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To: Lone Star who wrote (38140)	10/11/2000 4:05:41 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Israeli minister proposes $250 million grant for Tower's new fab Semiconductor Business News (10/11/00, 03:33:51 PM EDT) MIGDAL HAEMEK, Israel --Tower Semiconductor Ltd. today said a proposed $250 million grant from the Israeli government would be enough to continue its plans for a new 8-inch wafer fab at its headquarters here. For nearly two years, Tower has been seeking government assistance to help it build a second fab for wafer-processing foundry services. While waiting for a decision on government subsidies, Tower has struck partnerships for technology and funding with major silicon foundry customers. During the summer, Tower inked separate $75 million investment pacts with SanDisk Corp. of Sunnyvale, Calif., (see July 5 story), and Alliance Semiconductor Corp. of Santa Clara, Calif. (see Aug. 30 story). Tower also entered into technology and investment agreements with Toshiba Corp. of Japan (see March 28 story) as well as a major foundry pact with Macronix International Co. Ltd. of Taiwan, which also plans to cooperate in R&D for nonvolatile memories (see Aug. 14 story). "Approval of the grant was a condition to the closing of our agreements with our strategic partners, Toshiba, SanDisk and Alliance," said Yoav Nissan-Cohen, Co-CEO of Tower. "Our focus now is on finalizing the agreements with additional strategic partners and investors to complete the project financing." On Tuesday, the Israeli finance minister Avraham Shochat announced he was recommending a 20% government grant for the planned $1.25 billion fab. In making the announcement, the Israeli finance minister said a series of meetings had determined the new fab would help the country's economy. Tower has been planning to start construction on Fab 2 for a number of months. The 8-inch wafer-processing facility will be located adjacent to the company's existing 6-inch fab. Fab 2 will employ approximately 1,000 workers and produce up to 33,000 eight-inch (200-mm) wafers. While waiting for the Israeli grant decision, local industry officials debated whether it was fair for Intel Corp. to receive higher levels of funding for its wafer fab in Kiryat Gat. The government had approved a 38% grant, totaling $608 million, for Intel's second Israeli fab. Some local officials worried that the Intel grant had put too many eggs in one basket and lowered available funds to 20% of assets (see feature story from January 1999).