Tower teams with Indian co in fab tender

Tower signed a binding MOU to build and operate a 300-mm facility in India.

Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) (which markets as TowerJazz) has signed a binding memorandum of understanding (MOU) with an Indian infrastructure conglomerate, to build and operate a 300-mm facility in India. The company did not disclose the name of its partner in the fab. It will not invest money in the project, but will provide the know-how.

Tower said the new fab would enable the company to develop 300-mm wafer size, 90-nm analog technology and companion chips in deep 65-45-nm submicron technologies.

Tower is partnering with the Indian company and an international technology provider against two other consortia in a government tender for the fab. The company says that it believes that it is in the best position to win the tender because its consortium is very strong and Tower has a strong reputation in India, after it previously built a fab following its win in government project. Tower nonetheless cautioned that there was no assurance that it will win the tender.

Tower chairman Amir Elstein said, "The recently signed India MOU is a tremendous opportunity for TowerJazz to utilize its manufacturing knowhow and technical expertise to gain a low cost entrance into an emerging market at a 300-mm wafer size level. Should this proposal not be accepted, we remain active in pursuing such models where we add benefit to our partners and customers through our expertise and execution and benefit to the shareholders through profitable upside growth."

Tower's share price fell 1.3% in morning trading on the TASE today to NIS 3.33, after rising 4.8% on Nasdaq yesterday to $0.88, giving a market cap of $277 million.

Published by Globes [online], Israel business news - www.globes-online.com - on February 16, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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