TSEM - Earnings call transcript Q3 2024 | Tower Semiconductor Ltd.

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Operator

Good morning, good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's Tower Semiconductor Financial Results for the Third Quarter of 2024 Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today.

Joining us today are Mr. Russell Ellwanger, CEO; and Mr. CFO. Shirazi, Oren like now the over conference I to Ms. to would turn Investor Vice Senior Levy, Relations. President Noit of Please go ahead.

Noit Levi-Karoubi

Thank results the XXXX. conference and call you, welcome for third to quarter Tower financial of

the some XX-F like factors Securities Exchange forward-looking those Securities update be are currently different are and available cause subject risk statements. with uncertainties remind would actual call and and I disclosed risk Tower uncertainties expected. X-K fully to filings Authority. Israeli no that such website. begin, during assumes also and this These Forms we as the and you Before as our from are well on that factors Commission our forward-looking statements to any results made obligation filed in with may They be to could to

call Please earnings third the prepared data accordance with reconciliation to results of tables may be and GAAP. financial Securities financial measures. considered the release in reporting financial in these include as in XXXX these related requirements and Regulation note explanation tables that and financial earnings certain The adjusted also U.S. information today's that have been quarter and measures financial a G with of measures the under The non-GAAP full Exchange established include the Commission. and GAAP measures financial of this non-GAAP

into is integrated conference presentation is This also call. webcast accessible convenience. supporting today's company's a complements have our website that We and deck slide for on today's your

call Ellwanger. please Russell, turn Now Russell I'd go like to our the Mr. CEO, to ahead.

Russell Ellwanger

delivered a quarter welcome, quarter you performance. XXXX call, conference our a And joining financial Thank third Noit. you, everybody. strong Thank in which we earnings for

in offerings AI result other our our an center and an our revenue. any unique We've driven should incremental quarter, history, for growth requirements. that record this product fulfilling increase a offerings in compared offering this as to mainly reached customers' data by demand midterm short-term dollar unprecedented seen offering high-speed our During in

Revenue and approximately $XXX with million, a stated years of for quarter-over-quarter the profit have reached of million we the which $XX net At X% of growth, growth margin year-over-year quarter. begin, through net third achieved target XX%. a X.X% representing third sequential quarterly quarter we a about

pleased guide with trend fourth a continue year We're plus/minus guidance about and versus of to $XXX QX quarter the Fitch million year-over-year XX% range the and to midpoint a this growth XX% growth. of mid-range X%. QX within represents

We over doubling continue by other third revenues infrastructure to our data demand AI QX experience approximately in 'XX in high-speed corporate business, center data the very XX% optical communication in for revenue, RF in QX 'XX primarily our used to and transceiver close and growth of strong increase driven in representing applications. quarter the

over market with optical with transympetamaplifiers such photodiodes. the $XXX adoption amplifiers, annualized a Xx in XXXX high This run XXXX revenue photonics. a have Tower in new $XXX rate million over modulators fretegrated products higher at data both QX being growth approximately and photonics Silicon for where germanium such revenue XXXX as with silicon drivers Sipo of volume, resulting expected this Today, million. serve a 'XX as for of shipping XXX We and forecasted we to are and will keep electrical market silicon growth, continues components, rapid over rates. see

component. lanes second per XXX on per operating of each products products X a gigabit several parallel for of As terabit speed gigabit XXX while are of X.X are products doubled at with X ramp X.X with begun customers. latest operating this technology that second quarter, our built we've of parallel the each cheap lead built production lanes, XXX

Tower X.XX demanding terabit XXX production first knowledge, photonics-based technology for the #X to innovation with believe modulate needed and integration to foundry component the and and gigabit While silicon volume photonics X today, our lane in the X.XX teams in similar process continuous silicon support by the versus lane, performance also products. is abandonments. the count We remains requires

