Tower Semiconductor (TSEM.TA) posted a higher-than-expected increase in quarterly earnings on Thursday, just days after Intel Corp announced its intention to acquire the Israeli chipmaker.
In the fourth quarter, the firm, which was previously known as TowerJazz, reported diluted earnings per share of 55 cents, up from 34 cents a year earlier. Revenue increased 19% to $412 million, with organic growth of 28%.
Chipmakers are seeing a boost in demand as economies recover faster than expected from the pandemic, with certain industries reporting shortages, such as auto manufacturing.
According to Refinitiv’s I/B/E/S statistics, Tower was expected to earn 46 cents per share on $425 million in revenue.
Tower earned an adjusted $1.37 per diluted share in 2021, compared to 76 cents in 2020. Revenue increased by 19% to $1.51 billion. Analysts expected $1.53 EPS ex-one-offs on $1.51 billion in revenue.
Tower, which specializes in analog chips used in vehicles, medical sensors, and power management, has announced that it will increase capacity for 200 and 300 mm chips at its manufacturing centers in Israel, Texas, and Japan.
Intel announced on Tuesday that it would purchase Tower for $53 per share, or $5.4 billion, in order to gain access to more specialized production as it prepares to capitalize on rising semiconductor demand.
The tower usually publishes a quarterly outlook, but it has decided not to do so due to the pending transaction, which is scheduled to close in approximately a year.
Since Intel’s disclosure, Tower’s stock has increased by more than 40%.
