Good day. Thank you for standing by. Welcome to the Tower Semiconductor first quarter 2026 results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question-and-answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will hear an automatic message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Noit Levy. Please go ahead. 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 Ellwanger, 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 20-F and 6-K, as well as filings with the Israel Securities Authority, all available on our website. Tower assumes no obligation to update any such forward-looking statements. Our first quarter 2026 results are prepared in accordance with U.S. GAAP. Some data presented may include non-GAAP financial measures as defined under SEC Regulation G. Reconciliation to GAAP figures and full explanations are provided in today's press release and financial tables. For your reference, a supporting website is available on our website and integrated into this webcast. With that, I'd like to turn the call to our CEO, Mr. Russell Ellwanger. Russell? Thank you, Noit. 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 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 ±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 SiPho 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 expressed 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 SiPho customers serving various end market applications. These commitments, together with our continued technology leadership and strategic expansion of 300 mm and global manufacturing capacity, provide us with enhanced revenue visibility and confidence in sustained profitable growth. Our recently announced restructuring deal in Japan in TPSCo marks a significant milestone in advancing our long-term 300 mm strategy. By transitioning to full ownership of the 300 mm factory Fab 7 in Uozu, 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 mm expansion tied to the approval of many grants 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 mm platforms not only as a 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 entering into a long-term supply agreement with Nuvoton for Fab 5 Tonami. This will ensure manufacturing continuity for our 200 mm 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 up 9%, RF SOI up 12%, 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 ramp of 200 Gbps 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 SiPho production ramp in each of Fab 2 Migdal Haemek, Fab 3 Newport Beach, Fab 9 San Antonio, and Fab 7 Uozu, Japan, 300 mm. Among this, we successfully achieved in Q1 first flow SiPho revenue shipments from both Fab 2 and Fab 7, the latter having achieved impressive 95% yield for the first SiPho wafers leaving the factory. Our expansion remains on track to grow SiPho capacity five times from the base of our Q4 2025 wafer revenue shipments by the end of this year, 2026. In 2027, we anticipate our focus will turn primarily to additional 300 mm capacity expansion in the Uozu 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 Gb per lane Mach-Zehnder 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 Gb per lane indium phosphide electro-absorption modulator on our silicon PH18DA platform. In addition, we made strong strides towards bringing thin film lithium 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, Scintil Photonics, announced availability of the world's first heterogeneous integrated dense wavelength division multiplexer, 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 served generations of pluggables and highlighted by Andy Bechtolsheim 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. 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 SiPho 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. We are investing heavily in several CPO technologies, namely in-house 200 mm and 300 mm hybrid bonding with Through-Silicon Vias to seamlessly attach SiPho 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 SiPho, our silicon germanium platform is experiencing unprecedented demand for use in drivers and transimpedance amplifiers for optical transceivers, and also for active copper cables that can be an attractive alternative to optical for short distance scale-up architecture. 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 chips 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 silicon image platform being well suited to support these growing applications. Looking at RF mobile, we continue to move our RF SOI 200 mm technologies to 300 mm to take advantage of finer line and other enhanced capabilities offered at 300 mm, whilst repurposing this 200 mm capacity for higher margin SiPho and SiGe capabilities. Substantial improvements of our Ron x Coff relative to competitors and reduced layer count is creating a strong design win momentum that positions our 300 mm RF SOI platform for sustained growth over the next multiple years. In power management, we have seen year-to-year revenue growth in both our 200 mm and 300 mm BCD offerings. In the last quarter, we announced the release of our latest power platform, Gen3, achieving on resistance below 1.5 milliohm millimeter squared for key devices with operating voltages above 10 V. Such 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 to 800 V 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 mm BCD pricing has increased by 13%. Image sensors. The fastest-growing CIS segments are automotive, industrial, machine vision, and high-end video cameras. Growth in each of these areas is concentrated in the high-end portion, where high resolution, high dynamic range with sensitivity to low light, and global shutter technology are required. Tower's 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 as SiPho and SiGe qualifications continue. Fab 3 operated at 80% utilization. Utilization was slightly constrained due to adding newer SiPho and SiGe 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. Thank you, Russell. Hello, everyone. 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 investments. Looking into the P&L, revenue for the first quarter of 2026 was $414 million, representing 15% year-over-year growth compared to $358 million in the first quarter of 2025. Gross profit for the first quarter of 2026 was $111 million, an increase of 52% compared to the first quarter of 2025. Operating profit was $65 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, by which we estimate all-in tax rates to be above 15% following Pillar Two 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, an increase of 62% or $25 million compared to net profit of $40 million 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 $0.58 basic and $0.57 diluted, which is 61% and 63% higher year-over-year, respectively. As we announced, we received $290 million of SiPho 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 report for Q1 2026 as 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 fab machinery, and $2 billion of current assets. 