Looking terabit that technical per a to rely we enabling on partnership innovation, per forward, continue second will a X.X speeds technology towards for strong doubling of again customers with XXX R&D lead gigabit lane. introducing

copper Our germanium growing photonic into and the only both not due short-reach that due strong above but silicon to an cables is to are are also as silicon transceiver, optical transceiver interconnects. germanium for built optical factors growing the demand advanced business silicon mentioned market active for components

be shortage cost further our to both both benefits we cables from growth. are to Based on seeing Antonio are signal fab room optimizing we a office are germanium in silicon typically to customers, both clean for strong at to as our germanium XXX-millimeter and silicon copper the transceivers in serving families adding currently substantial or use copper San improve Makalima enable for of and many compared Cycle of optical additional applications driver retimer and Active demand speeds, existing platforms, factories, XXXG used cables integrity and we high performance and where space qualifying cadence.

XX-nanometer power photonics CMOS, have for lower communication released lower loss to enables schemes modulation and higher precision phased supporting integrate analog array for and customers XXX-millimeter PDKs silicon using noise for higher germanium, components. which We RFICs complex for CMOS, also increasingly circuit a an silicon application, density, lower

corporate predominantly XXXX. SOI, of market quarter XX% of In the which our approximately in third the revenues RF RF represented mobile

We Agrate and transition to factory. to capacity RF millimeter continue as outpaces our XXX-millimeter SOI ZXXX new our customers in demand capacity

in further are the deliver to tens to support the RAB in to this We seeing production millions from order QX of a first revenue market. of expected growth factory of dollars of couple we in XXXX our expect the Agrate with

prototype and continue Agrate XX RF directly TPS as industry on now with with we products. best advanced to RSE platform, our available mobile from acknowledged addition, power customers next-generation most for In customer handling well RMCF

is strong additional release mass leaders. for Our newly modules, amplifier from we WiFi a Broadcom a platform, and which the grades, amplifier, with low-lows on receiving announced and finisher front-end market die, power triple-play RFSOI production switch single press interest

XX% XX-nanometer as enables which quarter corporate the strong third handsets voltage, we our in and to our in which us see have in to revenues discussed higher power XXXX platform, represented markets of Our addition lower in prior enter industrial continues other and BCD quarters, in and of volume our and consumer segments. voltage higher to growth devices, opportunities business, XXX-millimeter automotive

growth. We for Albuquerque And are production power growth to pleased years our have to certain handset available, this anticipate to products in to in provide in anticipate ramped high technology are come. Albuquerque enable strong to and report in now Japan that beginning large given this we factory business qualifying volumes the capacity further our XXXX. We facility for our

customers and year our years machine third has QX rate. revenues expected which the of XX% as displays, in sensors but in to represented growth, we happened Moving not the rather This through particular, run imaging of from end, corporate half vision. the business the stable quarter. serving second remained At

XXXX Show about of based is month's optimistic shutter, wins, particularly are CIS XXX based our customers last in ultra-high Among with our VSI Our resolution Stuttgart. these showcased growth a Vision new sensor, global wins upon and leading wins XX-nanometer stacked and upon one by customers megapixels platform. XXX-millimeter XXX

with VR X In XXX-millimeter market currents the X tape products customers very extensions to large next and are we on low display capacitors. AR out and to the state-of-the-art with new full expected engaged transistors, silicon platform our X-volt high-density year with lean our leakage displays front, OLED and with in

utilization quarter growing X, Fab about announced, in buys. fab Fab XX% XX-inch for operationally Our X germanium at well build-out XX% X-inch demand previously time X as products. the will last forecasted cleanroom for rates consolidated and and repurposing each photonics was third Fab into the Fab continually as about the be meet silicon as concurrent and silicon capacity were for with entering to

X currently XX%, Shirazi. the capacity was X-inch XX% was XXX-inch with our With XX% turn at call germanium activities CFO, please? at X, loaded that, increase model. real-time our Oren silicon certain utilization. photonics XX% bottlenecks, was X-inch at about fab the to operational about in I'll targeting Oren, Mr. to full Fab fully Fab reducing a silicon Fab

