Thank you. Hi, everyone, and thank you for joining us. Welcome to Tower Semiconductor's 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 differ 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. GAP. Some data presented may include non-GAP financial measures as defined under SEC Regulation G, Reconciliation to gap 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 Ehringer.

Thank you, Nauit.

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've 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 TPS go 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 Uzu 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 MediGrants, 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-millionaire platforms not only as 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 new Vuitton for fab 5 to Nami 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 of nine percent rfsoi up twelve percent power management up 10% and silicon germanium up 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 FAB2 Migdal Hemic, FAB3 Newport Beach, FAB9 San Antonio, and FAB7 Wuzo 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 percent 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 electroabsorption modulator on our silicon PH18DA platform. In addition, we made strong strides towards bringing thin-fil-muthium 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 Cintel Photonics announced availability of the world's first heterogeneous integrated dense wavelengths 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 serve generations of pluggables, and highlighted by Andy Becklesheim 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 wrap 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 NPO 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 200mm and 300mm 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 transimpedes 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 u.s. made silicon germanium beamforming ICs designed for defense radar and satellite communication applications fabricated at our u.s. sites these ships 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 solution a 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 final line and other enhanced capabilities offered at 300 millimeter whilst repurposing this 200 millimeter capacity for higher margin sifo and side G capabilities substantial improvements of R on C off relative to competitors and reduced layer count is creating a strong design with momentum that positions our 300 millimeter RFSI platform for sustained growth over the next multiple years power management we have seen year-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 gen 3 achieving on resistance below 1.5 million millimeter squared for key devices with operating voltages above 10 volts switch 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 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 percent image sensors the fastest-growing CS segments are automotive industrial machine vision and high-end video cameras growth in each of these areas is concentrated in the high-end portion for high resolution high dynamic range with sensitivity to low light and global shutter technology are required with 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're 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 fab 2 at around 60% utilization at SIFO and SIGI qualifications continue fab 3 operated 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. Fab 5 was at 75% utilization. Fab 7 continues to be fully utilized, well above our 85% utilization model. Fab 9 utilization was at 80%. With that, I'd now like to turn the call over to our CFO, Mr. Oren Shirazi. Oren, please.

Earlier today, we released our financial results for the first quarter of 2026. I will now review the highlights of these results, as well as the balance sheet and capex investment looking into the pndl revenue for the first quarter of 2026 was 414 million dollar representing 15 percent year overall growth compared to 358 million dollars in the first quarter of 2025 gross profit for the first quarter of 2026 was 111 million dollar an increase of 52 percent compared to the first quarter of 2025 and operating profit was 65 $6.5 million, 96% higher year-over-year. Income tax expense line of $6.5 million in the P&L reflects an all-in 9% effective tax rate, which is better compared to our model, per which we estimate all-in tax rates to be above 15% following Pillar 2 regulations. The reason for it is the inclusion of a non-recurring income tax benefit recorded for the first quarter of 2026 in relation to tpsco our japanese affiliate net profit for the first quarter of 2026 was 65 million dollars an increase of 62 percent or 25 million dollars compared to net profit of 40 million dollar in the first quarter of 2025 reflecting 16 net margins compared to 11 net margins for the first quarter of 2025. earnings per share for the first quarter of 2026 were 58 basic and 57 cents dilute, which is 61% and 63% higher year-over-year, respectively. As we announced, we received $290 million of CIFO customer prepayments towards 2027 capacity reservation. These customer prepayments are included in the balance sheet as of the end of March 2026 as short- and long-term customer advances and are included in the cash flow reports for Q126 of cash from operating activities. Continuing on the balance sheet, our balance sheet continues to be strong, evidenced by the following indicators and financial ratios. As of the end of March 2026, our assets totaled $3.7 billion, primarily comprised of $1.5 billion in fixed assets net, predominantly comprised of Fed machinery, And $2 billion of current assets ratio is very strong at about 5.6x, while shareholders' equity reached a record of $3 billion at the end of March 2026. Additional evidence of the strong balance sheet and financial position is the Standard and Poor's Maalot, an S&P global rating fully owned company, which on May 5, 2026, completed its annual rating review for the company, reaffirming its ILAA rating and raising its outlook for the company from a stable outlook to a positive outlook. I would like now to describe our hedging activities. In relation to the Japanese yen, since the majority of TPSCOs revenue is denominated in yen and the vast majority of TPSCOs costs are in yen, we have a natural hedge over most of our Japanese business and operations. To mitigate part of the remaining yen exposure, we are executing zero-cost cylinder transactions to hedge currency fluctuations. While the yen rate against the U.S. dollar may fluctuate, there is limited impact on our margins. In relation to the Israeli shekel currency, while we have no revenue in this currency, since a portion of our cost in Israel is denominated in shekel, a portion of such currency risk by engaging zero-cost cylinder transactions to mitigate this exposure. The currency rate against the U.S. dollar may fluctuate, there is a limited impact on our margins, as indeed we have experienced over the past few quarters in which period the Israeli currency appreciated strongly compared to the U.S. dollar. Moving into the CAPEX investment plan, as we announced in recent quarters, in order to support the increasing CIFO and CIGI demand, we are executing a $920 million investment plan in capacity and capability of CIGI and CIFO in our 8-inch FEBs in Israel, Newport Beach, Texas, and also in our 12-inch UZO FEBs in Japan. This investment is on track in terms of purchase orders issued, technology and process qualification. Approximately 40% of the above-mentioned $920 million CAPEX has already been paid and is included in our cash flow for investing activities for past reported periods. while the remaining 60% are expected to be paid throughout 2026 and 2027. All these CAPEX current and future investments are fully reflected in the model we presented in February 2026. Under this model, we target $2.8 billion in annual revenue, $1.12 billion in annual gross profits, $900 million in annual operating profits, and $750 million in annual net profits. That concludes my prepared remarks. Now I'd like to turn the call back to the operator so we can take your questions.

