To: Zeev Hed who wrote (14480 ) 9/4/2000 1:23:51 PM From: thecalculator Respond to from the same piece: Guess who takes on the risk during a downturn of operating a $1 B fab at less than full capacity? TSEM, of course. And the problem I cited is the timing, the fab will open, unfortunately, in the middle of the next "downturn". We basically view our investment in Tower at 10% equity for a $75 million investment, very similar to the way we see our previous investment in the UMC joint venture, which we made around 4 years ago. We invested $51 million for a 10% equity stake at USIC foundry; we also received at the time the same one board seat...and 4 years later UMC has bought us out and that investment now is worth around $500 million..10x...and of course we have the guaranteed wafer capacity, so we are very very pleased with it.We think that with the projected dramatic growth and demand that we see and other people see in the market for the next 5-10 years that the foundry business is going to be a very very good business to be in. Let me just say we have customers in Europe primarily that would like SanDisk at least to not have all of our production in Taiwan. We've taken a first step with Toshiba in Virginia and we think that there is a real requirement for a good foundry supplier with a good technology in Europe and today that is a void that I think is a very significant opportunity for Tower.
