By Lisa Thompson
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Tower (NASDAQ:TSEM) continued year-over-year revenue growth in Q4 2024 and expects that to continue sequentially and year-over-year throughout 2025. The growth will be back-half weighted as capacity comes online in Italy, Texas, and Japan. For the 2024 year, revenues and earnings were basically flat with 2023 once the one-time gain for the Intel merger is taken out of 2023. The company expects much better results in 2025 as RF infrastructure continues to grow rapidly and should offset the decline in RF Mobile. Management said SiPho was $105 million in 2024, (triple what it was in 2023), and it confirmed in the Q4 call that it did leave the year at a $150 million run rate. It expects that revenue for that product line could double in 2025. RF Mobile is being hit by weakness in China for Android phones, which is causing customers to slow production and work off inventory. The company expects this business to be down by a high teens percentage in 2025.
Q1 is Tower’s seasonally weakest quarter, and the company guided to revenues of $358 million plus or minus 5%, which would result in continued year over year growth but down sequentially as is typical. As of last night’s closing price, the company trades at an enterprise value of $4.5 billion, or 2.9 times EV to estimated sales for 2025, versus its peers, who trade at 5.0 times.
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