Tower Semiconductor: Buy The Story, Respect The Risks

Tower Semiconductor Ltd. is positioned as a key specialty foundry beneficiary of the AI infrastructure buildout, particularly in silicon photonics and silicon germanium. TSEM's revenue and profit growth are accelerating, with significant capacity expansion underway and over 70% of new capacity reserved through 2028. Valuation is elevated (P/E 97, P/S 12), but ramped projections suggest a 2028 P/E of 20–25, assuming conservative utilization and excluding potential upside from Intel agreements.