September 10, 2007 – Israeli foundry Tower Semiconductor Ltd. says it has closed funding commitments totaling $100 million to expand its 200mm Fab 2 facility.

The credit lines include about $30 million from lender banks Bank Leumi and Bank Hapoalim, and $30 million in credit lines from Israel Corp. Tower will add these funds to the $40 million it raised in June through issuance of long-term bonds.

The expansion project aims to “significantly” increase capacity at the foundry’s Fab 2 200mm site, which is currently running at >90% utilization of its 24,000 wafers/month capacity. Tower’s earlier announcement said it was “exploring unique tool acquisition opportunities” for the expansion “in a cost-effective manner”, primarily for 0.13-micron and below process technologies.

There is no official timeline for the Fab 2 expansion, a Tower representative told SST, but he said it should be finished “during 2008 for sure,” noting that it will be staged incrementally in order to address “the narrowest points” in current fab capacity bottlenecks.

In a statement, CEO Russell Ellwanger indicated the company has indeed ordered some of the manufacturing tools and is “in the final stages of negotiation with several equipment suppliers” for the complete toolset, predominantly originating from certain IDMs’ 200mm sites, including AMD and Intel. Tooling is expected to begin in the next month and span several quarters, he added.

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.