TowerJazz, the global specialty foundry, announced the signing of a definitive agreement with Semiconductor Laboratory, an Asian Governmental Agency. Under the agreement, TowerJazz will leverage its manufacturing expertise and assets while providing during the coming three years the required process engineering and equipment maintenance support for successful operation of the facility. In addition, TowerJazz will provide support to help establish wafer reclaim capabilities and will provide training and procedures on the establishment of chemical lab capabilities.

The deal will generate revenues of approximately $35 million, which are incremental to TowerJazz’s revenues from its existing manufacturing facilities. This agreement allows TowerJazz to realize profits and cash generation from its valuable manufacturing expertise and its skilled engineering manpower.

“This project represents another notable acknowledgement of our worldwide manufacturing expertise and capabilities,” said Mr. Russell Ellwanger, CEO of TowerJazz. “It is a special business model providing revenue and profit upside incremental to our base financial model.”

TowerJazz operates two manufacturing facilities in Israel (150mm and 200mm), one in the U.S. (200mm) and three additional facilities in Japan (two 200mm and one 300mm) through TowerJazz Panasonic Semiconductor Co. (TPSCo), established with Panasonic Corporation of which TowerJazz has the majority holding.