Tower Semiconductor Ltd.

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to today's Tower Semiconductor Second Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode. Then will be a presentation followed by the question and answer session, at which time, if you wish to ask a question, you will need to press star 1 1 on your telephone keypad and wait for your name to be announced. I must advise you that this conference has been recorded today. I would now like to hand the conference over to our speaker today, Ms. Noet Levy, Senior Vice President of Investor Relations and Human Resources. Please go ahead, Madam.

Thank you, and welcome to Towers' second quarter 2025 Financial Results Conference call. Before we begin, please note that certain statements made today may be forward-looking and subject to risks and uncertainties that could cause actual results to defer materially. These risks are detailed in our SEC filings, Form 20F and 6K, as well as filings with the Israeli Securities Authority, all available on our website. Tower assumes no obligation to update forward-looking statements. Our second quarter 2025 results are prepared in accordance with U.S. GAAP. Some data presented may include non-GAAP financial measures as defined under SEC Regulation G. Reconciliations to gap figures and full explanations are provided in today's press release and financial tables. Please note that we have a supporting slide deck that is available on our website and integrated into this webcast. With that, I'd like to turn the call over to our CEO, Mr. Russell Elwanger. Russell?

Thank you, Noit. Thank you all for joining us today for our second quarter 2025 earnings call. We delivered strong results in the second quarter with revenues of $372 million and a result in net profit of $46.6 million. We got our third quarter revenues to be $395 million plus minus 5% and additionally target a $40 million plus revenue increase for the fourth quarter over the third. Q3 guidance and Q4 expectations validate our onset 2025 target of sequential quarter-over-quarter growth throughout the year with acceleration in the second half. We announced at year's begin a repurposing of multiple factories predominantly towards higher capacity for RF infrastructure, namely silicon germanium and silicon photonics. This is well underway with Q3 and Q4 expected growth being the first fruits of the execution of this strategy. Demand not only remains very strong, but is consistently growing, as is our increase in both silicon, germanium, and SIFO capacity and associated customer qualifications. We continue to invest in capacity and also R&D advanced capability CapEx throughout 2025, with further capacity and capability growth planned for 2026. aligned to our customers' forecasted demands, confident in maintaining our number one market share position in this growing and significant optical transceiver market. Let's review our second quarter 2025 revenue breakdown along with some context that highlights key trends and momentum shaping our performance for the full year. Kindly refer to slide number four for a detailed breakdown of our quarterly revenue figures. Most notable is growth in our RF infrastructure business, attributed to data center and AI expansions, served by our silicon photonics and silicon germanium technologies, predominantly for optical fiber communications. In the second quarter, RF infrastructure represented 25% of corporate revenues, over 90 million in revenues, up from 14% in the same period of 2024, and expected to significantly increase over the next period. Specific to silicon germanium, we began volume production shipments from San Antonio Fab 9 for a Tier 1 customer, and as well, volume wafer starts in Israel Fab 2 for another Tier 1 customer, providing substantial capacity increase in this growing market on top of the high capacity in our Newport Beach facility, which itself is realizing capacity increases this year. We have also made silicon germanium design kits available in our 300 millimeter Japan factory, Fab 7, for which an additional Tier 1 customer is presently in the design phase. For silicon photonics, in addition to our existing volume on 400 and 800 gigabit per second, current wafer starts now include a good ramp on 1.6 terabit per second as the industry continues to move aggressively to higher speeds, which is expected to further help market penetration of silicon photonics over legacy EML solutions, expanding our opportunity due to the cost and strong performance benefits of silicon photonics. In the first half of 2025, we've moved five times more SIFO products from pre-production to production phase than in the same period in 2024. already exceeding last year's total. This growth demonstrates our platform maturity, strong customer adoption, and efficient operational scalability. Today, most silicon photonics products we manufacture serve the transmit function in an optical transceiver module. This quarter, we successfully prototyped a new 300 millimeter silicon photonics technology that enables cost and performance advantage to the receive function in an optical transceiver module. This new technology is expected to see initial production in the fourth quarter of this year, expanding the market served by our silicon photonics technology beyond that which we serve today. By leveraging the majority of features in our mature SIFO platform and adding evolutionary customer-partnered improvements to this base process, we've been able to quickly ramp up and achieve high yields for 200 gigabit per second lanes 1.6 terabit per second optical transceiver products. The transition of 400 gigabit per second lanes, 3.2 terabit per second, requires additional and fundamental device, process improvements, and new materials, which Tower is aggressively pursuing together with Tier 1 customers. The first of these platforms is anticipated to ramp as early as mid-2026. Slide 5 shows cumulative wafer build to date for 400G, 800G, and 1.6T speed. Presently, we are manufacturing similar amounts of each offering. Looking at prototypes, there's further acceleration of 1.6T with 40% higher year-to-date protos at 1.6T above 400G and 800G combined, and this serving multiple large customers. We're seeing recovery in our RF mobile business, specifically in RF SOI, which showed a Q2 to Q1 revenue increase of over 20%, and is expected to show further increases, close to 30%, Q3 over Q2, and targeting further increase in Q4. We've gained momentum with a new North America Tier 1 customer, now prototyping several products on RF SOI in our 300 millimeter facilities in both Japan and Italy. Beyond RFSOI, we're innovating with other RF switch technologies. This quarter, we won the IMS Best Paper Award with PSEMI, a Murata fully owned company, for our PCM, phase change material switch technology, achieving a 15 femtosecond R-on-C-off figure of merit, being a Forex improvement versus state-of-the-art RFSOI. These switches are being prototyped for both low and high frequency millimeter wave applications. And importantly, this quarter received a Best Supplier Award from Weisval, a major Korean RF front end module provider. Looking at power management, the computational complexity of AI processors is increasing, leading to a corresponding rise in power requirements. To meet this need, as shown on slide six, We provide a variety of power management solutions with switch devices that have ultra low resistance, advanced digital logic integration, and manufacturing options in our 300 millimeter lines in the US and Japan. Lead customers are now designing to our high efficiency power delivery solutions for this rapidly growing market. We deliver best in class power transistor performance and continue to advance this offering, having released device optimization for higher switching frequencies this past quarter. For sensors and displays, we expect a revenue increase of about 20% in the second half of 2025 against the previous quarter's and previous year's run rate, primarily due to increases in the machine vision market. We have also begun substantial new activities with several customers, including a leading automotive imager provider and an OLED on silicon supplier the latter of which has prototypes already in test. These new activities are expected to fuel additional future growth. Looking at utilization, in the second quarter, Fab 2 in Israel and Fab 9 in Texas both operated about 60% utilization while repurposing tools to now load high levels of silicon germanium and to begin the manufacture of silicon photonics. Fab 3 is fully utilized at our 85% utilization model. Fab 5 was at 75% with rising demand for high voltage power management. And Fab 7, 300 millimeter, was fully utilized, well exceeding the 85% model. In summary, our business continues to advance with significant progress across key platforms. We are well positioned for continued growth and success in our target markets. We are successfully executing to a clear strategy that is translating into tangible financial results with expanding customer engagements and measurable operational progress. We are committed to delivering sustainable and long-term value to our stakeholders. With that, I'd like to turn the call to our CFO, Oren Shirazi. Oren, please.