Tower signs Korea chip deal

The chip provides AC to DC conversion for next generation industrial LED lighting and large panel consumer LCDs.

One week after "Globes" reported that independent foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) had signed several deals in Korea - only one of which will be announced - Tower reported that it will jointly develop a 700V power platform with Korean chip design firm GrandTek, and that Korean fabless chip developer SemiHow had already signed on as an early adopter to use Tower’s 700V power platform for AC to DC conversion targeting the industrial LED lighting market.

Tower said it expects to realize product revenue from SemiHow in the second quarter of 2010.

According to market sources, revenue will begin in 2011 at $10 million per year, and reach $30 million per yea as of 2013.

The collaboration will combine GrandTek’s 700V technology capability with Tower’s advanced power management process and leading design kits.

The 700V high voltage market consists of AC to DC conversion for next generation industrial LED lighting and large panel consumer LCDs. According to DisplayBank Co, the market for industrial LED lighting is estimated to grow from $700 million to $2 billion in 2013, a compound annual growth rate of 45%. The high-voltage platform is considered ideal for large-sized blue LEDs for large panel LCDs.

GrandTek president Hojin Lee said, "We needed a strong technical foundry partner and we are confident Tower will enable us to meet our requirements for performance, die size and superior quality. With Tower, we have the best opportunity to achieve rapid design success."

Tower vice president and GM specialty business unit Dr. Avi Strum said, "In another 10 years all lighting at home and on the street will be LED lighting. The problem is that they work on low DC current and therefore the high voltage in the home has to be converted to DC. It's expensive, but our solution is cheap a chip that sits on the bulb and converts it. In the future, every LED bulb will contain a chip like that."

Tower reportedly signed three deals in Korea recently, but will only report one of them, since the customers in the other two deals reqeuested that Tower not report the deal. Tower has to report any deal over $15 million, so apparently each of the other two deals is worth less than that amount.

Tower shares closed at $0.9301 on Monday, giving a market cap of $148.85 million. On the Tel Aviv Stock Exchange (TASE), Tower shares fell 0.35%. For the year, Tower's TASE-traded shares are up 634%.

Published by Globes [online], Israel business news - - on September 15, 2009

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

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