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Analyst Blog

TowerJazz Expands Agreement

Ken Nagy, CFA

On September 3, 2012, the Israel based TowerJazz (TSEM) global specialty foundry leader, announced that it expanded its business relationship with Vishay-Siliconix with a five-year agreement.

Under the terms of the agreement, TowerJazz will manufacture two Vishay Siliconix product families at TowerJazz's Japanese facility (Fab 4) as well as multiple Vishay Siliconix product families at TowerJazz's Fabs 1 and 2 in Migdal HaEmek, Israel.

The expanded agreement is expected to reach hundreds of millions of dollars in revenues and the Company is pleased with the expansion of the foundry agreements which will utilize three out of four of its four fabs.

Similarly, the contract with this long term customer, VishaySiliconix, enables TowerJazz to have steady baseline revenue with a long-term, strategic customer at the Japanese fab, as well as multiple other IDM deals the company is currently engaged in.

The long term relationship with Vishay and TowerJazz has produced multiple product families over the last eight years allowing TowerJazz to continue to enhance its strong collaboration with Vishay  which is  one of its largest customers.

It should be noted that over the past year, TowerJazz and Vishay Siliconix established an epitaxial (epi) growth center in order to support Super Junction technology with the epi center already beginning production and expected to be fully equipped at the beginning of 2013.
The Company is pleased with the expansion of the foundry agreements in which it will utilize three out of four of its four fabs and management looks forward to continued collaboration with Vishay Siliconix for years to come.

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