Tower Semiconductor shares rallied 26% in April, driven by positive semiconductor sector sentiment and a new defense industry chip partnership.

Tower Semiconductor announced it will produce a high-performance radar beamforming chip from Axiro Semiconductor for the U.S. defense industry, using Tower's Silicon Germanium (SiGe) technology, at Tower's U.S.-based fabrication plants.

Tower differentiates itself through intellectual property in specialty semiconductors, particularly silicon photonics (SiPho)—a technology seen as important for AI networking—rather than producing the most cutting-edge chips.

The stock has gained 486% over the past year and trades at 71.3 times this year's earnings estimates; positive earnings reports from major chipmakers like Taiwan Semiconductor Manufacturing in April likely contributed to sector-wide momentum that lifted Tower's shares.