TowerJazz and Panasonic form fab jv

TowerJazz and Panasonic have formed a jv in which TowerJazz has a 51% share and which will own three Panasonic fabs in Japan.

The jv is called TowerJazz Panasonic Semiconductor.

The deal is expected to increase TowerJazz revenue by $400million a year, delivering a $900 million annual run rate starting Q2 2014.

The three fabs have capacity of approximately 800,000 wafers per year (8 inch equivalent).

Panasonic is committed to acquire its products from the jv for at least 5 years of volume production.

One of the fabs is a 300 mm fab running 65nm CMOS image sensors which can aldo run 45 nm digital processes.

The fabs are at Uozu, Tonami and Arai. TowerJazz is thinking about consolidatiing its existing Nishiwaki fab with the three jv fabs. This means TowerJazz is evaluating potential partners for the Nishiwaki fab.

The jv will continue the production of Panasonic’s semiconductor processes as Panasonic’s subcontractor as well as seek to expand operations by leveraging TowerJazz’s customers and businesses to capture out-of-group sales.

The jv is expected to increase TowerJazz’s technology offerings by providing multiple additional specialty flows, including Panasonic’s specialty flows such as High Definition FSI – a CMOS Image Sensor (CIS) benchmark technology for high quantum efficiency, low dark current CIS technology, and high voltage SOI (silicon-on-insulator) based power management technologies.

High Definition FSI is a unique technology that enables the use of front side illumination (FSI) even for small pixels, where usually, an expensive backside illumination (BSI) is being widely used in the industry. High Definition FSI consists of light separation walls combined with a light pipe structure that funnels the light into the individual pixels with minimal light loss. This technology provides high sensitivity (high quantum efficiency) to light, low sensitivity to different angles of light that helps in preventing shading at the periphery of the image and excellent color separation leading to true and vivid colors.

The dark current performance CIS technology is known to be one of the best in the industry, not only in the average very low values of dark currents even at elevated temperatures, but also with extremely small tail of high dark current pixels, known as “bright pixels”. As a result, Panasonic technology allows excellent images at low light conditions (night) with no bright pixels in the image. This technology is well suited for high end DSLR (digital single lens reflex) type cameras.

The production of High Voltage SOI technology from Panasonic immediately extends TowerJazz’s BCD (Bipolar-CMOS-DMOS) offering from 80V to 190V enabling entry into new display driver, industrial and medical markets previously not accessible. The technology includes a low-Rds(on) integrated IGBT (insulated-gate bipolar transistor) to enable efficient high-voltage drivers, 5V CMOS for integration of digital and analog functions, SOI substrates for signal isolation, and thick Cu layers for low-loss interconnects.

“This partnership brings together two leaders – Panasonic, an acknowledged analog components and systems leader, and TowerJazz, a recognized analog foundry leader – to create a company that will serve and grow the analog foundry space as no existing single foundry company can,” says Russell Ellwanger, TowerJazz CEO.

TowerJazz will issue to Panasonic ordinary shares in the value of approximately $8 million.

The jv balance sheet assets will include, among others, the cap-ex tools of the three fabs, cash in the amount of approximately $40 million to be invested by Panasonic and work in process (inventories) manufactured at Panasonic fabs before the closing date.

The target date for formal establishment of the JV will be April 1, 2014.

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