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Posted: Jun 05, 2011
TowerJazz Nearly Doubles its 2010 Production Capacity with Micron's Fabrication Facility in Nishiwaki, Japan
(Nanowerk News) TowerJazz, the global specialty foundry leader, announced today that it completed its previously announced acquisition of Micron Technology's fabrication facility in Nishiwaki City, Hyogo, Japan. The acquisition nearly doubles TowerJazz's current internal manufacturing capacity, cost-effectively increasing production by 60,000 wafers per month. The added capacity to serve the growing needs of its expanding blue chip customer base, combined with the additional business potential in Japan, is expected to help position TowerJazz to achieve its expressed $1 billion annual revenue run rate target by 2014.
This acquisition provides TowerJazz with operational facilities that span the globe with two fabs in Israel, one fab in the United States, additional capacity available in China through manufacturing partnerships, and the newly acquired fab in Japan. As a result, this acquisition enhances the company's geographic reach and distribution capabilities which TowerJazz believes will create a significant opportunity for revenue enhancement and increased efficiencies in manufacturing.
The total value of the transaction, including assumption of liabilities, is approximately $140 million, of which $40 million was paid in cash, approximately 19.7 million Tower ordinary shares and the remainder reflects assumed long-term retirement liabilities that are payable incrementally upon employee retirements. In addition, under a "take-or-pay" supply agreement between the companies, TowerJazz will manufacture products for Micron in the Japan facility for at least the next three years with processing technology licensed from Micron.
"We are excited about the potential of this acquisition and believe this is an opportunity for us to bring our analog specialty leadership to the next level. This acquisition is an excellent strategic fit for TowerJazz; it sends a clear message to our customers that we are positioned to meet their growing needs," said Russell Ellwanger, TowerJazz Chief Executive Officer. "This latest addition of substantial capacity and a well experienced and highly talented technical work force, along with the dedication of our worldwide management and employees will further increase TowerJazz's ability to support our customers' success now and for years to come."
"The acquisition of a high volume manufacturing facility in Japan was not an opportunistic event, but rather a board approved strategy that the management aggressively pursued and executed upon," said Amir Elstein, Chairman of the TowerJazz Board of Directors, "I have personally met with the management of the Nishiwaki facility and am most positive that the employee talent and large factory capacity will be seamlessly incorporated into TowerJazz's global specialty foundry growth and performance leadership."
The facility can support geometries down to 95nm and can also be used to manufacture other products using TowerJazz process technologies. TowerJazz plans to quickly qualify its core power management platforms to serve the substantial growth demand from its Korean customers and then build high end RF capabilities. Increased manufacturing scale and expanded addressable market further supports TowerJazz's position as the number one specialty foundry worldwide.
Tower Semiconductor Ltd., the global specialty foundry leader and its fully owned U.S. subsidiary Jazz Semiconductor, operate collectively under the brand name TowerJazz, manufacturing integrated circuits with geometries ranging from 1.00 micron to 95 nanometer. TowerJazz provides industry leading design enablement tools to allow complex designs to be achieved quickly and more accurately and offers a broad range of customizable process technologies including SiGe, BiCMOS, Mixed-Signal and RFCMOS, CMOS Image Sensor, Power Management (BCD), and Non-Volatile Memory (NVM) as well as MEMS capabilities. To provide world-class customer service, TowerJazz maintains two manufacturing facilities in Israel, one in the U.S., one in Japan and an additional capacity available in China through manufacturing partnerships. For more information, please visit www.towerjazz.com.