Thank you, dear participants. As a reminder, if you wish to ask a question, please press star 1-1 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by welcome to the Q&A, Roster. This will take a few moments. And now we're going to take our first question, and it comes to line of Mehdi Hosseini from Susqueha Hanna Financial Group. Your line is open. Please ask a question.

Yes, thanks for taking my question. A couple for me. Russell, if you just think about the big picture and the longer term trends, is there any way you can help us understand how opportunities for tower as it relates to silicon photonic and silicon germanium changes as we migrate from pluggable transceiver to optical? In other words, how does your content change as you make this transition from a traditional plug-in transceiver to optical optical?

As stated, as we go forward, as far as content itself, I mean, certainly you'll still need lasers. We're driving integrated lasers. We're driving different material modulators, higher speeds. and as well driving, as I had mentioned, through Silicon VIA to be able to do some 3D packaging and tie the silicon photonics to the electrical ICs. As far as XPO, there's just many more channels that are being done, and as far as MPO, again, many more channels being done, so greater modulation.

I ask the question because the way we in the investment community see the optical transceiver manufacturing evolving, there are several different solutions by different foundries, and I was just trying to understand if Tower has become a leading foundry, a partner for transceiver manufacturing for pluggable, how does that change as we move into optical where there are alternative technologies?

As stated, we expect what we have with pluggables will transfer nicely into NPO and will extend as well into CPO, which will be several years down the road. If you look at the SIFO ports itself, it's very interesting. from 2025 the amount of sifo ports and this is according to report by light counting the amount of sifo ports was 30 million driving to 2028 sifo ports to 137 million at the same time the total ports goes from 90 million to 205 so this is you know a function of the data center build up build out etc but the amount of ports becomes much much greater pluggables are not going away at all pluggables will stay extremely strong at least through the 2030 as stated in the script we expect that the first things to come on at a higher rate is the near package optics multiple design wins presently and stated that we have a reasonable volume that will be shipping in 2026 2027 and we have as well I think a very very strong position in the XPO that was highlighted by Andy at the OSC as I mentioned having had two strong demonstrators at OFC using our SIFO. So if you just look again, the growth of SIFO ports is 4.5x from 25 to 28, and that entire amount of port growth added from 28 to 2030. So a lot of room for tremendous amount of SIFO growth. I believe by far the leader in pluggables. I don't see any reason that that should change. And in the short term, the XPO and the MPO form factors should transition nicely with tower maintaining leadership.

