MIGDAL HAEMEK, Israel -- Tower Semiconductor Ltd., the Israeli foundry manufacturer of chips, managed to increase sales in the second quarter but net losses remained relatively high, partly due to expenses associated with the construction of its second wafer fab. The company did note that its Fab 1 was operationally cash positive in the quarter.
Sales for the second quarter of 2002 increased from the previous quarter by 38% to $11.6 million, but were still lower than in the same quarter a year earlier when the company recorded sales of $12.5 million.
The loss for 2002's second quarter, $11.3 million, included non-capitalized Fab 2 expenses of $8.1 million. In the first quarter of 2002 Tower made a loss of $12.0 million including Fab 2 expenses of $6.4 million. In the second quarter of 2001 Tower made a loss of $9.7 million with $3.3 million attributed to Fab2.
"Tower's increased sales this past quarter are due to increased demand from most of its customers for both established and new products," said Yoav Nissan-Cohen, joint chief executive officer of Tower in a statement. "However, our customers continue to report lack of visibility and therefore at this point we cannot give firm indications for the fourth quarter and beyond. Despite these uncertainties, we currently foresee moderate growth in the second half of 2002.
Tower recently said it has found another source of funding for Fab 2, the Ottawa Teachers' Pension Plan, and launched a rights issue to try and obtain more money (see July 24).