(Reuters) – Tower Semiconductor plans to invest an extra $150 million to boost production, the Israeli chipmaker said on Wednesday, as it forecast record revenues this year amid growing demand.
Chipmakers are seeing a surge in demand as economies recover more quickly than expected from the pandemic, with some sectors, such as automaking, reporting shortages.
Tower, which specialises in analogue chips used in cars, medical sensors and power management, said it would invest in equipment at its manufacturing sites in Israel, Texas and Japan to boost capacity for 200 and 300 millimetre chips.
“This equipment will begin to have incremental revenue impact during the second half of 2021, targeted to be fully qualified during the first quarter of 2022,” Tower said.
The company, which used to be called TowerJazz, earned diluted earnings per share of 29 cents in the fourth quarter, up from 19 cents a year earlier. Revenue rose 11% to $345 million, with organic growth up 17%.
Tower was forecast to earn EPS of 29 cents on revenue of $340.9 million, according to I/B/E/S data from Refinitiv.
The company expects first-quarter revenue in a range of 5% above or below $345 million for year over year growth of 15%. Analysts are forecasting $330 million in revenue.
The company said it expected sequential quarterly revenue growth through 2021.
“We are confident that 2021 will be a record revenue year for the company,” CEO Russell Ellwanger said.