Great. Thanks for the details. And just a quick follow-up. I understand investment communities focused on silicon photonics, and thank you for identifying revenue opportunities, especially what you have contracted for 27 is there any way to think about the ratio between syphil and silicon germanium because silicon germanium is also using transceiver see if you have extended visibility on the syphil would that gives you a visibility on the segi and is there a ratio that we could use to understand opportunities that you have focusing on CIGI?

Yeah, you're correct. It's very much hand-in-hand. So as the ports increase and the movement to SIFO increases, that obviously the SIFO grows. The ports increase as well. The need for TIAs and drivers increases pretty much at the same ratio. The difference between the two comes into the advancement of the SIFO technology and the fact that although they both demand very good margins, SIFO is demanding a higher margin than the SIGI. So the SIGI revenue growth is lower than the SIFO revenue growth, but as far as the amount of units, they pretty much go hand in hand.

Got it. I'll go back into the queue.

Thank you. Now we're going to take our next question. And the question comes line of Cody Akri from Benchmark. Your line is open. Please ask your question.

Yeah, thanks, guys. Hey, guys. Thanks for taking my questions. And congrats on just a stellar quarter in guidance. Russell, maybe I could just get a quick clarification on the 1.3 billion commitment, excuse me. is that for wafers to be delivered in fiscal 27 or is that wafer started that then would extend delivery to 28 just trying to get my model correct wafers delivered in 27 and the what I stated about a higher volume or 28 is wafers delivered in 28 but again and I I think it's very important to note, although I did say it in the script, the $1.3 billion is a contractual commitment.

It is not, even with those customers that we have that contractual commitment from and with, it is not their full volume demand. So the $1.3 billion, if you look at it, what were we in 2025 I think somewhere about I'm 230 million dollars so it's a two-year from a 230 to 1.3 billion but that 1.3 is not what we're forecasting for SIFO in 2027 well I guess forecasting substantially higher but done but yes well to answer your question directly that is for wafer shipments I guess that then just begs the next question with that level of visibility what degree of visibility would you have to have to feel comfortable increasing your recently increased long-term model very good question Cody when you say long-term model it was a 2028 model which in my mind is somewhat of a midterm model but But I talked about our focus for 2027 will be increasing 300-millimeter SIFO capacity, you know, the strategic focus. And hand-in-hand comes the SIGI capacity as well, a 300-millimeter. But that is not included in any model right now.

So the visibility, I think, will be fairly short-term. the timing of updating a model to a higher numbers I would believe will be within the next quarters well that's excellent Russell thank you for that clarification and the correction learning long-term versus midterm thank you and then one last question if I make what is your view on integration of Indian phosphide lasers I know there's been a lot of industry concern about the the reliability of the integrated laser as we move towards CPO you know versus

an externally sourced laser alternative I know that that's a strength of yours can you maybe just talk about the reliability steps that you've been able to make we see no reason that the integrated laser is any less reliable nor any more reliable than a discrete laser as far as reliability the the major thing that we're focused on is just the integration, a strong integration of the laser into the silicon photonics IC, and hence that there is no potential downside of integrating the two, and I think that is pretty seamless at this moment. The activities there was with open light and the open light platform, and it's going very well. So I would say that from our standpoint, we're very bullish about the integrated laser and additionally about an indium phosphide integrated modulator for 400 gig. But our platforms can allow both, right? if whatever customer wants a form factor with external lasers great if they want to go with us on the integrated laser equally great that as far as their direction that they wish to go we're somewhat agnostic other than the fact that we're really pushing very strong on 400 G modulation and if you look at advanced modulators, the indium phosphide has tremendous advantages on form factors.

And, Russell, if I may, since you brought it up, I guess I'll just sneak one last one in here. With the modulation schemes that you mentioned in the subsequent press release to your earnings release, you mentioned a wide variety of modulation technologies that you're pursuing. would you handicap or prioritize any one of those over the other as being a better fit for tower in the intermediate to long term no I think we're equally competent at all it's you know the thin film lithium niobate has multiple different ways to architect it you can do a I'm not saying it's