Oren Shirazi

sheet. financial we results Hello, and our balance Russell. you, today, everyone. Thank Earlier quarterly released

For $XX reported reflecting net $XXX $XX margin. of gross of profit million of XXXX, million, $XX revenue we million, the million, operating XX% and of profit third quarter of profit net

for third million quarter compared target today's that the for of revenue quarter-over-quarter pleased $XXX considering XXXX fourth to of revenue quarter and the stated to were of second XXXX. report $XXX million. of growth million revenue reported quarter guidance in I'm Revenue $XXX our we XXXX the achieved midrange quarter past our

million was in million to operations $XX profit third $XX profit to Operating relation the in compared million which quarter reorganization. restructuring included Japan compared was Gross $X prior quarter, in the million prior $XX $XX quarter. of million the income to XXXX for

basic diluted quarter XXXX, and profit $XX earnings $XX a share operations million, and per of XX% reflecting reflecting in Net net our million, of share included or profit margin of diluted compared second net the basic $X.XX $X.XX income reorganization. million earnings Japan from $X.X to net per which was

sheet future to Moving and and cash CapEx balance plan.

comprised totaled $X.X the depreciation, of equipment XXXX, compared of to assets end fab $X.X As billion our assets at assets. predominantly of and $X.X balance sheet of billion of XXXX, of the of comprised end as $X.X fixed net September billion primarily billion current of

of of multiple at the is reflecting which $X.X shareholders' equity are about the strong current than larger Current and XXXX. asset September at by record very a liabilities end short-term ratio, assets reached billion

the following our strategic financial investments strong to enables aligned vision. Our plan opportunities in corporate us to are position that

Italy, Approximately partnership. items make invested allocated have in the orders in the Agrate date, and has Tower equipment and purchase equipment own of previously amount announced To XX-inch and placed of following investments all we this aggregate STMicro that $XXX other for to total have million million the required. in already of CapEx own $XXX been cash fab will

million The remaining coming quarters. the to be paid $XXX in are X expected

fab, we that will In us ramp other capabilities up invest and to have and New to capacity for CapEx to equipment million addition, in Intel's items previously to acquire own as announced, $XXX our customers. enabling Mexico up committed Tower

the $XXX capabilities as these are in FIFO we for there and XXXX. of our This expand technologies is growing in end of forecasted the ramp-up Furthermore, qualification and million XXX-millimeter plan the investment we customer XXX-millimeter million until capacity announced today, be to demand. fab, to of $XXX paid and and XG CapEx installments our executing

investments, including plan presented $XXX steps and year to the towards this in all installments model our financial today's of and investments announced as the XG company that strategy end million previously above towards X I within expected business are XXXX. by FIFO the wish achieving Payments November and CapEx in note until are ago.

net annual In we and That per facility, annual Mexico capacity be our $XXX $X.XX which revenue a existing New million profit. outlined at fully and annum. and built loading our facilities operating could the achieved could $XXX result and Agrate to-be-built million billion newly profit target model, of by the in

back like call I'd to Now turn the the to operator.

Operator

Instructions] Group. of questions Mehdi come line from The Susquehanna Hosseini [Operator from the International

Mehdi Hosseini

Two and wafer follow-ups a here. than I gross I XXX #X revenue Should mix and that mix? gig want opportunities, assume much revenue the have is better to understand the Slide premium, plus. because ASP of we especially to the And follow-up. go with higher profit and

Russell Ellwanger

sorry, the understand higher I'm the what is next? mix I what The didn't question. than quite

Mehdi Hosseini

On than presented the more slide significantly than and #X, with I'm And between a would Slide mix higher less revenue that but the of gig a assumption XXX mix gig? assumption? have wafer same gig XXX Is mix fair higher. have applications the wafer ASP that under you higher XXX above -- is XXX, gig. for the than therefore, XXX

Russell Ellwanger

you're assumption, overall seeing is This The fair that slide but slide silicon sure the only a mix. is not copper germanium I'm It's cable. the active not for properly.

