February 13, 2014 / 12:45 PM / 4 years ago

TowerJazz shares jump on report of Indian plant approval

JERUSALEM, Feb 13 (Reuters) - Shares of Israeli chip maker TowerJazz rose nearly 5 percent on Thursday on a report that India’s cabinet approved the setting up of two semiconductor plants.

“We will now prepare a letter of intent to participants,” J Satyanarayana, the secretary of the Department of Electronics and Information Technology, told India’s PTI.

TowerJazz is part of one of two consortia that have proposed building semiconductor plants in India. Its consortium includes India’s Jaiprakash Associates and IBM . The group has proposed a plant near New Delhi at a cost of about $4 billion.

In September, the cabinet had given in-principle approval to the projects and asked the groups to submit within two months their detailed reports, including the production mix and marketing plans.

The technology providers must take at least a 10 percent stake in the projects, while the Indian government would get an 11 percent stake in each project. The government would part-fund the investments through interest-free loans for 10 years.

TowerJazz makes chips used in smartphones like Apple’s iPhone and Samsung’s Galaxy models as well as battery chargers and AC/DC adapters. Its shares were 4.9 percent in afternoon trading in Tel Aviv.

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