Comverse plunges after disappointing results
Tower plans to invest tens of millions of dollars in TowerJazz Japan.
Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) subsidiary TowerJazz Japan Ltd. will receive a capital expenditure subsidy from Japan's Ministry of Economy, Trade and Industry (METI). The subsidy program aims to improve the logistics and facilities of companies' business locations and encourage new investment to maintain and create jobs by providing subsidies to production sites.
TowerJazz Japan is based on Tower's acquisition of Micron Technology Inc's (NYSE: MU) fab in Nishiwaki in June 2011.
TowerJazz Japan was one of 294 companies that were selected for the program's $2.5 billion budget. METI provides up to one third of a company's capital expenditures and related investment for power and other products. Tower said that it plans to invest tens of millions of dollars in the next two years in its Nishiwaki fab to boost production and qualify its specialized power platform and other technologies to provide local sourcing in Japan and multi-fab sourcing for its customers worldwide.
The subsidy will enable TowerJazz Japan to accelerate its transition from an IDM DRAM fab to an analog specialty foundry and expand collaboration opportunities with customers in Japan. The funding will assist the company in installing specialized technologies and provide assistance with equipment and infrastructure for further business development.
Tower CEO Russell Ellwanger said, "Having been selected as a recipient of the subsidy gives us great assurance that the Japanese government sees the inherent high value of our foundry offerings to support business development nationally. TowerJazz is committed to the Japanese market by providing TowerJazz Japan with our advanced specialized capabilities and working closely with our local customers to respond to both their short and long term needs."
TowerJazz Japan managing director Kenichi Katsumoto said, "Developing local pure play foundry capability is extremely important for the Japanese semiconductor industry. We are very pleased that the government understands the important role we have and chose to partner with us as the first large scale pure play foundry in Japan.
Tower's share price opens at $0.81 on Nasdaq today, giving a market cap of $255 million, after rising 8% on the TASE to NIS 3.26.
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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