Tower Semiconductor and Innolight Advance High-Performance Near-Package Optics for AI Infrastructure

The collaboration spans early production and completed design submissions for future product generations.

Rhea-AI Summary

Tower Semiconductor (NASDAQ/TASE: TSEM) and Innolight are continuing their collaboration on Near-Package Optics, with Innolight's first device entering early production. Near-Package Optics, or NPO, is an optical connectivity approach for AI infrastructure.

The device uses Tower's PH18M silicon photonics process at its California factory, leveraging its 200mm manufacturing platform. Innolight has also completed design submissions, known as tape-outs, for multiple NPO products on Tower's 300mm platform to support future product generations. The collaboration combines Innolight's optical connectivity designs with Tower's manufacturing platforms.

Positive

• Minor pointInnolight's first NPO device is entering early production using Tower's PH18M process at its California factory.
• Minor pointMultiple Innolight NPO products have completed tape-outs on Tower's 300mm platform for future generations.

Negative

• None.

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Market Reaction – TSEM

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Key Figures

First NPO device: 1 device Optical channels: 16 or more channels Silicon Photonics platforms: 200mm and 300mm

First NPO device

1 device

Entered early production using Tower's PH18M Silicon Photonics process flow

Optical channels

16 or more channels

Typical NPO architecture per device

Silicon Photonics platforms

200mm and 300mm

Tower platforms used in the collaboration

Key Terms

silicon photonics, wavelength division multiplexing, monolithic integration

3 terms

silicon photonics technical

"Tower's high-volume 200mm and 300mm Silicon Photonics manufacturing platforms"

Silicon photonics is the technology that uses tiny structures etched into silicon chips to generate, control and detect light for moving data and sensing, essentially putting optical fiber functions onto a computer chip. For investors, it matters because it can dramatically increase data speed and energy efficiency in data centers, telecom networks and advanced sensors, potentially lowering costs and enabling new products much like replacing many metal wires with faster, low-power optical highways.

wavelength division multiplexing technical

"including wavelength division multiplexing and demultiplexing on a single chip"

Wavelength division multiplexing is a fiber-optic technique that sends multiple separate streams of data down a single optical cable by using different colors (wavelengths) of light, like running many lanes of traffic on the same road. It matters to investors because it multiplies network capacity and can lower the cost of adding bandwidth, influencing the revenue and competitiveness of telecom providers and equipment makers as demand for data grows.

monolithic integration technical

"enables monolithic integration of multiple photonic functions"

Combining multiple functions, components, or subsystems into a single, unified physical structure or product rather than keeping them as separate, interchangeable modules. In technology and manufacturing contexts this commonly means putting several electronic, optical, mechanical or software elements onto one chip, board or enclosure so they operate together as a single unit; in corporate contexts it can describe delivering many services or capabilities from one integrated platform. Monolithic integration reduces the need for interconnecting parts and can simplify performance and packaging, but it also makes upgrading, repair, and independent scaling harder and creates a single point of failure or manufacturing yield sensitivity.

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Leveraging Tower's 200mm and 300mm Silicon Photonics platforms, the collaboration supports multiple generations of Near-Packaged Optics development for AI infrastructure

MIGDAL HAEMEK, Israel and SUZHOU, China, November 3, 2026 – Tower Semiconductor (NASDAQ/TASE: TSEM), the leading foundry for high-value analog semiconductor solutions, and Innolight, a leading provider of optical connectivity solutions for data center and AI infrastructure applications, today announced their continued collaboration on emerging Near-Package Optics (NPO) applications. The collaboration combines Innolight's expertise in optical interconnect solutions with Tower's high-volume 200mm and 300mm Silicon Photonics manufacturing platforms to address the increasing performance and bandwidth requirements of next-generation AI infrastructure.

Leveraging Tower's high-volume 200mm and 300mm Silicon Photonics platforms, Innolight has achieved a key milestone in the development of its Near-Package Optics (NPO) portfolio with its first NPO device entering early production using Tower's PH18M Silicon Photonics process flow running in Tower’s US CA factory. In parallel, Innolight has taped-out multiple NPO products on Tower's 300mm Silicon Photonics platform to support future product generations.