the XXX be platform advanced would more FTF doing or certainly, SIG MAX higher we using a So or XXXG platforms are we that XXXG. for a at itself than

the we're but for For XXXG. the going to for as an cables cables, XXXG already script, also or it stated ties I in above selling that are extent, mainly most of

speed. most yes, case but good is selling a had we're the what for are the that it's higher-end So platform. because advanced of ASP, of very But doing we're

Mehdi Hosseini

XX in $XXX give And silicon are photonics then you just like tracking those the doubling you Okay. looking million Can overall In $XX past, the million highlighted revenue All have an and market. seems here? opportunity us update to targets. it in at above right. you

Russell Ellwanger

think I the I hit shape, don't revenue year. mean Yes, but is expected $XXX this I to tug about did. million to and

for at midterm, short customer as forecast. sorry, demand stated we're -- beginning, certainly and seeing ever-increasing the customer So term, ever-increasing the midterm, I

we're that think our giving in we'll about go leaving So XXXX more ago. $XXX Thank above year I is run if ship already forecast run the we if be than the rate, to XXX%, providing guidance have I it's say XXX that from the doubling, but that rate safe question, XX expect million I silicon to good photonics a -- to had with anything the we Very think very XXXX. QX then targets, about above could plan I given quarter -- according said at or And forecast leaving already X you. a though. million without tracking

Operator

line questions Cody The Benchmark from the of Company. come from the Acree

Cody Grant Acree

Congrats guys Oren, the we progress. to clarification. Extremely Glad can on see guidance. one get Maybe, it. impressive just

$XXX say in 'XX payments the start when did million would said . You or installment 'XX and

Oren Shirazi

No, end of spread. XXXX. will be It

may and pretty assume now the XXXX. You linearly between of end

Cody Grant Acree

Great.

what you just You Can is is revenue tailed you about add making were that, just if to comment. slide, that to the when maybe $XXX the million incrementally your a level billion, represent? million off little that your bit support you $XXX expected $X.XX talk of

Oren Shirazi

this the the said that I to model. way, model. included the in is we Like the remarks, is within towards needed in included that's investment. model, do that also in the model CapEx closing and my No, By achieving

the no is do are to X.XX this in there depreciation order needed in long-term numbers. achieve because So we of steps additional to that that. the These

Russell Ellwanger

on reliant point the them to is are the obviously that -- that had what the foreseen aligned indeed we that wanting forward to customers model be road and the shows it's needing expected that the it would technologies is model, map and that partnership all on big that fact is with important have think that certain and the but to truly it aligned steps to going we long-term activities part upon happen I was was were that map investment going and and road was occurring. say in

Cody Grant Acree

Okay. Great.

of capacity? the if Maybe the to obviously, significant have capacity to contracts, can So ready just you capacity, going your SOI for you you've to types to to amount customers with of that and you agreements What they're talk that then about you getting there detail what of ramp there assurances or X.XX. have a not kind if that's for more and of kind got your out that fill. customer agreements support do be the

Russell Ellwanger

hold take-or-pays areas, RF take-or-pay the how a well times, -- strong need quarter year-over-year performed bad I the there's that to big at XX% agreement. RF very will No. XXX-millimeter involved? track a don't not Within a very module platforms, things QX a very single specific don't not think fourth forecast, present, space, people But But somebody good double-digit that not strong. are area the off the at we we market fourth But in take-or-pay over of look platforms. year customers buy and I Probably we I above is it to good for to. having a for our the many good. There records be QX, think is the relationships there XXX-millimeter versus the they see mean SOI, SOI that moment thing in are very, advanced have. at front-end really if trying ago to assurance seeing you of quarter growth. is believe the cover within fact seeing growth overly this had in we're many Is

the the being gaining that point seeing. share with themselves have customers So we're that that that market growth market of we're in working a type doesn't are

on long long midterm, that them fit and a people But stay to with In they to as else term. the tied function perform term, really front-end short serve long to multi-generation well is difficult the short match form and thing output as us. we're midterm, well, the in together someone assurance quite the that perform then and having for So qualify very PDKs convinced the we're road with we map the we is performance. module. the in biggest well In in if simply they stay

so if initial have the to more very long-term that are Hopefully, any come answers quick less you're from to we we and during And if work real question, that customers we to Cody. they both success. benefit design through do asking So the take-or-pay first-time or But protocycle guaranteed that. not. that closely time go issues agreements market that

