Tower continues string of successes in Korea

Its sales in Korea are expected to rise to tens of millions of dollars a year by 2012.

Migdal Ha'Emek-based specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) recently announced new contracts during the working visit to South Korea by CEO Russell Ellwanger. Sources inform ''Globes'' that Tower has also signed three additional contracts that have not yet been disclosed. The company will officially announce one of them shortly, but not the other two because the customers wish to keep the details confidential.

A few months ago, Tower appointed Michael Song as Korea country manager. The company has since achieved a foothold in the market, signing several large contracts, such as the one with Dongwoon Anatech Ltd., whose clients include Samsung Electronics Co. Ltd. (KRX: 005930) and Sony Corporation (NYSE: SNE; TSE:6758), while Tower subsidiary Jazz Semiconductor Inc. signed a deal with fabless analog semiconductor Cesign Inc. Last week, the company announced a contract with Taejin Technology Co. Ltd.

The size of the new contacts is hard to estimate at this time, but the sources expect Tower's sales in Korea to rise to tens of millions of dollars a year by 2012, from $2 million in 2008. This will turn Korea into Tower's second largest market, in terms of sales, after the US, which currently accounts for 70% of sales. Tower seems to be pleased by its Korean achievements; the sources added that the company plans to appoint 3-5 more sales managers there to further deepen its presence.

While it is difficult to assess the size of the contracts, market sources believe that Tower must report any contract larger than $15 million. This implies that the contracts that will not be announced are worth less than this amount.

Tower's share rose 4.3% on Nasdaq yesterday to $0.98. The share rose 4.1% at the opening on the TASE to NIS 3.75.

Published by Globes [online], Israel business news - - on September 8, 2009

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

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