Specialty foundry Tower Semiconductor Ltd. (Migdal Haemek, Israel), which trades as TowerJazz, has announced the formation of a joint venture with Panasonic Corp. to take control of three of the Japanese company's wafer fabs.
The deal, which comes with five years of legacy manufacturing orders for Panasonic, will allow Tower to increase its annual production revenue to greater than $900 million, but means that Tower will close its Nishiwaki wafer fab as its restructures and rationalizes its business in Japan. Tower had full-year sales in 2012 of $639 million.
Tower offered $140 million for the Nishiwaki fab, which it bought from Micron Technology Inc. in 2011. In contrast, it plans to issue Tower stock to the value of $7.5 million for its 51 percent stake in the joint venture, and control of the three Panasonic fabs. Panasonic retains a 49 percent stake in the joint venture and as a result of being paid in stock becomes a minority stakeholder in Tower Semiconductor Ltd., holding approximately 1.8 percent of the company's ordinary shares.
Meanwhile Tower said it has retained the services of a Japanese outplacement company, with a history of 95 percent placement success, to facilitate continued employment to the remaining employees. Products currently being manufactured at the Nishiwaki facility for key customers, will be transferred to other Tower wafer fabs.
Panasonic has transferred its semiconductor manufacturing process and capacity tools for 200mm and 300mm-diameter wafers at its Hokuriku factories in Uozu, Tonami and Arai to the JV. Panasonic has committed to acquire products from the JV for at least five years of volume production, Tower said.
The JV will allow Tower to offer 65nm CMOS image sensor technology and 45nm digital CMOS as well as adding 800,000 wafers out per year in manufacturing capacity.
"This joint venture and 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, in a statement.
Ellwanger added: "We greatly appreciate the dedication and performance of our Nishiwaki employees. It is important to note that our intention to cease operations of this facility is business and shareholder value based only, and not a reflection of the quality and performance of the facility."
Related links and articles:
News articles:
India Details Wafer Fab Subsidies