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 & Poor 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 activity. In relation to the Japanese yen, since the majority of TPS Co's revenue is denominated in yen, and the vast majority of TPS Co's 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 shekels, we also hedge a large portion of such currency risk by engaging zero-cost cylinder transactions to mitigate this exposure. While the Israeli 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 SiPho and SiGe demand, we are executing a $920 million investment plan in capacity and capability of SiGe and SiPho in our 8 in fabs in Israel, Newport Beach, Texas, and also in our 12 in Uozu fab in Japan. This investment is on track in terms of purchase orders issued, technology and process qualification, and the ramp plan. 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. I'd like to turn the call back to the operator so we can take your questions. Operator? Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one and one again. Please stand by while we compile the Q&A roster. This will take a few moments. Now we're going to take our first question. It comes to line of Mehdi Hosseini from Susquehanna Financial Group. Your line is open. Please ask your question. Yes. Thanks for taking my question. A couple from me. Russell, if you just think about the big picture and longer term trends, is there any way you can help us understand how opportunities for Tower as it relates to silicon photonics and silicon germanium changes as we migrate from a pluggable transceiver to optical? In other words, how does your content change as you make this transition from a traditional pluggable transceiver to 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 for higher speeds. 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. As far as MPO, again, many more channels being done, so greater modulation. Sure. I asked 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 that 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 SiPhO ports itself, it's very interesting. From 2025, the amount of SiPhO ports, and this is according to a report by LightCounting, the amount of SiPhO ports was 30 million, driving to 2028 SiPhO ports to 137 million. At the same time, the total ports goes from 90 million to 205. This is, you know, a function of the data center, build-up, build-out, et cetera. 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, where we have multiple design wins presently and stated that we have a reasonable volume that will be shipping in 2026, 2027. We have as well, I think a very strong position in the XPO that was highlighted by Andy at the OFC, as I mentioned, having had two strong demonstrators at OFC using our SiPho. If you just look again, the growth of SiPho ports is 4.5x from 2025 to 2028, and that entire amount of port growth is added from 2028 to 2030. We are, I believe, by far the leader in pluggables. I don't see any reason that that should change. In the short term, the XPO and the MPO form factors should transition nicely with Tower maintaining leadership. Great. Thanks for the details. Just a quick follow-up. I understand investment community is focused on silicon photonics, and thank you for identifying revenue opportunities, especially what you have contracted for 2027. Is there any way to think about the ratio between SiPho and silicon germanium? Because silicon germanium is also used in transceiver. If you have extended visibility on the SiPho, would that gives you a visibility on the SiGe, and is there a ratio that we could use to understand opportunities that you have focusing on SiGe? Yeah, you're correct. It's very much hand in hand. As the ports increase and the movement to SiPho increases, that obviously the SiPho grows. As 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 SiPho technology and the fact that although they both demand very good margins, SiPho is demanding a higher margin than the SiGe. The SiGe revenue growth is lower than the SiPho revenue growth. As far as the amount of units, they pretty much go hand in hand. Got it. Thank you. I'll go back into the queue. Thank you. Now we're going to take our next question, the question comes to line of Cody Acree from Benchmark. Your line is open. Please ask your question. Hey, Cody. Yeah. Thanks, guys. Hey, guys. Thanks for taking my questions and congrats on just a stellar quarter and guidance. Russell, maybe could I just get a quick clarification on the $1.3 billion commitment. Excuse me. Is that for wafers to be delivered in fiscal 2027, or is that wafers started that then would extend delivery to 2028? Just trying to get my model correct. Wafers delivered in 2027. The, what I stated about a higher volume for 2028 is wafers delivered in 2028. Again, 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. The $1.3 billion, if you look at it, what were we in 2025? I think somewhere about $230 million. It's a two year from a $230 million to a $1.3 billion. That $1.3 billion is not what we're forecasting for SiPho in 2027. Well. Forecasting substantially higher. Yes, 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? It's a very good question, Cody. When you say long-term model, it was a 2028 model. Right. In my mind is somewhat of a midterm model. I talked about our focus for 2027 will be increasing 300 mm SiPho capacity, you know, the strategic focus, and hand in hand comes the SiGe capacity as well with 300 mm. That is not included in any model right now. The visibility, I think, will be fairly short term. The timing of updating a model to higher numbers, I would believe will be within the next quarters. Well, that's excellent, Russell. Thank you for that clarification and the correction on- Good question, Cody. Appreciate the question. Long term versus midterm. Thank you. Then one last question, if I may. What is your view on integration of indium phosphide lasers? I know there's been a lot of industry concern about 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 major thing that we're focused on is just the integration, a strong integration of the laser into the silicon photonics IC. 