Tower Semiconductor has reported its revenue for the third quarter ended September 30, 2023.
The semiconductor company revealed a total revenue of $358 million, showing a slight increase from $357 million in the second quarter of the same year. However, a notable decline is evident when compared to the third quarter of 2022, where Tower Semiconductor reported a revenue of $427 million.
A significant development for Tower Semiconductor is its new capacity corridor agreement with Intel. This agreement allows Tower Semiconductor to access additional high-volume 12-inch capacity, potentially boosting its production capabilities and market presence.
Tower Semiconductor posted a net profit of $342 million for the third quarter of 2023, which includes a substantial amount of $290 million derived from the merger contract termination fee received from Intel.
Tower Semiconductor and Intel have mutually decided to terminate the merger agreement initially entered into in February 2022. The merger termination fee, amounting to $314 million, was paid by Intel to Tower during the third quarter of 2023. This fee is presented in a separate line in the statement of operations for Q3 2023, net of associated costs. The impact of this termination fee on the net profit for the third quarter is $290 million, net of taxes.
Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, commented on these developments, stating, “This past period has been most significant, putting in place added capacity capable of driving substantial revenue growth at accretive margins across the board.”
As part of the changes in their business trajectory, Tower Semiconductor has announced the termination of the merger agreement with Intel. The termination fee received from Intel plays a crucial role in the company’s financial performance for the third quarter.
Looking ahead, Tower Semiconductor has provided guidance for the fourth quarter of 2023, anticipating revenue to be $350 million, with a potential upward or downward range of 5 percent. The company continues to navigate the semiconductor landscape, aiming for sustained growth and profitability.