Tower Semiconductor and Alliance Semiconductor Announce $75 Million Strategic Investment Agreement
MIGDAL HAEMEK, Israel and SANTA CLARA, Calif.--(BUSINESS WIRE)-- Aug. 30, 2000--
Alliance to Join SanDisk as a Wafer Partner; Tower Expects to Sign
Additional Partners; New Fab Constrution Expected to Start This
Year
Tower Semiconductor Ltd. (NASDAQ: TSEM - news) and Alliance Semiconductor Corporation (NASDAQ: ALSC - news) announced today that they have entered into a definitive agreement under which Alliance will make a $75 million strategic investment in Tower as part of Tower's plan to build its new Fab.
In return for its investment, Alliance will receive equity, corresponding representation on Tower's Board of Directors and committed production capacity in the advanced fab which Tower intends to commence building this year.
Tower recently concluded a similar agreement with SanDisk Corporation (NASDAQ: SNDK - news). The Company has announced its intention to raise additional equity, mostly from other strategic partners in similar transactions.
In announcing the agreement, N.D. Reddy, Chairman, President and CEO of Alliance, said, ``We are very excited about entering into this partnership with Tower. This partnership will provide Alliance with access to Tower's unique microFLASH® technology for standard and embedded applications for the next generation of communication products at 0.18 to 0.13 micron technologies, as well as guaranteed wafer capacity.''
Dr. Yoav Nissan-Cohen, Tower's Co-Chief Executive Officer, said, ``I am pleased to announce that Alliance will now join SanDisk and Toshiba as an investor and partner in our new Fab. Alliance's position as a fabless, specializing in the memory and memory-intensive logic designs, is an excellent fit to our new fab strategy. In particular, I am thrilled to have the support of N.D Reddy, who is one of the leading executives of the fabless industry and brings to us rich experience in similar fab projects.'' Dr. Nissan-Cohen added, ``We expect that, within the coming weeks, the government grant will be approved and additional wafers partners will join the project, which will enable us to start the construction of the new Fab.''
About Tower's New Fab
Tower plans to use the investment, expected government grant, bank loans and its own cash toward constructing an advanced fab adjacent to its current facility in Migdal Ha'emek, Israel. The new fab, referred to as 'Fab 2', is planned to employ approximately 1,000 professionals and produce up to 33,000 200-mm wafers per month. Tower has already started recruiting employees for Fab 2 in Israel and abroad, and is preparing an extensive training program to bring the new recruits to the necessary skill level. Tower is planning to commence construction of the new Fab later this year. The agreement between Tower and Alliance follows the previously announced technology transfer agreement between Tower and Toshiba Corporation and the investment agreement between Tower and SanDisk Corporation.
Terms of the Tower-Aliiance Agreement:
Under the terms of the agreement, Alliance's investment will be made in several stages over an approximately 18 month period, against satisfactory completion of key milestones for the construction, equipping and commencement of production at the new wafer fab. Alliance will receive from Tower a guaranteed portion of the available wafer capacity at competitive pricing, with first production expected in 2002.
The closing of the transaction with Alliance is subject to several conditions, including the timely approval of a financial incentive package from the Israeli government, securing additional required financing from other wafer fab partners and banking and/or financial institutions, and timely commencement of fab construction.
biz.yahoo.com |
