Key insights
- An analyst suggests a lawsuit against Tower Semiconductor (TSEM) regarding legacy tech patents is unlikely to impact the company's high-margin silicon photonics business. The analyst views any resulting stock weakness as a potential buying opportunity, as the lawsuit does not affect TSEM's core growth drivers.
In light of the lawsuit that just got released this morning from gfs to tsem. I want to clearly lay out what this means for TSEM as a value play.
In its current status, the patent infringements are related to the legacy tech that’s low margins: RF-SOI, SiGe BiCMOS, BCD power management, analog CMOS
The lawsuit does not include anything related to silicon photonics process technology, optical device fabrication, waveguide integration, photodetector structures, or anything related to Tower’s PH18 platform or their optical interconnect capabilities. This is where high margins come from and why the stock has gone up.
If you’re still worried and don’t want to hold during this storm that has zero impact on the actual future moat of tsem, that’s valid. Just understand this might be a value opportunity that stalls the stock a bit until it continues its rise.