TowerJazz revenue to increase by approximately $400 million a
year, enabling a $900 million annual run rate opportunity starting Q2
2014 and improving profitability following the closing of this
transaction
Highlights of the Deal
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TowerJazz to hold 51% of the joint venture (JV)
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Provides TowerJazz with incremental annual revenues of approximately
$400 million and above that substantial capacity for additional
foundry business growth
-
Added available capacity of approximately 800,000 wafers per year (8
inch equivalent) in three manufacturing facilities in Japan
-
Panasonic committed to acquire its products from the JV for a period
of at least 5 years of volume production
-
Expanding TowerJazz leadership to include a state of the art 300 mm
analog technology fab including best of class 65nm CMOS image sensor
dark current and quantum efficiency performance and additional 45 nm
digital technology
-
Closing of the transaction expected to be by April 2014
MIGDAL HAEMEK, Israel--(BUSINESS WIRE)--Dec. 20, 2013--
TowerJazz, the global specialty foundry leader today jointly announced
with Panasonic Corporation (First Section of TSE and NSE ticker: 6752),
the signing of a definitive agreement to create a joint venture (JV) to
manufacture Panasonic’s products. Within the scope of the JV, Panasonic
will transfer its semiconductor manufacturing process and capacity tools
of 8 inch and 12 inch wafers at its Hokuriku factories (Uozu, Tonami and
Arai) to the JV, committing to acquire its products from the JV for a
long term period of at least five years of volume production, and will
transfer to TowerJazz 51% of the shares of this JV.
Following this transaction, TowerJazz will rationalize its Japanese
business, which may include fab consolidations between TowerJazz's
Nishiwaki facility and the JV's facilities, and to this end, TowerJazz
is evaluating potential ventures for the Nishiwaki facility.
The JV will continue the production of Panasonic's semiconductor
processes as Panasonic's subcontractor as well as seek to expand
operations by leveraging TowerJazz's customers and businesses to capture
out-of-group sales.
The JV is expected to increase TowerJazz’s technology offerings by
providing multiple additional specialty flows, including Panasonic's
world-class specialty flows such as High Definition FSI – a world famous
CIS (CMOS Image Sensor) benchmark technology for high quantum
efficiency, low dark current CIS technology, and high voltage SOI
(silicon-on-insulator) based power management technologies.
High Definition FSI is a unique technology that enables the use of front
side illumination (FSI) even for small pixels, where usually, an
expensive backside illumination (BSI) is being widely used in the
industry. High Definition FSI consists of light separation walls
combined with a light pipe structure that funnels the light into the
individual pixels with minimal light loss. This technology provides high
sensitivity (high quantum efficiency) to light, low sensitivity to
different angles of light that helps in preventing shading at the
periphery of the image and excellent color separation leading to true
and vivid colors.
The dark current performance CIS technology is known to be one of the
best in the industry, not only in the average very low values of dark
currents even at elevated temperatures, but also with extremely small
tail of high dark current pixels, known as “bright pixels”. As a result,
Panasonic technology allows excellent images at low light conditions
(night) with no bright pixels in the image. This technology is well
suited for high end DSLR (digital single lens reflex) type cameras.
The production of High Voltage SOI technology from Panasonic immediately
extends TowerJazz's BCD (Bipolar-CMOS-DMOS) offering from 80V to 190V
enabling entry into new display driver, industrial and medical markets
previously not accessible. The technology includes a low-Rds(on)
integrated IGBT (insulated-gate bipolar transistor) to enable efficient
high-voltage drivers, 5V CMOS for integration of digital and analog
functions, SOI substrates for virtually perfect signal isolation, and
thick Cu layers for low-loss interconnects.
Amir Elstein, TowerJazz Chairman, stated, "This acquisition and the JV
creation with Panasonic Corporation is just one of the culminating
strategic events, that is enhancing TowerJazz's business leadership, and
is intensively focused on creating shareholder value."
Russell Ellwanger, TowerJazz CEO, commented, "We are honored to place
our name side by side with Panasonic Corporation to create an innovative
joint venture that provides high capacity, highest quality, multiple
world leading analog platforms and, as well, 300mm advanced technology
nodes. 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."
As consideration for its 51% equity holding in the JV, after closing of
this transaction, TowerJazz will issue to Panasonic ordinary shares in
the value of approximately $8 million, to be calculated based on
TowerJazz average shares value during March 2014. As a result of holding
its ordinary shares, Panasonic will become a minority stakeholder in
TowerJazz.
The JV balance sheet assets will include, among others, the cap-ex tools
of the three fabs, cash in the amount of approximately $40 million to be
invested by Panasonic and work in process (inventories) manufactured at
Panasonic fabs before the closing date.
Tower Jazz was represented on the transaction by Yigal Arnon & Co. and
DLA Piper law firms.
About TowerJazz
Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), its fully owned
U.S. subsidiary Jazz Semiconductor Inc., and its fully owned
Japanese subsidiary TowerJazz Japan, Ltd., operate collectively under
the brand name TowerJazz, the global specialty foundry leader. TowerJazz
manufactures integrated circuits, offering a broad range of customizable
process technologies including: SiGe, BiCMOS, Mixed-Signal/CMOS, RFCMOS,
CMOS Image Sensor, Power Management (BCD), and MEMS capabilities.
TowerJazz also provides a world-class design enablement platform that
enables a quick and accurate design cycle. In addition, TowerJazz
provides (TOPS) Technology Optimization Process Services to IDMs and
fabless companies that need to expand capacity. TowerJazz offers
multi-fab sourcing with two manufacturing facilities in Israel, one in
the U.S., and one in Japan. For more information, please visit www.towerjazz.com.
Safe Harbor Regarding Forward-Looking Statements
This press release includes forward-looking statements, which are
subject to risks and uncertainties. Actual results may vary from those
projected or implied by such forward-looking statements. A complete
discussion of risks and uncertainties that may affect the accuracy of
forward-looking statements included in this press release or which may
otherwise affect TowerJazz’s business is included under the heading
"Risk Factors" in Tower’s most recent filings on Forms 20-F, F-3, F-4
and 6-K, as were filed with the Securities and Exchange Commission (the
“SEC”) and the Israel Securities Authority and Jazz’s most recent
filings on Forms 10-K and 10-Q, as were filed with the SEC,
respectively. Tower and Jazz do not intend to update, and expressly
disclaim any obligation to update, the information contained in this
release.
Source: TowerJazz
TowerJazz Company Contact in Asia:
Shoko Saimiya,
81-795-23-6609
saimiya@towerjazz.com
or
Investor
Relations Contact
Noit Levi, +972-4-604-7066
noit.levi@towerjazz.com