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Tower buys three wafer fabs for $8 million

Tower buys three wafer fabs for $8 million

Business news |
By eeNews Europe



The two companies are forming a joint venture in which Tower, which trades as TowerJazz, will hold 51 percent and Panasonic has pledged to purchase chips from the JV in volume for five years.

In consideration of its acquisition of 51 percent in the JV Tower is issuing $8 million in shares and Panasonic will become a minority shareholder in Tower Semiconductor Ltd. As well as the fabs and the tools the joint venture will get $40 million in cash to be invested by Panasonic and work in progress and inventories manufactured at the fabs before the closing date.

Panasonic is acting as part of efforts to exit the semiconductor industry, stem losses and reduce its workforce.

While most of the 2,500 jobs associated with the Panasonic fabs will will transfer to the joint venture Tower said that after the acquisition it will rationalize its Japanese business. This may include consolidations between its Nishiwaki fab and those of the joint venture. The company said it is therefore evaluating possibilities for the Nishiwaki facility.

Under the terms of the deal Panasonic will transfer to the joint venture its semiconductor manufacturing processes and manufacturing equipment for 200- and 300mm diameter wafers at its Hokuriku factories in Uozu, Tonami and Arai. The deal will add $400 million of annual revenue to Tower’s books and 800,000 wafers of annual capacity (200mm diameter equivalent). TowerJazz had full-year sales in 2012 of $639 million.

The deal will also extend Towers’ manufacturing process capability. One of the wafer fabs produces analog circuits on 300mm diameter wafers and Tower will also receive 65nm CMOS image sensor process and additional 45nm digital technology. The deal is expected to close by April 2014. The high-definition front-side illuminated CMOS image sensor process is suited to high performance sensors used in high-end digital single lens reflex cameras. A high-voltage SOI process will extend Tower’s bipolar-CMOS-DMOS process from 80V up to 190V enabling Tower’s entry into some display driver and medical markets.

Tower said that, following the acquisition of the three Panasonic wafer fabs, it will rationalize its Japanses business. This may include consolidations between its Nishiwaki fab and those of the joint venture. The company said it is therefore evaluating possibilities for the Nishiwaki facility.

"This partnership brings together two leaders – Panasonic, an acknowledged analog components and systems leader, and TowerJazz, a recognized analog foundry leader – to create a company that will serve and grow the analog foundry space as no existing single foundry company can," said Russell Ellwanger, CEO of Tower Semiconductor, in a statement.

Related links and articles:

www.towersemi.com

News articles:

Panasonic to sell wafer fabs to Tower

Analog foundry put up for sale

Tower transfers SiGe process to Israel

Specialty foundries seek new growth strategies

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