TowerJazz Acquires Maxim Wafer Fab in Texas

TowerJazz has signed an agreement with Maxim Integrated Products, Inc. to purchase Maxim's 8-inch fabrication facility in San Antonio, Texas, United States. The proposed purchase will expand TowerJazz's current worldwide manufacturing capacity, cost-effectively increasing production by approximately 28,000 wafers per month. The availability of additional capacity is expected to be needed to serve TowerJazz's current and forecasted robust customer demand. TowerJazz and Maxim expect to close the transaction in January 2016, subject to customary closing conditions.

As part of the transaction, the companies have also signed a long-term supply agreement for TowerJazz to manufacture products for Maxim in the San Antonio facility. The transaction is to be paid with TSEM ordinary shares with a total value of approximately 40 million US dollars.

All of the site’s nearly 500 employees will be retained. The headcount consists of production operators, highly experienced production support personnel and process and integration engineers, the majority of which possess graduate degrees.

The facility can support the advanced analog platforms using geometries down to 130nm and can be used also to manufacture third party products using TowerJazz specialty process technologies. TowerJazz plans to quickly qualify its core specialty technologies, including its advanced Radio-Frequency Silicon-on-Insulator (RF-SOI) offering, to serve the substantial growth in demand from its customers.

“We are very excited about this fab purchase. It will provide a quick solution for our significantly growing customer demand, while gaining additional high quality manufacturing capabilities and global flexibility with the incremental capacity,” said Dr. Itzhak Edrei, TowerJazz’s President. “The multi-year supply agreement with Maxim and the new available capacity will enable continuous growth with increased manufacturing scale to support our position as the worldwide leading specialty analog foundry.”

“We know Maxim very well, having been their supplier for a family of high-end SiGe based products for many years. During this period we have developed an appreciation for Maxim’s technical capabilities, business vision and corporate culture. Above all, we built a strong relationship of mutual trust and respect,” said Russell Ellwanger, TowerJazz’s Chief Executive Officer. “The San Antonio factory enables us to further strengthen our relationship with Maxim, in a true win-win business model enabling TowerJazz incremental capacity supported by a proven high performing technical and operational team.”

“We needed a trusted partner to manage our proprietary process technology who also shared our commitment to the employees in San Antonio. Tower Jazz has a proven track record with Maxim and similar beliefs about employees, so this is a natural fit. I look forward to our continued partnership over the coming years,” said Vivek Jain, Senior Vice President of Maxim Integrated’s Technology and Manufacturing Group. “With this arrangement, we will continue to support our customers for years to come, improve utilization in our Oregon fab, and advance our manufacturing flexibility.”