Tower Semiconductor forecasts quarterly revenue above estimates on steady wireless chip demand

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(Reuters) -Contract chipmaker Tower Semiconductor forecast second-quarter revenue above Wall Street estimates on Wednesday, driven by strong demand for wireless communication and power management chips.

The Israel-based company specializes in analog and mixed-signal semiconductor manufacturing, catering to industries such as automotive, industrial, consumer electronics and communications.

While demand from key industries such as automotive has been choppy in recent quarters, with inventory corrections and softer electric-vehicle demand weighing on orders, Tower Semiconductor is benefiting from higher demand in other end-markets.

The company said it saw record revenue from radio frequency infrastructure technologies, used in wireless communication and sensing applications.

Tower Semiconductor forecast second-quarter revenue of $372 million, with an upward or downward range of 5%, slightly above analysts’ estimates of $371.3 million, according to data compiled by LSEG.

Tower Semiconductor has also been ramping up capacity by expanding its facility in Agrate, Italy. While that has driven up costs, it still reported an adjusted profit of 45 cents per share in the first quarter, beating estimates of 38 cents.

The company also reaffirmed its expectations for sequential growth in its quarterly revenues throughout the year. It reported revenue of $358.2 million for the quarter ended March 31, in line with estimates.

The U.S.-listed shares of the company were down about 1% in premarket trading.

(Reporting by Meghana Khare; Editing by Shailesh Kuber)