TowerJazz, the global specialty foundry leader, announced that it completed its previously announced acquisition of an 8-inch wafer fabrication facility in San Antonio, Texas, from Maxim Integrated Products, Inc. This acquisition will expand TowerJazz's current worldwide manufacturing capacity, cost-effectively increasing its production by about 28,000 wafers per month. The availability of capacity is needed to serve the Company's current and forecasted robust customer demand.
As part of the transaction, the companies signed a long-term supply agreement of 15 years, under which TowerJazz will manufacture products for Maxim in the San Antonio facility, in quantities which will allow for a gradual ramp of third party products. As previously announced, Maxim received as consideration $40 million paid with approximately 3.3 million ordinary shares of TSEM, representing approximately 3 percent of the company's fully diluted share count. This was calculated based on the average closing price of TSEM in NASDAQ during the last 15 trading days.
Russell Ellwanger, TowerJazz chief executive officer, commented, "We already performed first qualifications of our high demand and high volume flows, with Maxim's approval, confirming the outstanding engineering and manufacturing capabilities of the San Antonio fab personnel. We are now excited to have San Antonio staff and geography join us; they are a great addition to the TowerJazz family. We look forward to continuing to drive customer success and company growth through committed performance and execution."
"We needed a trusted partner to manage our proprietary process technology who also shared our commitment to the employees in San Antonio. TowerJazz 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 ourOregon fab, and advance our manufacturing flexibility."
Save the date: TowerJazz to host Investor and Analyst day on March 8, 2016 in San Antonio, Texas. Additional information will be provided shortly. For more information, please visit www.towerjazz.com or www.tpsemico.com.