Tower Semiconductor Collaborates with Renesas to Manufacture SiGe-based Beamforming ICs for Tier-1 Customers in Satcom, 5G, and Aerospace & Defense Applications
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Insights
The projected growth of the Satcom terrestrial market to 150 million users by 2031, as reported by Euroconsult, suggests a significant expansion in the satellite-based internet services sector. This growth trajectory indicates an increase in demand for SiGe-based beamforming ICs, which are critical components in electronically steered antennas (ESAs) used in satellite communication, 5G networks and aerospace and defense applications. The strategic collaboration between Tower Semiconductor and Renesas to manufacture these components could potentially capitalize on the expanding market, which is expected to see a substantial increase in the average yearly Total Addressable Market (TAM) for SiGe wafers.
From a market research perspective, the displacement of mechanical antennas with ESAs indicates a technological shift that could render existing infrastructure obsolete, necessitating upgrades and new installations that incorporate these advanced components. The ripple effect across related industries, such as satellite broadband services and telecommunications equipment, could be substantial, leading to increased revenue streams for companies like Renesas and Tower Semiconductor that are positioned at the forefront of this transition.
The financial implications of the partnership between Tower Semiconductor and Renesas are multifaceted. On one hand, Renesas' design wins with key global players and the commencement of volume shipments are immediate positive indicators for revenue growth. On the other hand, the long-term financial outlook hinges on the companies' ability to maintain a competitive edge through continuous innovation and high-volume production capabilities. The $400 million increase in the average yearly TAM for SiGe wafers over the next decade underscores the potential for sustained revenue growth, assuming the companies can maintain market share against competitors.
Investors should monitor the yield and reliability of Tower's manufacturing processes, as these factors will be critical in fulfilling the high-volume demands of Tier 1 customers. Additionally, the success of Renesas' broad portfolio of beamforming products in securing design wins and volume shipments serves as a proxy for the company's ability to execute its growth strategy effectively. However, investors should also consider the capital expenditures associated with scaling up production and the potential risks involved in the rapidly evolving telecommunications industry.
The collaboration between Tower Semiconductor and Renesas is a strategic move within the telecommunications industry, leveraging Tower's SiGe BiCMOS technology to address the burgeoning demand for high-performance, power-efficient semiconductors. The significance of this partnership lies not only in the immediate business opportunity but also in setting industry benchmarks for the performance of ESAs and millimeter-wave technology.
Understanding the technical aspects of SiGe BiCMOS technology is crucial, as it combines the advantages of silicon germanium (SiGe) with the design flexibility of bipolar complementary metal-oxide-semiconductor (BiCMOS) processes. This enables the creation of semiconductors that are both highly integrated and power-efficient, which are essential for the next generation of communication systems. The increased reliance on ESAs and the push for higher frequencies in telecommunications underscore the relevance of this technology, potentially resulting in a competitive advantage for companies that master it.
Industry stakeholders should recognize the potential for these advanced technologies to drive the next wave of innovation in telecommunications, particularly as the industry shifts towards 5G and beyond. The partnership's focus on high-volume and high-performance solutions reflects the industry's need for scalable and reliable semiconductor technologies that can support the massive infrastructure required for global satellite internet services and advanced communication networks.
The Satcom terrestrial market is expected to grow to 150M users by 2031 according to Euroconsult with the expansion of global satellite-based internet services
MIGDAL HAEMEK, Israel, January 16, 2024 – Tower Semiconductor (NASDAQ/TASE: TSEM), the leader in high-value analog semiconductor foundry solutions, today announced a collaboration with Renesas, leveraging Tower’s high-volume and high-performance SiGe BiCMOS technology to manufacture SiGe-based beamforming ICs. This strategic collaboration underscores Renesas' commitment to innovation as its broad portfolio of beamforming products has already achieved design wins by key worldwide players across 5G, satcom, and Aerospace & Defense markets, positioning the company at the forefront of the industry.