simple, but you can do a separate lithium niobate modulator that's its own wafer and have that side by side to the PIC or you integrate it as a chiplet onto the PIC. We're pursuing both form factors there with different customers. As far as the indium phosphide, obviously that's an integrated onto the PIC, but we're somewhat agnostic as to which one a customer would use as you get to many channels the indium phosphide really has a benefit on form factor all right great things thank you Cody very good questions appreciate it thank you and now we're going to take our next question and the question comes line of Richard Shannon from Craig Harlem Capital Group your line is open please

ask a question hey Richard Russell hi how are you very good thank you excellent apologies the ambient noise here and just about graded aboard a plane here so this too loud my I'll try to call in later but I guess I just have two basic questions here the first one was regarding your your capacity expansion in Japan kind of a two-parter here the first part here is how do we think about the potential revenue capacity scale for silicon tonics as you get at least the first parts of the tranche, the tranches I'm sure you're building there. And then do you have any worries about being short of capacity in silicon tonics before that Japan capacity expansion is started?

Excellent question. Looking and hoping and believing that we'll in the very short term receive the METI approval. and we've already obviously begun with contractors to get planning done to get everything done once we have the many approval we'll most likely put in for the permits but that is probably a year and a half type of the time frame between breaking ground and having a facility that can be accepting tools and starting wrapping the tools so where does that put us that puts us in best case in the first half of 2028 for that capacity and then when you say worries I mean I worry is an interesting question worries are also excitement depending on how you turn it around the excitement right now is increasing within existing footprints our capability with silicon photonics in fab 7 which is the existing factory and we have a little spending for that for the first phase of it which we've not publicly announced I don't want to get into the numbers at this point we probably will within two three quarters in line with what Cody asked about updating a financial model but and then we have that ability to go further before the shell is completed by taking advantage of an existing factory within the TPS co-complex it was one that we announced a couple of years ago that we had shut down and that was the array factory which is under the ownership of Newton wind bond but a certain amount of tools and a very specific set of tools within that factory to grow capacity relatively quickly within existing footprint if you will not to miss out on any upside or not to be able or plan is certainly to meet customers demand within 27 while developing developing meaning building the shell that is substantially big so there would be an interim step the beauty of the interim step is that any of the tools that we buy is applicable to the entire build even things that we would put initially into another factory which over time come back into the existing geography that meeting or not the existing but the existing and built-out geography hopefully that was not too obtuse of an answer I I can put a lot of playing parts on it but did that make sense, Richard?

It does. I'll revisit your comments and look at it more closely, but that was very detailed and helpful. My second question, and I'm going to go on mute after this one and listen to your responses, on your announcement on the 400 gig per lane silicon modulator for silicon photonics, you announced it in coherence. Two-part questions. First of all, can you use this technology or something similar with other customers?

And then as you look across the 400 gig per lane generation how much is how much your business will be silicon versus TFLN versus Indian phosphide versus any other modulator technology thank you on the the first question I'm certainly the 400 G modulator that we had press release with coherent was off of a coherent design what we know and our know-how and our IP is available for any customer this specific modulator performance was because of coherence design tied to our platform so if that makes sense it's it's not something that we can give to anyone else it's coherence IP but coherent and having designed it to our platform other customers that would have or potentially could get the same capability as coherent would be able to design something on our platform as it stood it was coherent that did it and coherent that had the design capability to do so that's number one number two I think you're asking me for what I think would be the the first technologies to be utilized my personal view and it's this This is my view, and I'm certainly not a market analyst. I think the lithium iobate will come in fairly strong for one generation. I don't think it will last for many generations. I think it will go to an indium phosphate.

Thank you. Now we're going to take our next question, and it comes line of Lisa Thompson from Zacks Investment Research. Your line is open. Please ask your question.

I was wondering if you could talk a little bit about gross margins. it seems surprising how much they increased in the first quarter given revenues were sequentially down can you talk a little bit about how the margins went up was it more product product mix higher prices how did that turn out yeah basically it's consistent with our model that we published last quarter in our model you'll see that we assume incremental revenue coming at 59% to the gross profit over a baseline, which was 20% a year.

Last year, as you see in this report, Q125 gross profit was 20%, and in our model, we assumed the incremental would come at 59%, and the fully built-out model will reach to 39%.