Cody Grant Acree

very activity? active we've NVIDIA. their the you you're been in at wafer speculated your a but potential in are hearing And strength uptake platform volatility color then Are your of lot XXxX you've changes any what might in been Obviously, seeing help. any seeing saying today, some That's copper for that lastly, given just Okay. helpful. the with cables grumblings NVL regarding some market

Russell Ellwanger

Very of indeed you on change. a at mass a put we certain in line perceptive have some and hold have to wafers level been offer that

Cody Grant Acree

far as What entail Russell does your as output? that volume

Russell Ellwanger

not going just keeping It's waiting all. a a at question it's think new much a for mask. I point at difference wafers inventory make to of certain

Cody Grant Acree

are about So way changes to change mass Is the at be it? that would deployed? copper cables level how the the think going to

Russell Ellwanger

We'll change the output parameters.

Cody Grant Acree

there, Any color Russell? other

Russell Ellwanger

that's think Pretty color, I No, actually. good

Operator

line Richard Capital. The come questions Craig-Hallum the Shannon from from of

Richard Shannon

contributor Great on results. the first to here, if here. about a revenues material? still going expect -- material growing I of wondering by Is do you germanium the that from is noticeable point, infrastructure think? doing guess to talking question well is timing the that the end silicon you that a be that my timing it be at I guess contributor to base small is so Great Or year. see side that's X.XX. next

Russell Ellwanger

think material. honestly I be it will

is of at they year. X XX% where look XXXG XX% XX%, this market XXXG the reports market the had analyst ago, all you of from for really XXXX years If probably being for

do I think fast map samples, that think speed hyperscaler the So implement. willing very of have very, now. good data course, end center the to the is has maker, the But on we working fact to I be road

of and be revenue maybe it the second next half So quarter. year amount starting will the in a material yes, in believe second of I

Richard Shannon

Maybe That's on question Perfect. very Oren Okay. gross helpful, margins here. Russell. for a

probably short-term last at here. fall-through just looking that I quarter, But quarter-on-quarter. know margin. at to Just you the basis very great a fall-through it not nice it's on look saw

This was silica or coming from you quarter I XX% was a quarter, well. silicon yet. here, so. bit is Last It very XX about benefit calculated -- Putonics doing said the like photonics less seems

Can resolve difference us seem the X understand that here. can't you other. contradict to I big why each So those help

Oren Shirazi

Yes.

also as to think the the that mentioned we his related the FIFO. CIS, know, you Russell is remarks, was Masensor CIS, like not expected, margin that I the like he and in high

is QX was in Impact increase by offset very in somehow so on the So -- margin nice. which [indiscernible].

Richard Shannon

mean I Oren. didn't to you, interrupt

Oren Shirazi

no. No,

Richard Shannon

think Okay. help to quarter your mobile, Russell, doing here, that it going together? about your is would do normal next I it we me, in dynamics certainly well, and looks these good but here. kind maybe I -- how year infrastructure help expectations and our think poised believe first the but can and RF power to of excuse image Wondering looking anything So expect models guess How all year. fantastic here we seems I trying put forward linearity like pretty just or down. into you through about we about don't here. next inflect growth a framework us mean to you pretty what RFSOI businesses project sounds is growth know can you as get Generally, think kind utterly of think And a people seasonally do RF their quantitative, here? if growth probably about then is seasonality the I year. sensor like

