Tower said that under the terms of its deal it will not invest any money in the construction of the fab but would contribute to the project by way of its technical knowledge and project management skills. Once the wafer fab is in production Tower will be entitled to up to 50 percent of the manufacturing capacity for its own use. The maximum capacity is projected to be 40,000 wafers per month at maximum.
In an earlier story run by eeNews Europe we reported that Tower had invested alongside Tacoma Technology in the creation of an industrial park in Nanjing in Jiangsu province with an intended ultimate budget of $3 billion. That industrial park was set to include one 200mm wafer fab and one 300mm wafer fab – both to be managed by Tower – according to a report from the China unit of the Israel Export Institute dated August 21, 2016 (see Tower in two-fab project in China, say reports). A ground-breaking ceremony for the industrial park held on June 8, 2016.
In its announcement dated August 21, 2017, Tower did not make reference to a 300mm wafer fab, but nor is the possibility excluded. The agreement covering the creation of the 200mm wafer fab is described as phase one of the framework agreement with Tacoma.
Tower said it expects to receive additional payments over the next few years as the project develops and subject to a definitive agreement specifying all the terms and conditions.
Tower said that the project will be fully funded by Tacoma Technology Ltd. and Tacoma (Nanjing) Semiconductor Technology Co. Ltd., Nanjing Economic and Technology Development Zone, Credito Capital and other potential third party investors. Tower stressed that it will therefore gain considerable manufacturing capacity at zero capital cost while meeting the needs of Chinese industry and Chinese government policy to promote indigenous production of ICs.
Next: Tacoma is responsible
As to how long it will take to create Tacoma Semiconductor as a manufacturing entity, a spokesperson for Tower told eeNews Europe that building a new shell can take between 1.5 and 3 years if all goes well and production chips should start to come out of the building six months after that.
Tacoma is responsible for finding the money for the project and all the deliverables including the construction, commissioning and ramp of this facility.
“We are exploring multiple opportunities in China, and determined this agreement with Tacoma to be a good fit for TowerJazz, providing a roadmap for a meaningful long-term strategic partnership,” said Tower CEO Russell Ellwanger, in a statement. “China’s focus to develop its domestic semiconductor industry with full infrastructure presents additional opportunities for TowerJazz, as a global analog leader, to expand our served markets and geographic presence. This partnership will enable us to further fulfill our customers’ needs through additional available capacity as well as to be an active player in the growing Chinese market.”
Joseph Lee, chairman of Tacoma Technology, said in the same statement: “This venture will become a dominant player in Asia and will raise the standard in the semiconductor industry to another level.”
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