Tower Semiconductor Ltd. (Migdal Haemek, Israel), the foundry that trades as TowerJazz, has announced second quarter revenues of $234.1 million, up 76 percent sequentially and 87 percent year-over-year. The high growth was due to the inclusion of sales figures from Tower Panasonic Semiconductor Co., a joint venture that operates three wafer fabs in Japan and in which Tower has a 51 percent stake.
The company did make a net loss of $16 million in the second quarter partly on exceptional items associated with its participation in the joint venture but in the first half of 2014 Tower made a net profit of $23 million on revenues of $367 million, up 54 percent year over year.
The GAAP net loss for the second quarter of 2014 included $4 million of non-cash cost resulting from the cessation of operations at the Nishiwaki Fab in Japan, which was announced in the first quarter of 2014, and a gain from acquisition derived from the high value assigned to Tower’s 51 percent stake in TPSCo of $15 million.
Panasonic has transferred its semiconductor manufacturing process and capacity tools of 8 inch and 12 inch wafers at its Hokuriku factories (Uozu, Tonami and Arai) to the joint venture, committing to acquire products from it for at least five years of volume production. The joint venture started operations on April 1 and Tower has also been able to offer production capacity there to IDMs and fabless chip companies.
Tower reported $192 million in cash and short-term deposits at the end of the second quarter up from $183 million as of March 31, 2014.
The company said its expects sales to fall slightly in the third quarter to $225 million plus or minus 5 percent. The mid-point guidance will represent a 70 percent year-on-year growth.
"The second quarter was our first integrating TPSCo activities and consolidating the revenues. There were no operational surprises against our plans and better than expected business activities. We closed negotiations with 3rd party customers, including high-end CIS [CMOS image sensor] and top-tier IDM transfers, which should reach annual revenues of well beyond $100 million within the next 3 years. We expect these first contracts and agreements to begin volume production ramp in the second half of 2015," said Russell Ellwanger, CEO of Tower, in a statement.
"We are seeing strong market demand from customers being served by all of our business units, which we are well poised to serve both organically and with the newly added operational and technical capabilities of TPSCo, enabling us to exceed our $1 billion annual revenue target," he concluded.
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