As AI workloads continue to scale, NPO architectures are emerging as one of the preferred approaches for next-generation optical interconnects. These emerging architectures are expected to drive additional demand beyond today's pluggable optical module market, driving the new phase of optical interconnect solutions for AI and cloud infrastructure.

"Near-Package Optics is emerging as a key technology for next-generation AI and cloud infrastructure," said Oliver Sun, CTO of Innolight. "Our collaboration with Tower provides us with industry leading capabilities enabling us to accelerate the development of NPO solutions to meet the evolving needs of hyperscale and AI data center customers."

NPO architectures typically require substantially higher optical channel counts than conventional pluggable optical modules, often integrating 16 or more channels on a single device. As channel counts increase, manufacturing expertise, process control, and yield performance become increasingly critical. Tower's leadership in high-volume Silicon Photonics manufacturing and its advanced 200mm and 300mm SiPho platforms provide the process uniformity, high-yield performance, and rich device offerings needed to support these increasingly complex designs. The platform also enables monolithic integration of multiple photonic functions, including wavelength division multiplexing and demultiplexing on a single chip, enabling increased functionality with compact size while optimizing performance and scalability.

“Given their market and product leadership, Innolight continues to be a critical technology partner for Tower’s silicon photonics roadmap as well as cornerstone manufacturing customer now across four of our facilities, two in the US (Newport Beach California and San Antonio Texas) and one each in Israel and Japan,” said Dr. Marco Racanelli, President, Tower Semiconductor. “By combining Innolight's innovation in optical connectivity with Tower's differentiated Silicon Photonics technologies and manufacturing expertise, we continue to advance solutions that address the demands of future optical networks.”

For additional information about Tower Semiconductor’s SiPho platform, visit here.

For additional information about Innolight, please visit here.

About Innolight
InnoLight is a world leader in providing a wide range of high-speed optical solutions for optical communication networking, especially for AI and Data Center applications, with global footprints in California, Singapore, Thailand, and Taiwan and Suzhou China. For more information, please visit www.innolight.com.

About Tower Semiconductor 
Tower Semiconductor Ltd. (NASDAQ/TASE: TSEM) is a leading foundry of high-value analog semiconductor solutions, serving growing markets including industrial, automotive, mobile, infrastructure, medical, and aerospace & defense. The company offers a broad portfolio of advanced and innovative analog technologies, including silicon photonics (SiPho), SiGe, RF CMOS, CMOS image sensors, power management, and mixed-signal, supported by world-class design enablement and process transfer services. Tower operates a global manufacturing network with 200mm and 300mm fabs in Israel, the U.S., Japan, and Italy, providing customers with scalable capacity and multi-fab sourcing. Learn more at: www.towersemi.com.

Safe Harbor Regarding Forward-Looking Statements
This press release includes forward-looking statements, which are subject to risks and uncertainties. Actual results may vary from those projected or implied by such forward-looking statements. A complete discussion of risks and uncertainties that may affect the accuracy of forward-looking statements included in this press release or which may otherwise affect Tower’s business is included under the heading “Risk Factors” in Tower’s most recent filings on Forms 20-F, F-3, F-4 and 6-K, as were filed with the Securities and Exchange Commission (the “SEC”) and the Israel Securities Authority. Tower does not intend to update, and expressly disclaim any obligation to update, the information contained in this release.

      ###
Tower Semiconductor Company Contact: Orit Shahar | +972-74-7377440 | oritsha@towersemi.com
Tower Semiconductor Investor Relations Contact: Liat Avraham | +972-4-6506154 | liatavra@towersemi.com

Attachment

• Innolight_NPO_PR_Final_11032026

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What milestone have Tower Semiconductor and Innolight reached in Near-Package Optics?

Innolight's first Near-Package Optics device is entering early production using Tower's PH18M silicon photonics process at its California factory. Innolight has also completed tape-outs—design submissions for manufacturing—for multiple NPO products on Tower's 300mm platform to support future product generations.