New York, Feb 5, 2026, 13:00 EST — Regular session
- Shares of Tower Semiconductor climbed roughly 7% midday following news of a partnership with Nvidia to develop 1.6T data center optical modules.
- The company highlighted its silicon photonics platform, designed to boost bandwidth for AI infrastructure and networking protocols linked to Nvidia.
- All eyes turn to Tower’s Feb. 11 earnings report for clues on demand and the speed of photonics ramp-up.
Tower Semiconductor shares jumped Thursday following news of a partnership with Nvidia on next-gen silicon photonics aimed at data-center networking. The Israeli chipmaker’s stock surged as much as 20% earlier, closing up 6.6% at $129.29.
Tower is ramping up AI infrastructure with silicon photonics, rolling out 1.6-terabit-per-second (1.6T) optical modules tailored to Nvidia networking protocols. The key takeaway for investors: high-speed connections between racks and chips are becoming a bottleneck as AI workloads surge. 1
“Tower Semiconductor is proud to deliver advanced, high-speed technologies that support demanding data center and AI requirements,” said Chief Executive Russell Ellwanger. Nvidia’s Gilad Shainer, senior vice president of networking, noted the “exponential growth of AI” is driving a surge in demand for high-speed networking. Tower claims its approach can deliver up to twice the data rate compared to previous silicon photonics solutions. 2
Silicon photonics uses light, not electrical signals, to transfer data within and between chips. Simply put, it’s about sending more bits while generating less heat and consuming less power — crucial as AI clusters grow and data movement costs approach those of computation.
The announcement skipped details on financial terms, volumes, or a timeline for the 1.6T modules moving from qualification to full production. Traders are left focusing on the name dropped in the press release — Nvidia — and the significant boost in module speed.
Tower’s jump caught the eye amid a stronger chip sector. Nvidia shares ticked up 0.8%, the iShares Semiconductor ETF climbed 0.9%, and Taiwan Semiconductor advanced 2.7% in afternoon trading.
Tower sees leverage in silicon photonics programs: once integrated, they tend to stick. Yet, these projects often drag on, needing multiple tweaks before delivering noticeable revenue.
Still, risks remain clear. Bigger foundries and integrated device manufacturers are advancing photonics and high-speed interconnects too, and customer timelines can wobble when standards shift, packaging decisions evolve, or power constraints tighten.
The next major milestone comes on Feb. 11, when Tower will unveil its fourth-quarter and full-year 2025 results, along with first-quarter 2026 guidance. Investors will be watching closely for any figures or timelines that shed light on the Nvidia-linked photonics project.
