Tower Semiconductor plans to establish its largest optical chip production hub in Japan, as part of a wider $4 billion investment in the country.

The move was disclosed by Tower CEO Russell Ellwanger in an interview with Nikkei Asia.

The Israeli chipmaker already has three manufacturing sites in Japan and originally announced plans to expand its silicon photonics, silicon germanium, and advanced packaging capabilities in July 2026. Tower also operates manufacturing sites in Israel and the US.

At the time, Tower said the expansion across Japan will help support “rapidly growing long-term customer demand,” substantially increasing the company’s manufacturing capacity. Included in the investment total is $1bn in subsidies from Japan's Ministry of Economy, Trade and Industry.

The investment will see Tower convert its Arai fab into a 300mm silicon photonics and advanced optical packaging site, while increasing production capacity at Uozu. A new 300mm manufacturing facility will also be established next to the Uozu fab.

This will allow the chipmaker to produce the equivalent of 45,000 300mm wafers per month in 2029, an approximately 40x increase on production figures from 2025, Nikkei Asia reported. In order to support the expansion, the company will hire around 200 additional workers.

Ellwanger told the news outlet that Tower also plans to bring co-packaged optics and its related production technologies to its Uozu facility.