This quarter, we already achieved 27%, so like you said, it's very nice that we already are up from the 20 to 27 and progression that we expect towards the 39 when we achieve the 2.8 so it's really just selling more newer higher margin products yes yes and then I'm just going back to the technology is there anything that you're concerned about like as opposed to your capacity maybe being able to get parts or be constrained I know Indian phosphate is hard to get and is constrained is that going to change anything or do customers

just switch to something else um you are correct that indium phosphide right now is constrained in our case not necessarily the end laser product is the constraint the starting material is the constraint but no I think we have good plans and good supply chain activities so that whatever constraint issues there might be we're working through and I as these products ramp which they should be ramping on the indium phosphide integrated laser it should be ramping this year I believe that will be in good position to meet

the demands okay thank you those are my questions thank you now we're going to our next question and the question comes line of krish sankar from td cohen your line is open please ask a question hi thanks for taking my question i have two of them russell one is i'm just kind of curious where you think your silicon photonics market share is today and where do you think it will be the next couple of years given your uh longer term contracts and contracts from your customers i'm asking a lot of the fact that you know global foundry is ramping scale and TSM is ramping the coup platforms. I'm just curious where you think your market share could head from today through the next two years. I'm going to add a follow-up.

That's a very, very interesting question. There's other people that claim very high market shares. I don't see how it's possible at all. I'm not going to give a percentage market share present, but I think that we're certainly the leading market share and by far the leading market share in silicon photonics presently, and I see no reason why that should change.

Got it, Russell. And then just to follow up on the technology and advanced packaging, clearly you do have experience with hybrid bonding on CMOS emit sensors. When do you think that ports over to the silicon photonics side, and is that a real advantage in the short term, or is it something more of a longer-term story?

I think it's a very strong advantage, mid-to-long term, but not so important for this year.

Got it. Thanks, Russell.

Thank you. good question thank you now we're going to take our next question and the question comes land of Matthew Hosseini from Susquehanna financial group your line is open please ask a question yes thank you there's a couple of follow-up RF mobile was down almost 36 percent Q over Q obviously it sets up a low base and I expect growth for the remaining of the year but how should I think about the RF mobile in 2026 versus 25 and I have a follow-up yeah I just know that

indeed Q4 25 was an exceptional growth in SOI compared to previous quarters so key you know there's not reduce specific ramp in Q4 25 okay um as stated we're moving away from our 200 millimeter RF SOI and customers as well and transitioning to newer 300 millimeter design winds the design wind cycle is extremely strong and if we look at the multi-year forecast I see the RF SOI increasing as a total on the 200 posts 300 but the 200 is almost gone in the very short term not everything has transitioned to 300 yet so you are correct it was down and you know if I look at the full year let me just see to be more accurate I would see the whole year being down against the previous year even at 300 millimeter but then I would expect that in 27 and 28 it'll be record growth for the RSSLI at 300 millimeter. We have multiple design wins, but they're for phone models that first come out in 28. I mean, that's how the industry works, which means that they would start needing to be bought in the third quarter of 27.

Got it. And then one follow-up, when I look at the overall industry and analog foundry and outside of RF infrastructure, it seems like the overall utilization rate for the industry is improving. Some of your peers have actually talked about higher prices, higher wafer prices, like-for-like. And what I wanted to ask you to better understand is, how should we separate the mix of obviously RF infrastructure, higher growth rate, higher margin, but outside of RF infrastructure, should we also assume that there is some pricing power that is coming to you?

Pricing power is particularly done by having best-in-class platforms, in my mind. So if you have something that allows the customer to gain advantages by using your platform, you can charge a premium for it. We are not a company that likes to indiscriminately raise prices because of a capacity constraint. I think that that's honestly not a partnership model. There's times that potentially customers might have to go on allocation because there's too much demand. but I think that it's not necessarily a good practice as far as relationship and integrity to raise prices just because there's a demand constraint. So in general, our pricing benefits are with new generation platforms for new technologies. And every time that we put out a new platform, the starting price point is certainly higher than the platform that's being sold for that technology presently. I did mention that at the 200-millimeter power management, it did realize a 13% price increase starting, I think, this quarter or throughout this year. That was really in evaluating what is the value of the platform itself as compared to potential price reductions that have been given over the past years and that that just truly needed a reset. But it wasn't based upon looking at a capacity constraint and forcing a customer because they have no other choice. It was basically just reevaluating what is the value of what we're selling and what should the pricing be.

