TowerJazz Expands Agreement
Ken Nagy, CFA
TOWER SEMICOND (TSEM): Free Stock Analysis
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On September 3, 2012, the Israel based
global specialty foundry leader, announced that it expanded its
business relationship with Vishay-Siliconix with a five-year
Under the terms of the agreement, TowerJazz will manufacture two
Vishay Siliconix product families at TowerJazz's Japanese facility
(Fab 4) as well as multiple Vishay Siliconix product families at
TowerJazz's Fabs 1 and 2 in Migdal HaEmek, Israel.
The expanded agreement is expected to reach hundreds of millions of
dollars in revenues and the Company is pleased with the expansion
of the foundry agreements which will utilize three out of four of
its four fabs.
Similarly, the contract with this long term customer,
VishaySiliconix, enables TowerJazz to have steady baseline revenue
with a long-term, strategic customer at the Japanese fab, as well
as multiple other IDM deals the company is currently engaged in.
The long term relationship with Vishay and TowerJazz has produced
multiple product families over the last eight years allowing
TowerJazz to continue to enhance its strong collaboration with
Vishay which is one of its largest customers.
It should be noted that over the past year, TowerJazz and Vishay
Siliconix established an epitaxial (epi) growth center in order to
support Super Junction technology with the epi center already
beginning production and expected to be fully equipped at the
beginning of 2013.
The Company is pleased with the expansion of the foundry agreements
in which it will utilize three out of four of its four fabs and
management looks forward to continued collaboration with Vishay
Siliconix for years to come.