Tower in two-fab project in China, say reports

Tower in two-fab project in China, say reports

Business news |
By Peter Clarke

Although Tower, which trades as TowerJazz, does not appear to have made any public announcement about a deal in Nanjing there are reports in China and Israel that Tower has invested, with fingerprint sensor company Tacoma Technology, in the creation of an industrial park in Nanjing in Jiangsu province with a budget of $3 billion. That industrial park is set to include one 200mm wafer fab and one 300mm wafer fab that will both be managed by Tower, according to a report from the China unit of the Israel Export Institute dated August 21, 2016.

The Israel Export Institute references Chinese language reports from China’s Israel Trade Organization and industry organization SEMI that highlight a ground-breaking ceremony for the industrial park held on June 8, 2016.

In addition to two wafer fabs the park is set to have an IC packaging and test operation as well as design facilities, the reports said. A posting from the official Facebook page of China’s Jiangsu State posted on June 12, 2016, also provides the basic information about a two-fab deal.

None of the reports indicate how much Tower or Tacoma has invested or how much may be coming from the Chinese state or the local municipality. Nor were timetables given for the erection of fab shells, the installation of equipment or the ramping of IC production. According to a SEMI report on wafer fabs in China, a 300mm wafer fab belonging to Tacoma Semiconductor is scheduled but on a timetable yet to be decided (see China’s projects driving global fab equipment sales). Similarly, there is no indication of the manufacturing capacity these fabs will have or by when that capacity will be achieved.

The reports state that Tacoma Technology was set up in Hong Kong in 2003 and specializes in optical CMOS fingerprint recognition systems.

This would represent a good match for Tower, which has expertise in manufacturing CMOS image sensors. As a speciality foundry Tower serves companies across almost all application sectors –  consumer, automotive, medical, industrial, aerospace and defense – with a variety of manufacturing processes for RF circuits, high-performance analog, power management ICs, image sensors and MEMS.

Tower was approached for information for this story but declined to comment.

Next: Conference call

In a conference call to discuss Tower’s 4Q16 financial results CEO Russell Ellwanger spoke about Tower’s China strategy without referring to Nanjing or any other location in China but saying he expected it would take about two years from the start of fab building on a greenfield site to commercial production (see Tower wants to build China fab).

Tower had a previous plan to build a wafer fab in India as part of a consortium with IBM, but that deal appears to have collapsed (see Lead partner pulls out of India fab plan).

Tacoma Semiconductor will be joining the leading foundry TSMC in Nanjing. Ground was broken Thursday July 7, 2016 for the construction of a 300mm wafer fab for TSMC that also has a projected cost of $3 billion. That is scheduled to see first production in 2018.

Related links and articles:

Israel Export Institute report

Jiangsu Province Facebook report

News articles:

China’s projects driving global fab equipment sales

Tower wants to build China fab

Lead partner pulls out of India fab plan

Foundry Tower reports record financial year

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