Very insightful. Thank you.

Thank you. And now we're going to take our last question for today. And it comes in of Cody Ackley from Benchmark. Your line is open. Please ask a question.

Hey, guys. Thanks for taking my follow-ups. Just a couple quick ones. Russell, maybe thematically, can you talk about the move to CPO and the industry's larger integrated player in the market of Taiwan Semi and their CMOS integration of the SIFO side of things and their leverage of being a one-stop shop for somebody like an NVIDIA long-term and how does Tower compete with that on a long-term basis with your hybrid strategy?

I have a question. You wanted me to do a marketing for TSMC and that's really not my job. But on a serious base, as I stated, the NPO, XPO, pluggable will stay the primary demand at least into the beginning of the next decade as CPO starts to get greater traction. On the CPO side, I believe that the big benefit that we will add is by having picks that are extremely beneficial because of the performance of the pick itself. I mean, in theory, there's no reason that TSMC wouldn't be buying our pick for their coop if our pick was much superior to everything else. So now there is one thing, well, multiple things you said that's 100% accurate. I mean, TSMC, as a one-stop shop, I think there's nobody that can compete with TSMC with what they're doing on the extreme deep digital content. You know, that is not something we have. So that's not something we could take them on or try to work at or look at. But as far as having modulation with 3.5 and other materials that's much better than anyone else could have, that's where we would add value in that. And that's one of the big things I mentioned on our CPO roadmap is really a very strong focus on modulation.

All right. Great. Thanks, Russell. And then maybe lastly for Oren, can you help us out with any thoughts on future tax rate, interest income, non-controlling interest lines, any of the ancillary items of the income statement?

Financing another income line, which is about $10 million across that I would expect will remain the same, should be on a regular model, which is applicable to all regions, and up to maybe 18%, because we have some regions that are higher than 15, like US 21, Japan, Italy. So I would assume between 15% to 18% on the talk. And the non-controlling interest rate? That should be pretty much like it is now. I mean this quarter we had a specific upside there which I mentioned because of the Japan related income tax benefit Which is not the calling item but excluding that should be like the previous period so it was about Very small amount, right? It's not impacting I'll be in there.

Yeah, Cody I just wanted if I could to clarify what I said when I refer to there's nothing that would prevent TSMC by from buying our picks What I'm including in that is that we become the reference design for the major integrators And that would be part of what they'd be using with TSMC And Russell, maybe can you expand on that with your relationship Your recent relationship with NVIDIA at 1.6T And obviously they have been using Taiwan Semi for their history But they're also partnering with you going forward I wish that I could.

I don't have freedom to talk about specific programs with customers other than the PR that we did with NVIDIA. It was fairly clear that he talked about us as a development partner.

All right. Great. Thanks, you guys. Thank you.

Dear Speaker, for the questions for today, I would like to hand the conference over to Russell and Wanga for any closing remarks. yes thank you very much really appreciate your continued trust and support I want to thank our teams the tower teams around the world whose dedication has made the progress that we reported possible and the progress that we expect to have over the next year and years possible it's a very exciting thing. Success begets success, and the more success we have with our customers, the more excited they are, the more that inspires our own people, and it becomes a partnership that is an incredible partnership. I had mentioned coherent as one, but we have extremely good relationships with multiple of the optimal customers I would think with all of them and it's it's a very exciting thing to have because when the customer is really happy with you and your performance the interactions become very inspiring for next generation to generation off developments so I thank our teams and I really thank our customers the equity stakeholders I truly appreciate your continued trust and support. And we would look forward to seeing you over a variety of events that we have planned for the coming months. On May 18th, we'll participate in the 27th Annual Lopperheimer Israeli Conference in Tel Aviv. On May 27th, we'll attend the 54th Annual TD Cohen Technology Media and Telecom Conference in New York. On May 28th, we'll participate in the 23rd annual Craig Callum Institutional Investor Conference in Minneapolis. On June 9th, we'll attend the 2026 Mitsuho Global Tech Conference in New York. If you have availability to meet any of these, we'd certainly love to meet with you. And as well, as always, our investor relations is very open to accepting calls and setting up video calls with anyone that would wish further updates and understandings about what we think is an extremely exciting activity and a very, very rich roadmap. Thank you very, very much.