Tower lines up Fab2 expansion funds

July 16, 2007 – Israeli foundry Tower Semiconductor Ltd. says it has closed funding commitments totaling $100 million from lender banks and major shareholder Israel Corp., with which it is “exploring unique tool acquisition opportunities” that would boost capacity at its Fab 2 200mm site, primarily for 0.13-micron and below process technologies, “in a cost-effective manner.”

Tower’s Fab2 is currently running at >90% utilization of its 24,000 wafers/month capacity, and these new opportunities “would significantly increase our sales, cash flow, and operational results, with a fast pay-back-period and a high ROI,” said Russell Ellwanger, Tower’s CEO, in a statement. Local media reports had earlier suggested capacity would be hiked up to 35,000 wafers/month.

The new funds include $40 million in long-term loans from a pair of lender banks, Bank Leumi and Bank Hapoalim, and $60 million in credit lines from Israel Corp. The agreements, currently signed letters-of-intent, are still subject to signing and closing of definitive agreements and corporal approvals, the company notes.

Previous local reports suggested Tower was seeking to purchase $80 million worth of used 200mm equipment from AMD, which is clearing out its fab in Dresden, Germany, for a 300mm upgrade.


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