Tower Semiconductor to invest $3 billion in Japan, backed by government grants

Israeli chipmaker Tower Semiconductor said on Tuesday it will invest $3 billion to bolster chip manufacturing in Japan, including $1 billion in grants from the Japanese government.

U.S.-listed shares of the company rose more than 18% in ‌premarket trading ⁠after ⁠the announcement, which is expected to support growing AI and data center demand.

The move aims to help the company’s production of silicon photonics – which uses light to move data faster between AI chips – and silicon-germanium technology, which enables faster ⁠and more ‌energy-efficient semiconductor devices.