Tower Semiconductor Ltd.

Good day, and thank you for standing by. Welcome to the Tower Semiconductor First Quarter 2026 Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star, one, one on your telephone keypad. You will hear an automatic message advising your hand is raised. To withdraw a question, please press star, one, and one again. Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Nuit Levy. Please go ahead.

Thank you. Hi, everyone, and thank you for joining us. Welcome to Tower Semiconductors' first quarter of 2026 Financial Results Conference Call. With us today are Mr. Russell Elwanger, our Chief Executive Officer, and Mr. Oren Shirazi, our Chief Financial Officer. Before we begin, please note that certain statements made during today's call may be forward-looking and are 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 Authorities, all available on our website. Tower assumes no obligation to update any such forward-looking statements. Our first quarter of 2026 results are prepared in accordance with U.S. GAAP. Some data presented may include non-GAAP financial measures as defined under SEC Regulation G. Reconciliation to GAAP figures and full explanations are provided in today's press release and financial tables. For your reference, a supporting slide deck is available on our website and integrated into this webcast. With that, I'd like to turn the call to our CEO, Mr. Russell Ehlinger. Russell?

Thank you, Noe. Hello, everybody. Thank you for joining our call today. The first quarter of 2026 was solid, providing a strong foundation for the high growth we expect this year. We maintained strong financial performance with continued execution of our strategic priorities. Our first quarter 2026 revenue was $414 million, 15% year-over-year growth. First quarter net profit was $65 million, 62% year-over-year growth, yielding 16% net margin, up from 11% in the first quarter of 2025. Looking ahead, we guide the second quarter of 2026 to be the highest revenue in the company's history with a mid-range revenue guidance of $455 million, plus or minus 5%, representing a 22% increase as compared to the second quarter of 2025 and a 10% growth quarter over quarter. We strongly reiterate our target of quarter over quarter revenue and margin growth throughout 2026. We continue to strengthen our alignment and partnerships with our photonics customers through the execution of long-term customer commitments Contractually representing 1.3 billion revenue in 2027 with significantly larger valued contracts for 2028 backed by approximately $290 million in prepayments already received from our largest SIFO customers. This reflects the strength of our offerings and our customer partners' confidence in our ability to meet the continued growing demands of next generation AI data center architectures. Importantly, these reservations do not represent the entire express demand of these customers, nor the extent of our planned shipment to these customers, and do not include additional wafer shipments to our broader base of more than 50 active SIFO customers serving various and market applications. These commitments, together with our continued technology leadership and strategic expansion of 300 millimeter and global manufacturing capacity provide us with enhanced revenue visibility and confidence in sustained profitable growth. Our recently announced restructuring deal in Japan in TPSCO marks the significant milestone in advancing our long-term 300 millimeter strategy. By transitioning to full ownership of the 300 millimeter factory, Fab 7 in Ozu, We are creating a more focused and scalable platform to support growing customer demand, particularly in our differentiated optical photonics technologies. Full ownership allows us to expand and build upon a facility that is running multiple fully qualified high-volume application flows, and importantly, at present volumes, is already profitable. The 300-millimeter expansion, tied to the approval of many grants, is designed to be strategic, operational, and capital efficient. With access to adjacent land, we expect to further build out and scale up to four times current levels, generating a meaningful long-term growth engine anchored in high-value technologies. This approach leverages existing customer qualifications with increasing demand, allowing incremental capacity to translate into revenue and cash flow almost immediately as new tools are installed. This positions our 300-millimeter platforms not only as a key driver of future growth, but also as a structurally stronger contributor to profitability, reinforcing our overall financial model and long-term value creation. Additionally, we are vented into a long-term supply agreement with Nuvoton for Fab 5 Tanami. This will ensure manufacturing continuity for our 200-millimeter customers under terms that are mutually beneficial. Moving specifically to first quarter of 2026 performance, this year has begun in a very strong fashion. Led by Silicon Photonics, with a revenue growth of 3x year-over-year, all major technology offerings demonstrated year-over-year growth with imagers up 9%, RFSOI up 12%, power management up 10%, and silicon germanium of 24% year over year. Please see slide four as reference for Q1 revenue breakdown by technology. Focusing on RF infrastructure, last quarter was truly amazing, both in our team's execution of aggressive capacity expansion, as well as in demonstrating new breakthrough technology milestones. First, we continued a strong wrap of 200 gigabit per second products for multiple customers while continuing to support strong demand in older products by taking full advantage of new capacity coming online. We are in the midst of a SIFO production ramp in each of FAB 2, Migdal Hemek, FAB 3, Newport Beach, FAB 9, San Antonio, and FAB 7, Wuzhou, Japan, 300 millimeter. Among this, we successfully achieved in Q1 First flow SIFO revenue shipments from both Fab 2 and Fab 7, the latter having achieved impressive 95% yield for the first SIFO wafers leaving the factory. Our expansion remains on track to grow SIFO capacity five times from the base of our Q4-25 wafer revenue shipments by the end of this year, 2026. In 2027, we anticipate our focus will turn primarily to additional 300-millimeter capacity expansion in the WOZO factory, supported by the expected full factory ownership. Next, we achieved a number of next-generation technology breakthroughs, working with several of our key customers. This quarter, we announced the demonstration of an all-silicon, 400-gigabit-per-lane mock sender