Israel-based global specialty foundry leader,
Tower Semiconductor Ltd.
), recently announced a joint venture (JV) with
) to manufacture Panasonic's products.
Panasonic Corporation is a Japanese consumer electronics
vendor which develops electronic technologies and solutions for
customers in residential, non-residential, mobility and personal
Per the agreement, Tower's Japanese unit, TowerJazz, will
manufacture chips for Panasonic using the latter's three-chip
fabs in Japan. The fabs are located in the northwest of Japan's
main island, Honshu. Panasonic will transfer its semiconductor
manufacturing processes, capacity and tools of 8 inch and 12 inch
to the JV.
Additionally, Panasonic has committed to buy chips made by the
JV for a period of at least five years, forging a long-term
partnership between the two companies. The JV will also have the
option to expand operations in the fabs.
Per the terms, TowerJazz will hold 51% of the joint venture
and Panasonic will keep the remaining 49%. This will make
Panasonic a minority stakeholder in TowerJazz and the company's
Management stated that it will rationalize its Japanese
business, which may include fab consolidations between
Panasonic's factories and the other plant in Japan that TowerJazz
Micron Technologies Inc
In a bid to reduce its loss-making operations, Panasonic has
been paring back unprofitable operations, including TVs and
smartphones. The company is also in negotiations with an
unidentified buyer over the divestment of five other chip plants
in Indonesia, Malaysia and Singapore.
The agreement is expected to boost TowerJazz's revenues and
reach its target of $1 billion a year in revenues by 2015. The
company now expects to post revenues of at least $225 million in
the second quarter of 2014, up from $133 million in the year-ago
Tower Semiconductor manufactures semiconductors using its
advanced production processes. In the last concluded third
quarter, the company's earnings of 21 cents missed the Zacks
Consensus Estimate by 27 cents. However, revenues of $132.6
million were up 6% sequentially and 18% year over year.
Currently, Tower has a Zacks Rank #3 (Hold). Other stocks that
have been performing well and are worth considering include
Advanced Photonix Inc.
Cabot Microelectronics Corporation
(CCMP). All these stocks carry a Zacks Rank #2 (Buy).
AMKOR TECH INC (AMKR): Get Free Report
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PANASONIC CORP (PCRFY): Get Free Report
TOWER SEMICOND (TSEM): Get Free Report
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