April 5, 2011 – BUSINESS WIRE — TowerJazz, global specialty foundry, signed a non-binding term sheet contemplating its purchase of Micron Technology’s semiconductor wafer fabrication facility in Nishiwaki City, Hyogo, Japan. The proposed purchase would nearly double TowerJazz’s current internal manufacturing capacity, cost-effectively increasing production by 60,000 wafers per month.
The availability of additional capacity needed to serve the growing demands of its expanding blue chip customer base, combined with the additional business potential in Japan, is expected to help position TowerJazz to achieve its expressed $1 billion annual revenue run rate by 2014.
As part of the proposed acquisition, the companies anticipate that they will sign a supply agreement for TowerJazz to manufacture products for Micron in the Japan facility for approximately the next three years. The facility can support geometries down to 95nm and can also be used to manufacture other products using TowerJazz process technologies. TowerJazz plans to quickly qualify its core power management platforms to serve the substantial growth demand from its Korean customers and then build high-end RF capabilities.
The total value of the proposed transaction, including assumed liabilities, is anticipated to approximate $140 million, of which $40 million would be paid in cash; approximately 20 million of Tower ordinary shares would be issued to Micron Technology or its Japanese subsidiary; the remainder is assumed long-term retirement liabilities that would be payable incrementally upon employee retirements. The parties are currently negotiating definitive agreements for the proposed transaction.
"I’ve had many detailed interactions with the Micron R&D and operational groups when I held a position with a semiconductor equipment manufacturer," said Russell Ellwanger, TowerJazz CEO. "Micron’s culture of innovation, efficiency and absolute integrity is best-in-class, and I am confident that the acquisition of an operation that has grown through the Micron culture will be greatly accretive to TowerJazz. We are excited with the opportunity to enter into a multi-year supply agreement with Micron and see this as the first step in a long-term partnership. The acquisition of a fab in Japan would be a strategic move by TowerJazz to enter the Japanese market and strengthen our presence in the Asia-Pacific region through local, high-quality manufacturing capabilities and, in addition, would provide us with needed, large scale incremental capacity."
Micron Technology Inc. provides advanced semiconductor solutions, including DRAM, NAND and NOR flash memory, as well as other innovative memory technologies, packaging solutions and semiconductor systems for use in leading-edge computing, consumer, networking, embedded and mobile products. Micron’s common stock is traded on the NASDAQ under the MU symbol. To learn more about Micron Technology, Inc., visit www.micron.com.
Tower Semiconductor Ltd. (NASDAQ: TSEM) (TASE: TSEM) is a global specialty foundry leader with a fully owned U.S. subsidiary Jazz Semiconductor, operating collectively under the brand name TowerJazz. The company manufactures integrated circuits with geometries ranging from 1.0 to 0.13-micron, provides design enablement tools to allow complex designs to be achieved quickly and more accurately and offers a broad range of customizable process technologies including SiGe, BiCMOS, Mixed-Signal and RFCMOS, CMOS Image Sensor, Power Management (BCD), and Non-Volatile Memory (NVM) as well as MEMS capabilities. For more information, please visit www.towerjazz.com.