Russell Ellwanger

the by margin. It also the imaging, comes SIFO strong. high that and substantially markets Oren is margins. actually which higher grow SIG than SIFO the extremely and in very grow the high will Infrastructure served realizes mentioned very

and in that the So as be growth, will everything to of will year far from grow quite I the SIFO see well as are throughout we substantial customers think continue XG forecasting. it contributions the as

giving had On was would as our our good being third which imaging but we for the very the guidance particularly customers, not that putting a release forecasted we QX stated earlier us. but or did we imaging, not We'll that within customer it's substantial quarter. the low were QX, when expected the level, now fourth plans. And now, we at good forecasted any fourth in XXXX. for a they quarter in the believed for said, we same that and demand as we're be we're by certainly growth imaging, QX a increase comes have into mentioned as be our for was a quarter, QX are the give hit for but to had in color over right our third on happen. a not our increase, plans if of staying going counting machine fantastic, increases The But the and that not imaging vision plans target I'm level XX% QX. at own on. up XX% what they plans, or at would

market On has is the overly itself not RF strong. SOI, the stated

overly grow next much it mobile customers I but some players SOI. doing. really don't we're are would certainly be will how growing. handsets. that gaining will expect optimistic We And have what's there that that market we'll big X share. itself, be will releases that the that, There I depends of think not versus gave that I'm the happening XXXX. in about XXX-millimeter. market not be of in don't recently, RF I market growth that the on XXX-millimeter sure market will know growth, Our in overall expect XXX-millimeter year. in we're growth that

will other So with SKUs customers. we're additional existing I for share the And market to market gaining gaining of the addition serving are market, because capabilities. outperform some in RF mobile think, that customers even and customers,

next the year. So we year within when release how the be much to know give be QX, reason possible. as will sure closer a like there. don't year, we grow. X give And before how to can I target not we'll color much that I'm the And that's really I that we for

or In is of it lead high the to So a the extremely suppliers I the right at least market, 'XX half now, from flavor. give saying But able in place opportunity that's whether look itself we'll what doesn't or share power be it. to where market always front-end first we're mobile good a for strong are think do like module free really And are growing getting the very market it's grow. Albuquerque. qualified we growing have we not, really in XXX-millimeter that now have strong platforms market capacity And not from to is the position. because platforms, starting

that easiest to this additional expect sure. your say growth see is we'd share which can But we sure grow I'm that within where of past. for it's way at weren't in good certainly in this BCD To I market that potentially by And that think into business certainly, I extent? to XXXX. So as as what not well, want we point. But at the increasing done entered markets beyond say served BCD a don't I I'm us market, if the serving the in much I it's we've to answered going point. XX-nanometer but and question think not your that. the

Richard Shannon

the here growing but forward helpful. perspective always question, final and understand and balance just for expect here. here measures we us is line noting best your is you've been strong early, it's jump helpful and there's to obviously, by all sheet the My is on very position a cash and cash I'll That going at looking

have any to of So usage technology process this for with to certain M&A operations you potential areas any or also forward either do company, I'm I'll wondering thinking that you strategic in way, augment going silicon realize that. I more photonics to you're here? for guess anything cetera, what power, et thought turn or about maybe cash your a And see

Russell Ellwanger

fulfill talk billion plan. in his always $X.X second with about first a start of as M&A, to But I part your to I'll question, in cash portion betting the talking we're M&As. then lot the he engaged of Oren because the multiple circa actively ended needs as could company this far think truly

slide greenfield. be And has acquisitions there cash positive. are we country at for company, the appear would opportunities as going multiple net at there's takes do, make the done. that an cetera. capacity you We're years some to et extremely year, of and speculations as accretive to big opportunities, looking be do. positive a are all within first sense accretive truly engaged see But any would honest factory, about a to look builds think things always us into risk/reward person time that -- building et cetera, a that lot very at the profit to Now first that I to soon greenfield Certainly, few however, no a and and it meaning get foreign

