Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM), which markets its products as TowerJazz, has signed an agreement with Maxim Integrated Products, Inc. (NASDAQ:MXIM) to purchase Maxim’s 8-inch fabrication facility in San Antonio, Texas for $40 million.
The purchase will expand TowerJazz’s worldwide manufacturing capacity, cost-effectively by 28,000 wafers per month. The availability of additional capacity will serve TowerJazz’s forecasted robust customer demand. TowerJazz and Maxim expect to close the transaction in January 2016.
As part of the transaction, the companies have also signed a long-term supply agreement for TowerJazz to manufacture products for Maxim in the San Antonio facility. The transaction is to be paid with TSEM ordinary shares worth about $40 million.
All of the site’s nearly 500 employees including production operators, production support personnel and process and integration engineers will be retained. The facility can support the advanced analog platforms using geometries down to 130nm and can be used also to manufacture third party products using TowerJazz specialty process technologies. TowerJazz plans to quickly qualify its core specialty technologies, including its advanced Radio-Frequency Silicon-on-Insulator (RF-SOI) offering, to serve the substantial growth in demand from its customers.
Tower president Dr. Itzhak Edrei said “This fab will provide a quick solution for our significantly growing customer demand, while gaining additional high quality manufacturing capabilities and global flexibility with the incremental capacity. The multi-year supply agreement with Maxim and the new available capacity will enable continuous growth with increased manufacturing scale to support our position as the worldwide leading specialty analog foundry.”
Tower CEO Russell Ellwanger said, “We know Maxim very well, having been their supplier for a family of high-end SiGe based products for many years. During this period we have developed an appreciation for Maxim’s technical capabilities, business vision and corporate culture. Above all, we built a strong relationship of mutual trust and respect."
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2015
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