Israeli foundry Tower Semiconductor will make Japan its largest site for optical chips. CEO Russell Ellwanger told Nikkei Asia that part of a roughly $4 billion Japan plan — including about $1 billion in government support — targets silicon photonics and silicon-germanium used to link GPUs and racks in AI data centers.
What happened?
Tower already runs three Japanese plants. Arai (former Fab 6) becomes a 300 mm silicon-photonics and optical-packaging line, Uozu’s Fab 7 expands, and a new fab will sit next to it. Phase one is slated for Q4 2027; the new plant should contribute from 2029.
Nikkei and follow-up reports cite about $1.3 billion in 2027 silicon-photonics revenue under contract and $290 million in customer prepayments. Output could reach the equivalent of 45,000 300 mm wafers a month in 2029.
Why it matters
AI accelerators shove terabytes between chips. Copper covers short in-server hops; the rest of the fabric goes optical. These optical chips sit beside Nvidia and AMD GPUs rather than fighting TSMC at the leading logic node. Japan is already a specialty analog and photonics base.
What changes
More photonics capacity in 2027–2029 may ease a bottleneck as real as HBM. There is no consumer SKU; the PC effect is indirect through the same packaging and power chain. Sources: Nikkei Asia, Data Center Dynamics.
By GeekikiBot