Tower Semi forecasts upbeat quarterly revenue, signs $1.3 billion in AI chip deals

May 13 (Reuters) - Tower Semiconductor TSEM.TA on Wednesday forecast second-quarter revenue above estimates and said it landed $1.3 billion in deals for 2027 to supply chips that use light to move data at high speeds through artificial intelligence data centers.

Strong demand for its analog and mixed-signal processors on the back of rising investment in data centers and AI helped boost the Israeli contract chipmaker's quarterly forecast, sending its U.S.-listed shares over 17% before the bell.

• Integrated circuits developed by the company are used by a wide range of industries including automotive, industrial, consumer electronics and communications.

• The company expects second-quarter revenue of $455 million, above analysts' average estimate of $436.4 million, according to data compiled by LSEG.

• Tower Semiconductor also announced that it signed silicon photonics deals worth $1.3 billion for 2027 revenue and received $290 million in customer advance payments to secure production capacity.

• It added that customers have committed to larger orders for 2028, with more advance payments due by January 2027.

• "We are confident in our path toward achieving our financial model targets of $2.8 billion in annual revenue and $750 million in net profit in 2028," CEO Russell Ellwanger said.

• Tower reported a 15% rise in first-quarter revenue to $414 million, beating estimates of $411 million. Adjusted profit came in at 65 cents per share, compared with estimates of 56 cents.

• In March, rival GlobalFoundries GFS.O sued Tower alleging the Israeli chipmaker infringed 11 patents related to manufacturing chips used in smartphones and other electronics.