Tower Semiconductors, the chip producer from Migdal Ha’emek, is looking into the possibility of setting up an additional plant, but in Europe, not Israel, Tower joint general manager Rafi Levin told "Globes" today. He said the possibility is being examined of coming into an existing chip production line in Europe, or of partnership with a large company that is in the process of setting up such a production line.
Tower Semiconductors produces silicon chips for the electronics industry. In 1997, its sales totalled $125 million, and it had a profit of $20 million.
Tower’s original plan was to set up a second fab in Israel, and it submitted a plan for doing so to the Investment Centre which would have cost $1,500 million. However, the company says it does not now know what the government’s policy will be, and whether the Investment Centre plans to recommend setting up the plant.
In the context of the discussions held on the matter, Minister of Finance Ya'akov Ne'eman visited the plant in Migdal Ha’emek a week and a half ago, and said this was the kind of investment he wanted to see in Israel.
However, Tower says that now, besides the issue of government assistance, another problem has arisen. Levin: "In a project on this scale we have to have a technological partner, one of the giants in the market. We are talking to several of them, but most are not prepared to talk to us about Israel. Perhaps this isn’t understood in Israel, but people are now afraid to invest such sums here."
It should be pointed out that there is competition between several European countries keen to attract chip producing plants and high-tech industry. In general, this applies to the economically less developed regions of Western Europe, which can offer assistance and a cheap but educated workforce.
The main regions competing over these industries are in the former East Germany, Belgium, Wales, Ireland, and Scotland. Among companies negotiating with these countries are major manufacturers like Motorola, Siemens, Hitachi, Toshiba, and Texas Instruments. Tower is in contact with some of these companies.
Published by Israel's Business Arena February 24, 1998