Tower jumps after signing largest ever deal

The multiyear deal with Intersil could be worth $500 million.

Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) has signed a memorandum of understanding (MOU) with Intersil Corporation (Nasdaq: ISIL) to jointly develop a new high-performance power management specialty process technology platform. Market sources estimate multiyear deal could be worth $50 million a year to Tower, and reach a total of $500 million.

The companies will combine Tower's Bipolar-CMOS-DMOS (BCD) power process technology with Intersil's design and process technology to create a platform that Intersil will use to manufacture its integrated circuits at Tower's Fab 2 200mm facility in Migdal Ha’emek.

Tower cites a study by Gartner Group, which predicts that power management devices will continue to be the fastest growth segment of any analog integrated circuit category through 2012. Tower also cites a study by iSuppli, which predicts that market will grow by over 9% a year from $10.3 billion in 2009 to $14.6 Billion in 2013.

Intersil is a customer of Tower subsidiary Jazz Semiconductor Inc.

Tower CEO Russell Ellwanger said, "Intersil offers quality, high-performance analog ICs and we are excited that a proven leader in power management has chosen us as their partner and placed their trust in our technology and roadmap to co-develop and manufacture their next-generation power platform. Together, we will enable faster design cycles and cost-effective designs which will be very advantageous for Intersil’s customers. We look forward to a fruitful and long-term relationship."

This is Tower's third major announcement so far this month. It follows a deal with South Korea's Dongwoon Anatech Co. Ltd. to be the sole manufacturing partner for high-volume, energy-saving LEDs for households and industry, and a collaboration with Medigus Ltd. (TASE:MDGS) in which Tower developed a CMOS imager that Medigus will use in its disposable miniature cameras.

Tower's share rose 20% yesterday on Nasdaq, a day after the company published its financial report for the second quarter, to $1.18, giving a market cap of $188 million. The share rose 13.8% in morning trading on the TASE today to NIS 4.79.

Published by Globes [online], Israel business news - - on August 13, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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