modulator, with our strong partner and optical industry leader, Coherent. Coherent being one of our customers having signed a high-volume long-term contract. With OpenLight, we recently announced a heterogeneously integrated 400 gigabit per lane indium phosphide electro-absorption modulator on our silicon PH18DA platform. In addition, we made strong strides towards bringing syncylmethium niobate to high-volume manufacturing and announced our partnerships with Lightwave Logic and NLM Photonics to bring organic polymers to high-volume production for next-generation compact modulators. Just prior to the Optical Fiber Conference, we announced our partnerships with Salience Labs and Oriole Networks to manufacture advanced silicon photonics-based optical circuit switches, both using our PH18DA platform with heterogeneous integrated indium phosphide optical amplifiers to achieve high bandwidth and ultra-low latency optical switch solutions for AI data center scaling. Last, but certainly not least, our partner, Sintel Photonics, announced availability of the world's first heterogeneous integrated dense wavelength division multiplier, DWDM laser sources, designed for near package optics and CPO-based AI infrastructures. Most market analysts forecast that pluggable optical transceivers will remain the dominant format through the end of this decade. We do see extra-dense pluggable optics, XPO, being led by Arista with the aim to extend the served generations of pluggables and highlighted by Andy Beckelsheim in his Optical Fiber Conference Executive Forum panel presentation. and near-package optics, eventually also co-package optics, emerging and coexisting with pluggables for the next several years, and are thus preparing to ramp these technologies as well. At this year's OFC, Tower Silicon Photonics was on display in leading XPO and near-package optics demonstrations. We are already seeing strong demand for MPO products in 2027. Given this strong customer traction, It's our expectation that tower SIFO will continue to lead in these new optical form factors. NPO is likely to ramp over the next several years and precede a significant ramp in CPO for our primary customers. However, we are investing heavily in several CPO technologies, namely in-house 200 millimeter and 300 millimeter hybrid bonding with through silicon vias to seamlessly attach SIFO to electrical ICs, laser sources, for both more traditional as well as DWDM architectures for use in CPO implementations and reduced-size high-performance modulators for use in space-challenged CPO form factors. In addition to SIFO, our silicon-germanium platform is experiencing unprecedented demand for use in drivers and transimpedance amplifiers for optical transceivers and also for active copper cables that can be an attractive alternative to optical for short-distance scale-up architecture. Additionally, our RF silicon germanium technology is in the midst of a strong ramp for LNAs in a Tier 1 mobile platform. In silicon germanium, we recently announced our partnership to produce high-power US-made silicon germanium beamforming ICs designed for defense radar and satellite communication applications. Fabricated at our US sites, These chips aim to secure domestic supply chains, offering superior performance for critical next generation defense systems. As our sites turn to space, whether for data centers or for global satellite connectivity, we see our Solar Gemane platform being well suited to support these growing applications. Looking at RF mobile, we continue to move our RF-SOI 200 millimeter technologies to 300 millimeter. to take advantage of finer line and other enhanced capabilities offered at 300 millimeter, whilst repurposing this 200 millimeter capacity for higher margin SIFO and SIGE capabilities. Substantial improvements of R on C off relative to competitors and reduced layer count is creating a strong design wind momentum that positions our 300 millimeter RFSI platform for sustained growth over the next multiple years. In power management, we have seen near-to-year revenue growth in both our 200 millimeter and 300 millimeter BCD offerings. In the last quarter, we announced the release of our latest power platform, Gen3, achieving on-resistance below 1.5 milliohm millimeter squared for key devices with operating voltages above 10 volts. Such low on-resistance enable high power conversion efficiency in a variety of applications and places our offering at a very competitive position relative to other foundry offerings. Using our technology, our lead customers have demonstrated a 15% reduction in power conversion losses, quite significant as compared to the highest efficiency alternatives. Some of the end markets where we have seen revenue growth have included consumer mobile and automotive. In addition, as the AI data center power delivery market transitions to 800 volts DC bus at the rack level, we see a significant growth opportunity ahead in smart power stages and point-of-load converters designed with our BCD offerings. Lastly, in consideration of the value we are offering, our 200-millimeter BCD pricing has increased by 13%. Image sensors. The fastest-going CAS segments are automotive, industrial, machine vision, and high-end video cameras. Growth in each of these areas is concentrated in the high-end portion, where high-resolution, high-dynamic range with sensitivity to low light and global shutter technology are required. Tower's global shutter technology, combined with its wafer-to-wafer hybrid bonding, provides best-in-class performance in terms of low noise and high sensitivity and allows high resolution. Additionally, we are developing an ultra-high density in-pixel capacitor to provide best-in-class dynamic range, especially for the automotive market. We won a second high-performance automotive product this past quarter. Significantly, we are fully qualified with the next generation high-end video sensor with a leading high-end photography camera maker awaiting their product launch. Turning to utilization, for the first quarter, utilization rates were FAB2 at around 60% utilization as SIFO and SIGI qualifications continue. FAB3 operated at 80% utilization. Utilization was slightly constrained due to adding newer SIFO and SIGI processes. We expect utilization and output to increase back in the second quarter. PHAB 5 was at 75% utilization. PHAB 7 continues to be fully utilized, well above our 85% utilization model. PHAB 9 utilization was at 80%. With that, I'd now like to turn the call over to our CFO, Mr. Oren Shirazi. Oren, please.