Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM), which trades as TowerJazz, has won a new contract with its customer Vishay Siliconix, under which Tower will produce two Vishay Siliconix product families at its Fab 4 in Japan, as well as multiple Vishay Siliconix product families at its Fabs 1 and 2 in Migdal Ha'Emek.
Deliveries will begin in 2013 and continue through 2018, and the contract will generate hundreds millions of dollars in revenue for Tower over the five-year period. "Globes" recently reported that Tower was in talks with a potential customer in Asia for another large contract; today it was learned that the customer is Vishay Intertechnology Inc. (NYSE: VSH).
Tower stated, "The new collaboration in Japan will enable TowerJazz to have a steady baseline revenue with a long-term, strategic customer at the Japanese fab, in addition to multiple other IDM deals the company is currently engaged in."
Tower has a long-term relationship with Vishay Siliconix, one of its largest customers, for which it has produced several product families over the last eight years. During the past year, Tower and Vishay Siliconix established an epitaxial (epi) growth center in order to support Super Junction technology. The epi center has already begun production and is expected to be fully equipped at the beginning of 2013.
"We are extremely pleased to expand our strategic relationship with a very large volume, long-term customer such as Vishay Siliconix," said Tower president Dr. Itzhak Edrei. "With the expansion of our foundry agreements, utilizing three out of our four fabs, it is clear that we are able to provide a complete solution from both technology and capacity aspects to our customers, while also utilizing our unique capability of being an onsite development partner for advanced platforms. We expect to reach hundreds of millions of dollars of revenues out of this expanded agreement. In addition it is well aligned to augment the TowerJazz and Micron volume manufacturing agreement following the acquisition of the Japanese fab last year, which as can be seen is now being matured into new agreements that are based on the great advantages this fab can offer to our customers, amongst them geographical alignment and expanded capacity. We look forward to continued collaboration with Vishay Siliconix for years to come."
Published by Globes [online], Israel business news - www.globes-online.com - on September 3, 2012
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