* Panasonic to transfer three plants to joint venture
* TowerJazz to close Nishiwaki plant, cut annual fixed costs
by $130 mln
* TowerJazz shares up 4.6 pct in Tel Aviv
(Adds comments from TowerJazz CEO, chairman, details)
TEL AVIV, April 1 Israeli chipmaker TowerJazz
on Tuesday kicked off its joint venture with Panasonic
Corp, which it expects will increase its revenue by
$400 million a year.
TowerJazz holds 51 percent of the joint venture,
which will manufacture Panasonic's semiconductors for cars and
Panasonic, which is wrapping up a multi-billion-dollar
restructuring, will transfer three factories in central Japan to
the joint venture and is committed to acquiring its products
from the joint venture for at least five years.
TowerJazz said it will close its plant in Nishiwaki that it
bought from Micron Technology in 2011, reducing its
annual fixed costs by $130 million. It will keep on about 100 of
the 800 employees at the plant and has retained a Japanese
outplacement firm to help find employment for the remaining
workers, Chief Executive Russell Ellwanger told Reuters.
He said the loss-making company is targeting net profit
under generally accepted accounting practices (GAAP) by the
fourth quarter of 2014. Its net loss in the fourth quarter of
2013 reached $29.8 million.
Shares in TowerJazz, a maker of chips for smartphones,
battery chargers and AC/DC adapters, were up 4.6 percent to
32.33 shekels in late morning trade in Tel Aviv.
"We have already brought multiple customers into the joint
venture and this is all incremental business for TowerJazz,"
The joint venture will enable TowerJazz to achieve annual
revenue of $1 billion by 2015, Ellwanger said.
"This is a real break-through opportunity for TowerJazz. The
company going forward will not be as we saw it before; we have
the opportunity for a different scale," Chairman Amir Elstein
TowerJazz issued to Panasonic 870,454 shares worth about
$7.5 million, giving Panasonic a 1.8 percent stake in TowerJazz.
($1 = 3.48 shekels)
(Reporting by Tova Cohen; Editing by Steven Scheer)