Israeli chipmaker Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE:TSEM) has ended its collaboration with Adani on a chip fab in India. At the end of April, “Reuters” reported that Adani had halted talks with Tower over construction of an Indian chip plant.
In last week’s conference call after Tower published its first quarter results, CEO Russell Ellwanger clarified that this was not entirely accurate, and according to him, it was Tower that stopped the project, at its request, and withdrew from the collaboration 5-6 months ago. According to Ellwanger, Tower had good reasons for withdrawing from the project, but did not elaborate, due to confidentiality agreements. In any case, he stressed that Tower had not published any report on the matter, because has never been any official agreement.
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Investors in Tower have not been troubled by the development, and since the “Reuters” report, the company’s share price has risen 14.9%, including a rise of 2.5% after the first quarter results were published last Wednesday (despite a decline on Friday).
Tower reported first quarter revenue of $358 million, up 9% from the corresponding quarter of 2024. GAAP net profit for the first quarter was $40 million, and non-GAAP net profit was $50.5 million, reflecting earnings per share of $0.45. In the second quarter of 2025, Tower sees revenue of $372 million, up 6% from the corresponding quarter of 2024.
In response to the financial report, Oppenheimer maintained an “outperform” recommendation for the stock, with a target price of $60 – a premium of 46%. According to Oppenheimer, Tower’s stock is underpriced, which does not adequately reflect the growth potential, and constitutes an attractive investment opportunity.
Published by Globes, Israel business news – en.globes.co.il – on May 18, 2025.
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