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 OpenLight and the OpenLight platform, it's going very well. 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 G. 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 very advanced 400 G modulation. If you look at advanced modulators, the indium phosphide has tremendous advantages on form factor. Russell, if I may, since you brought it up, I guess I'll just sneak one last one in here then. 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 in all. It's, you know, the thin film lithium niobate has multiple different ways to architect it. 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, you know, an integrated onto the PIC. We're somewhat agnostic as to which one a customer would use. However, as you get to many channels, the indium phosphide really has a benefit on form factor. All right, great. Thanks, Russell. Thank you, Cody. Very good questions. Appreciate it. Thank you. Thank you. Now we're going to take our next question. The question comes line of Richard Shannon from Craig-Hallum Capital Group. Your line is open. Please ask your question. Hey, Richard. Russell, hi, how are you? Very good, thank you. Excellent. Apologies for the ambient noise here. I'm just about ready to board a plane here. If it's too loud, I'll try to call in later. I guess I just have two basic questions here. The first one was regarding 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 photonics as you get the, at least the first parts of the tranche, the tranches I'm sure you're building there. Do you have any worries about being short of capacity in silicon photonics before that Japan capacity expansion has started. Excellent question. We're looking and hoping and believing that we'll, in the very short term, receive the METI approval. We've already obviously begun with contractors to get planning done, to get everything done. Once we have the METI approval, we'll most likely put in for the permits. That is probably a year and a half type of a timeframe between breaking ground and having a facility that can be accepting tools and starting ramping the tools. Where does that put us? That puts us, in best case, in the first half of 2028 for that capacity. When you say worries, I mean, worry is an interesting question. Worries are also excitement, depending on how you turn it around. The excitement right now is increasing with an existing footprint, our capability with silicon photonics in Fab 7, which is the existing factory. We have approved capital spending for that for the first phase of it, which we've not publicly announced. I don't wanna 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. Then we have an ability to go further before the shell is completed by taking advantage of an existing factory within the TPSCo complex. It was one that we announced a couple of years ago that we had shut down, and that was the Arai factory, which is under the ownership of Nuvoton Winbond. To put 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. Our plans is not to miss out on any upside or not Our plan is certainly to meet customers' demand within 2027 while developing meaning building the shell that is substantially big. It 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, would over time come back into the existing geography. Well, not the existing, but the existing and built-out geography. Hopefully, that was not too obtuse of an answer. A lot of explaining parts on it, but did that make sense, Richard? It does. I'll revisit your comments and look at them more closely, but that was very detailed and helpful. My second question, and I'm gonna go on mute after this one and we'll see your responses, on your announcement on the 400 G per lane silicon modulator for silicon photonics you announced with Coherent. Yes. Two part questions. First of all, can you use this technology or something similar with other customers? As you look across the 400 G per lane generation, how much of your business will be silicon versus TFLN versus indium phosphide versus any other modulator technology? Thank you. On the first question, 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 Coherent's design tied to our platform. If that makes sense, it's not something that we can give to anyone else. It's Coherent's IP. Coherent, in 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 first technologies to be utilized. My personal view, and this is my view, and I'm certainly not a market analyst. I think the lithium niobate 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 phosphide. Great. Thank you, Russell. Thank you. Thank you. Now we're going to take our next question, It comes line of Lisa Thompson from Zacks Investment Research. Your line is open. Please ask your question. Hi. 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 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 assumed incremental revenue coming at 59% to the gross profits over a baseline, which was 20% a year ago. Last year, as you see in this report, Q1 2025 gross profit was 20%. In our model, we assumed the incremental will come at 59%, and the fully built out model will reach to 39%. This quarter, we already achieved 27%. Like you said, it's very nice that we already are up from the 20%- 27%. That's the linear progression that we expect towards the 39% when we achieve the 2.8. It's really just selling more newer higher margin products. Yes. Yes. Okay. Okay. 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 being constrained? I know indium phosphide is hard to get and is constrained. Is that gonna change anything or do customers just switch to something else? 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. No, I think we have good plans and good supply chain activities so that whatever constraint issues there might be, we're working through. As these products ramp, which they should be ramping on the indium phosphide integrated laser, it should be ramping this year, I believe that we'll be in good position to meet the demand. Okay. Thank you. Those are my questions. Thank you. Now we're going to take our next question. The question comes line of Krish Sankar from TD Cowen. Your line is open. Please ask your question. Yeah. 