2024-04-18 03:50:58 ET
Summary
- Tower Semiconductor is one of the ten largest pure-play foundries in the world by revenue.
- Tower entered into two agreements to increase its production capacity, which could boost its revenue by around 90% in the next 2-3 years.
- TSEM lacks a clear moat that may limit its ability to improve its margins.
- While I wouldn't buy Tower now, there is a chance for a great opportunity and hence I will keep an eye on Tower.
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Investment Thesis
Tower Semiconductor Ltd. ( TSEM ) is expected to increase its revenue. However, targeting a highly competitive market, which is threatened by Chinese foundries, and lacking a clear competitive advantage, as well as its current fair valuation, makes me to recommend a "Hold" rating for Tower at this time....
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Tower Semiconductor: Revenue Expected To Grow By 90% But Stay Prudent For Now