making the chips, rose to 34.0% from 23.5% a year ago. ¹
• Net income, the profit after everything, was a record $120 million, about 2.2 times the figure of a year ago. ¹

The weak points

• Free cash flow, the cash left after running the business and investing in it, was slightly negative at about $5.5 million, against a positive figure a year earlier. ¹
• Part of the cash came from customers paying in advance: advances due within a year reached $248.9 million, up from $25.6 million at the end of 2025. ¹

What the company expects

• For the fourth quarter the company expects sales of $600 million, give or take 5%, which would be 36% above a year earlier and another record. ¹
• It now aims for its silicon photonics chips, used in high-speed data links, to reach a yearly pace of $1.1 billion in the fourth quarter, slightly above the $1 billion it spoke of last quarter. ¹

Our verdict on the quarter

A strong report. Record sales and a doubling of profit came in well above what analysts expected, and the company expects another record quarter. It gave no earlier forecast that it could have raised, and its growth spending used up all its cash this quarter. So, in general, a strong report from Tower Semiconductor.

The results as published

• The results release itself
• The filing it came with (SEC)
• The previous results, for what it forecast then

Notes

1. Tower Semiconductor's results release, 2 November 2026: sec.gov. ↩
2. Nasdaq's earnings calendar, 2 November 2026. ↩