do a So geographies, the pure why of takes with the it such certain of the first either consideration That's loss X, for a in which on a take doing greenfield financial activities. X different have to large the sense customers partner would with lot of certain it's concern capacity activity, than or years. a of conditions government over that is one a And to suffer conditions going that has with cash greenfield shareholders a and not -- capacity or increases, basis. our from always could to smarter make have

would in at to release, it can there material, technology on in. come It's off and is a digital road them, customers apologize our long. accretive easy But aren't would our lot I we're means right always to you're was on then and look have that looking false an open just what acquisitions, our becomes say good of as in is when map top and engaged time at at of It's to and is not and other like long X And I is before yes answer, anything, contain that's far X/X activities one we're not are to closing that they no. so in a engaged can deals. to and or help the it. rarely But look there's to it's a at expectations case. X ineffective or least shareholders closing to buying. which a be maybe the required very pursuing it which qualifications it's to say -- It's engaged As what really and those grow But be very again, set looking. we now we're customers release before and hence that to accretive products something that actively deal,

been We were I that grounded would come close viable that something, the maybe very is for doesn't company. could must matter And about that the within to And We something how looking. to one and you pencil. it pencil, think numbers. be for no doing be actively shareholders ultimately, doesn't not have past we agreements the if excited something always hence, month. in

Richard Shannon

great always. I detail, the I the Congratulations line. jump as appreciate all that will on results. on Russell

Operator

come from from line the questions Nicola Doyle The of Needham.

Unknown Analyst

a question ACC. on Also

So strength germanium midterm capacity not silicon to enough related short-term was some business beyond earlier is the answer go demand decisions seeing rack to for to And opportunity. customer. a of think horizontal and that mean application that this gave new the invest the would significantly I strong the beyond X in can ACCs. But Cody would to I'm to you're assuming rack your you related X go and this and demand CapEx all at

use case higher we've tour newer applications So a also and speeds. a use case to at Nick or using heard vertical inner rack

the what you color can could applications any on be? So other give

Russell Ellwanger

germanium is for the To bulk of the begin right? It's ACC, silicon and not TIAs with, our drivers. for

that's bulk. is the ACC revenue. incremental So

exactly the copper we ACC volumes they revenue that applications for what the within real high active pizza itself, within copper entire are SIG granularity. lead after the are don't what the also couldn't transceivers box what gamut think also transceivers lead demand that in to sufficient. cannot they're active good and Within cases, the for that the that give Rack, the say with I I'm a position not that cable ACC, serving with state customers SG buying at as really those very many Now customers now optical going rack-to-rack are is have ACC, doing application is the I our for their have But are to using tremendous they're cables. color that that incremental for of I itself

Unknown Analyst

and SIG utilization. that XX% SIFO X Okay. on a I guess, is capacity I target one, the just basic Fab mentioned. And Still next question believe, then at is, with helpful. And full you XX%, increase. a

So you're to refilling this million, on on this certain the demand, just SIFO and going and you'll contemplated G I capacity explanation that and that's how XX an with that's increase points. just $XXX and happen. a out little utilization? how is Big taking it in guess explanation

Russell Ellwanger

this the were cetera. In Fab, the can any bottlenecks, to maximize A fab space demand you utilization silicon Sipho silicon present fab volume you bottlenecks is we in say that to that you're that a capacity but having certain flows the have certain move or we There There's and some qualifying very SIPO. moved relieving the germanium by tools to ineffectively. that amount moved up whatever previously. of in certain use photo mixes and gate good The full percent. steps, capacity very certain niche doing et having the the nertutilized certain enabled that chambers, you against using maybe to certain adding are into and other we've for them for to tools of are always Processing capacity. a photonics. factory SAG steps, than at photo as processing little factory. other that come certain from And plus tools processing certain SiGe is, fact at which are unique maybe steps. have. case, deposition flow have Otherwise, that photo such what to question. Max bottlenecks output, We're There's bottleneck from we've could and done specific doing capped the a of on in

chambers the which, specific photo in get closer relieving order to full over added the time, or which hence, of an get to full model to operation. SIFO. And bottlenecks to XX% the in some chambers chambers be to our is SIDI or will we've capacity, and adding the repurposing float So capacity,

at target that's of full to XX% still good be and our the allows cycle photo fab a times, So is. moving what

to are that's enable given any also We usage of factories, using further $XXX other million and capabilities the part factory. some in of

