Japan will provide up to 159 billion yen ($1 billion) in subsidies to Tower Semiconductor's local unit to ramp up production of advanced optical communication chips, the Ministry of Economy, Trade and Industry announced on Monday.
The Israeli foundry plans to invest roughly 600 billion yen in total across two facilities. The first phase will convert its existing plant in Myoko, Niigata Prefecture, for 300-millimeter silicon photonics manufacturing, with operations targeted for the fourth quarter of 2027. A second plant will be built next to the company's Fab 7 facility in Uozu, Toyama Prefecture, with supply expected in the second half of 2028. The two sites aim to produce 18,000 wafers per month on a 300mm-equivalent basis.
Tower Semiconductor, which holds a leading global market share in optical communication semiconductors, is also planning joint chip development with NTT Group.