(The following was issued by Israel's TowerJazz (TSEM.O)
June 5 - TowerJazz, the global specialty foundry leader,
announced today that it completed its previously announced
acquisition of Micron Technology's fabrication facility in
Nishiwaki City, Hyogo, Japan.
The acquisition nearly doubles TowerJazz's current internal
manufacturing capacity, cost-effectively increasing production
by 60,000 wafers per month.
The added capacity to serve the growing needs 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 target by 2014.
This acquisition provides TowerJazz with operational
facilities that span the globe with two fabs in Israel, one fab
in the United States, additional capacity available in China
through manufacturing partnerships, and the newly acquired fab
As a result, this acquisition enhances the company's
geographic reach and distribution capabilities which TowerJazz
believes will create a significant opportunity for revenue
enhancement and increased efficiencies in manufacturing.
The total value of the transaction, including assumption of
liabilities, is approximately $140 million, of which $40 million
was paid in cash, approximately 19.7 million Tower ordinary
shares and the remainder reflects assumed long-term retirement
liabilities that are payable incrementally upon employee
In addition, under a "take-or-pay" supply agreement between
the companies, TowerJazz will manufacture products for Micron in
the Japan facility for at least the next three years with
processing technology licensed from Micron.
"We are excited about the potential of this acquisition and
believe this is an opportunity for us to bring our analog
specialty leadership to the next level. This acquisition is an
excellent strategic fit for TowerJazz; it sends a clear message
to our customers that we are positioned to meet their growing
needs," said Russell Ellwanger, TowerJazz chief executive
"This latest addition of substantial capacity and a well
experienced and highly talented technical work force, along with
the dedication of our worldwide management and employees will
further increase TowerJazz's ability to support our customers'
success now and for years to come."
"The acquisition of a high volume manufacturing facility in
Japan was not an opportunistic event, but rather a board
approved strategy that the management aggressively pursued and
executed upon," said Amir Elstein, chairman of the TowerJazz
board of directors. "I have personally met with the management
of the Nishiwaki facility and am most positive that the employee
talent and large factory capacity will be seamlessly
incorporated into TowerJazz's global specialty foundry growth
and performance leadership."
The facility can support geometries down to 95nm and can
also be used to manufacture other products using TowerJazz
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. Increased
manufacturing scale and expanded addressable market further
supports TowerJazz's position as the number one specialty
For this deal, TowerJazz was represented by Yigal Arnon & Co
and DLA Piper Japan. Micron was represented by Wilson Sonsini
and Nagashima Ohno & Tsunematsu Japan.