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 photonic market share is today, and where do you think it'll be in the next couple of years, given your longer term contractual contracts with your customers. I'm asking in light of the fact that, you know, GlobalFoundries is ramping scale and TSMC is ramping their COUPE platforms. I'm just curious where you think your market share could head from today through the next two years. Then I have 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 at present, but I think that we're certainly the leading market share, and by far the leading market share in silicon photonics presently. I see no reason why that should change. Got it, Russell. Just to follow up on the technology side of advanced packaging. Clearly, you do have experience with hybrid bonding on CMOS image sensors. When do you think that ports over to the silicon photonic side? Is that a real advantage in the short term or is this something more of a longer term story? I think it's a very strong advantage mid to long term. 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. The question comes line of Mehdi Hosseini from Susquehanna Financial Group. Your line is open. Please ask your question. Yes. Thank you. Just a couple of follow-up. RF mobile was down almost 36% quarter-over-quarter. Obviously it sets up a low base, and I expect growth for the remaining of the year. How should I think about the RF mobile in 2026 versus 2025? I have a follow-up. Yeah. I just know that indeed Q4 25 was an exceptional growth in SOI compared to previous quarters. Year-over-year, it's not was not reduced. It just really was a specific ramp in Q4 25. Okay. Russell will address 2026. Yeah. As stated, we're moving away from our 200 mm RF SOI and customers as well, transitioning to newer 300 mm design wins. The design win 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 mm versus 300 mm, but the 200's almost gone. In the very short term, not everything has transitioned to 300 mm yet. You are correct, it was down and, you know, if I look at the full year. Let me just see if to be more accurate, yeah, I would see the whole year being down against the previous year, even at 300 mm. I would expect that in 2027 and 2028 it'll be record growth for the RF SOI at 300 mm. We have multiple design wins that have been awarded, but they're for phone models that first come out in 2028. I mean, that's how the industry works, which means that they would start needing to be bought in the third quarter of 2027. Got it. Okay. 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. What I wanted to ask you, a better understand is, how should we separate the mix of obviously RF infrastructure, higher growth rate, higher margin. 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. 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. 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. In general, our pricing benefits are with new generation platforms for new technologies. 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 mm power management, it did realize a 13% price increase for, you know, 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 just truly needed a reset. It wasn't based upon looking at a capacity constraint and, you know, 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. Great. Very insightful. Thank you. Thank you. Now we're going to take our last question for today. It comes in of Cody Acree from Benchmark. Your line is open. Please ask your question. Hey, guys. Thanks for taking my follow-ups. Just a couple of 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 SiPho side of things, and you know, 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? Yeah. I think for part of your question, you want me to do a marketing for TSMC, and that's really not my job. No, 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 PICs that are extremely beneficial because of the performance of the PIC itself. I mean, in theory, there's no reason that TSMC wouldn't be buying our PIC for their CoWoS if our PIC was much superior to everything else. 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. That's not something we could take them on or try to work at or look at. As far as having modulation with three, five and other material that's much better than anyone else could have, that's where we would add value in that. 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. 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. Tax line, like I said in my prepared remarks, should be on a run rate, I mean, on a regular model, at least 15% because of Pillar Two, which is applicable to all regions, and up to maybe 18% because we have some regions that are higher than 15%, like U.S. 21%, Japan, Italy. I would assume between 15%-18% on the tax. The non-controlling interest line? 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 non-recurring item. Excluding that should be like the previous period, so it was about very small amount, right? It's not impacting our opinion. Cody, I just wanted, if I could, to clarify what I said. When I refer to there's nothing that would prevent TSMC from buying our PICs, 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. Russell, maybe can you expand on that with your relationship, your recent relationship with NVIDIA at 1.6 T and obviously they have been using Taiwan Semi for their history, but they're also partnering with you going forward? Yeah. Cody, I really honestly 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. The speakers are done for the questions for today. I would now like to hand the conference over to Russell Ellwanger 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, 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'd mentioned Coherent as one, but we have extremely good relationships with multiple of the optical customers. I would think with all of them. 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, two generation off developments. I thank our teams, and I really thank our customers. As far as 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 Oppenheimer Israeli Conference in Tel Aviv. On May 27th, we'll attend the 54th Annual TD Cowen Technology Media and Telecom Conference in New York. On May 28th, we'll participate in the 23rd Annual Craig-Hallum Institutional Investor Conference in Minneapolis. On June 9th, we'll attend the 2026 Mitsui Global Tech Conference in New York. If you have availability to be at any of these, we'd certainly love to meet with you. 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. This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.