We line constrained other transferring that factory. deposition a early if constraint to in up the start in in the to deposition And to X. is in have the ability factory doing on the by deposition doing deposition early free be elsewhere, one a the that's

fleet. million of the $XXX is through the relieving well So optimizing that's part bottlenecks as

Operator

the from line come of questions Zacks from The Thompson Lisa Small-Cap Research.

Lisa Thompson

Welcome to you revenue growth. back

Russell Ellwanger

Thank you.

Lisa Thompson

chunk your in taxes? we a in that financial all next activity XX% rate varied for unless to different going supposedly you're you thinking given What QX were -- year. happen. tax And also, X be rate that's going This year, not do I about think countries. pay thinking But we your year's QX about tax question, was XX% have what to Oren. the big really

Oren Shirazi

tax that for there in is model of a of location a mean the is in are I to in Israel Israel, Because zone. factory. Yes. tax tax. that's our big what's payment parent X.X% tax First, no regime called of No, our because preferred we a expectation a chunk the any the company

Italy, headwinds is but will Japan, to expect operate in have In we this that XX%. it's spoke to U.S., I preferred that start about of Russell our of So we will tax it's calls, wouldn't only X.X%. it's previous rate Agrate. those headwinds start XX%, XX%; In in when because

profits we quarter coming not in and have also. Agrate year to in So sure the coming expect in the for

we XX%. will those not pay So

Japan. with and are company. parent XX we so And left in U.S. the XX in X.X% in the

in you can income. XX% average As to efficient, rate from depends I modestly between and is the XX very quarter. region our tax we're the usually believe, see It financials, X that on is our which depends

to around have and it at manage we succeed XX% So usually. it

very benefit QX had, results. a there this which that that year, settlement was was in a from onetime For we successful had with we to audit that reached X we a respect tax

benefit a reasonable. a which are had we QX QX was tax you see, 'XX, onetime already, onetime and in QX rate as So

For XX%. this quarter was previous XX%. quarter about example, about The was

what So that's exactly said. I

you line, year. onetime XX%, benefit, to XX%, to QX, reasonable. has XX%, good that just bottom Very and XX% for a it's So at the model XX% exclude which if coming think I we are the

Operator

will closing his Russel remarks. This Mr. Ellwanger conference for the concludes back our session. to turn now Q&A I

Russell Ellwanger

everyone, thank, for the extreme and as for activities, securing in both for you, strategic has questions. of to conclude company, financials Thank strong been good future. participating. group analysts customer in our call, really end I very the the performance year To XXXX a thank in and a all today's promises of

to We the on to growth before us. continue execute are confident exciting opportunities

first maintain silicon photonics customer in with year collaboration, leadership silicon deep germanium as enable capabilities us a to unique and paired Our trusted partner. foundry

our power the intensifies, segments. investments demand As and strong foundation RF speeds data a setting higher innovations advanced future expansion, for for management especially in and are

of balance stakeholders. a quickly accretive CapEx committed capability be or act it strong future exceptional to or position excited our sheet puts investments capacity to a on driving in for We're Our our remain variety us about partnerships. and value

today. customers season. happiness your holiday wish the with efforts January and our their much. Needham at XX passioned very Again, our continual Growth York. thank in for capability-based We we'll a into and New conference. joining peace, at us in placing for in be the in you this Annual partnership their XXth will faith us all XX, for worldwide Moving On everyone XXXX, employees for and security. Thank We will you to participate their pleasure us. in you support meet Conference and It worldwide our success thank

Operator

Thank today. for for participating. conference our conclude you does That

you. now all may disconnect. You Thank

Tower Semiconductor (TSEM) 13 Nov 242024 Q3 Earnings call transcript