The Satcom terrestrial terminal market is growing rapidly as satellite-based internet services proliferate globally. According to Euroconsult, a market research firm, 71 million people were connected to satellite broadband services in 2022. With the rapid deployment of LEO satellite constellations, this number is expected to double in 2031, reaching over 150 million users. This translates to an increase of
“The unique advantages of Tower’s SiGe BiCMOS technology have empowered us to design and manufacture highly integrated and power efficient semiconductors that set new industry benchmarks,” said Naveen Yanduru, VP of RF Communications at Renesas. “As evidenced by our design wins and volume shipments, the displacement of mechanical antennas by highly agile electronically steered antennas (ESAs) is well underway and will continue to drive exponential SAM growth for beamforming ICs in the coming years. With the continuously surging demand for millimeter-wave technology, our collaboration with Tower Semiconductor has positioned Renesas as a market leader,” Mr. Yanduru added.
Renesas is a global leader in delivering cutting-edge solutions for the telecommunications industry and has made strides in the Satcom and 5G markets through its collaboration with Tower Semiconductor. This capability played a significant role in empowering Renesas to establish and solidify its market leadership.
“We are excited to partner with Renesas in bringing these breakthrough products to market leveraging our industry leadership in SiGe foundry technology along with their strong product development, talent and market presence,” noted Dr. Marco Racanelli, President at Tower Semiconductor. “Our global capacity and engineering agility will ensure Renesas has both the ability to develop new, high-performance products and deliver these in high-volume to their Tier 1 customers.”
Renesas’ portfolio of beamforming products has achieved design wins by several strategic global customers including a tier 1 base station manufacturer, a tier 1 satellite broadband service provider, a major defense contractor, and an antenna supplier for a major aircraft manufacturer, among others.
"We are excited to share that production for these design wins has commenced, and we are now shipping in volumes," added Tumay Kanar, Director at Renesas. "Volume production is being supported by Tower with its high yield and high reliability."
Together, Renesas and Tower Semiconductor are forging a path of innovation and reliability in the Satcom and 5G markets, setting a new standard for semiconductor solutions. This collaboration reaffirms the companies' commitment to driving technological advancements and meeting the ever-growing demands of the telecommunications industry.
For additional information about Tower Semiconductor’s SiGe technology offering, please visit here.
About Tower Semiconductor
Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), the leading foundry of high-value analog semiconductor solutions, provides technology and manufacturing platforms for integrated circuits (ICs) in growing markets such as consumer, industrial, automotive, mobile, infrastructure, medical and aerospace and defense. Tower Semiconductor focuses on creating positive and sustainable impact on the world through long-term partnerships and its advanced and innovative analog technology offering, comprised of a broad range of customizable process platforms such as SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, non-imaging sensors, integrated power management (BCD and 700V), and MEMS. Tower Semiconductor also provides world-class design enablement for a quick and accurate design cycle as well as process transfer services including development, transfer, and optimization, to IDMs and fabless companies. To provide multi-fab sourcing and extended capacity for its customers, Tower Semiconductor owns two manufacturing facilities in Israel (150mm and 200mm), two in the U.S. (200mm), two facilities in Japan (200mm and 300mm) which it owns through its
Safe Harbor Regarding Forward-Looking Statements
This press release includes forward-looking statements, which are subject to risks and uncertainties. Actual results may vary from those projected or implied by such forward-looking statements. A complete discussion of risks and uncertainties that may affect the accuracy of forward-looking statements included in this press release or which may otherwise affect Tower’s business is included under the heading “Risk Factors” in Tower’s most recent filings on Forms 20-F, F-3, F-4 and 6-K, as were filed with the Securities and Exchange Commission (the “SEC”) and the Israel Securities Authority. Tower does not intend to update, and expressly disclaim any obligation to update, the information contained in this release.
Tower Semiconductor Company Contact: Orit Shahar | +972-74-7377440 | oritsha@towersemi.com
Tower Semiconductor Investor Relations Contact: Noit Levy | +972-4-604-7066 | noitle@towersemi.com
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