Tower Q3 profit boosted by Intel deal cancelation

Russell Ellwanger
Russell Ellwanger

Tower CEO Russell Ellwanger: During this challenging time in Israel we have not missed a single customer commit.

Migdal Ha'Emek-based chipmaker Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE:TSEM) beat the analysts on profit in its third quarter 2023 financial results. CEO Russell Ellwanger said that the company's activities have not been hurt by the war. He said, "During this challenging time in Israel we have not missed a single customer commit, with strong activities in place to continue seamless operations. Thank you to all our employees worldwide."

Ellwanger, who has been living in Israel for 17 years, spoke at length about the current situation. "October 7th was an act of pure evil. A direct and purposed attack on civilians by Hamas, using the tools of murder, rape, and mutilation; the same tools used by Putin in Ukraine and that have been employed by other depraved despots throughout history. In this present instance under a Hamas leadership who live the life of millionaires, harbored, and shielded safely in foreign nations, caring nothing for any God given human values, no value for life at all, certainly not for Israelis but also not for their own people who they use as pawns."

He added, "Since this time, I have been extremely moved by the outpouring of warm thoughts and prayers for Tower and our employees in Israel by many customers, shareholders, suppliers and as well from employees in other geographic regions. A special thank you to a customer who accompanied this well-wishing with a sizable donation towards the extra support Tower is providing for our employees where either the employee them self or the employee’s spouse is serving their country to defend the principles they believe in, similar to the support Tower has offered to our employees in Ukraine. Thank you all!

"My heartfelt thanks to our employees worldwide and specific at this time to our employees in Israel - to those sacrificing comfort, and possibly life, to serve their country; and to those in the factories, Jewish, Moslem, Druze and Christian taking additional burdens on themselves, having enabled that we have not missed a single customer commit, and doing all in their power to ensure that we will not miss any in the future.

"We have robust business continuity procedures in place in the company including multi-site qualification of major process flows and very strong, external expert advised and audited, IT safeguards. I have always appreciated and valued Tower’s corporate culture. In times such as these one of the few upsides in positive emotion is seeing the unswerving dedication of our employees and the loyal support of our customers, shareholders, and suppliers. Thank you!"

Revenue fell 16% in the quarter

Meanwhile, in the third quarter of 2023, which ended before the outbreak of the war, Tower reported revenue of $358 million, down 16% from the corresponding quarter of 2022. Adjusted net profit was $60.5 million, with earnings per share of $0.54 higher than analysts' expectations. Overall net profit for the third quarter of 2023 was $342 million, or $3.10 basic and $3.07 diluted earnings per share, and included $290 million, net due to the payment by Intel of merger contract termination fees for cancelation of its acquisition of the company.

Tower Semiconductor sees $350-360 million revenue in the fourth quarter.

Tower's share price is up 1.06% in premarket trading after rising 3.87% yesterday to $25.48, giving a market cap of $2.815 billion.

Intel had agreed to acquire Tower last year for $5.4 billion but after regulatory delays the deal was canceled in August. Since then Tower has signed an agreement to expand its production by using Intel's plant in New Mexico.

Published by Globes, Israel business news - - on November 14, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Russell Ellwanger
Russell Ellwanger
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