Tower swings back to loss in Q1

LONDON – Tower Semiconductor Ltd., the specialty foundry that trades under the name TowerJazz, swung back to a net loss as revenues climbed by 6 percent from the same quarter a year before.

Tower (Migdal Haemek, Israel) made a net loss of $5.4 million on revenues of $120.6 million in the first quarter of 2011. The loss compares with a profit of $1.3 million made in 4Q10 and a net loss of $36.2 million made in 1Q10.

Revenues came in at the bottom end of the guidance of $120 million to $125 million given February 14 when announced its fourth quarter and full year results for 2010. Revenues fell by 10.7 percent from $135.1 million in 4Q10 but were up by 6.0 percent from the 1Q10.

"We signed a non-binding term-sheet with Micron Technologies to acquire the 60,000 wafers per month fab in Nishiwaki with a multi-year loading agreement," said Russell Ellwanger, CEO of Tower, in a statemement. "Considering that in Q1 we continued the 2010 momentum of triple digit per quarter design wins, the substantial added capacity of the Nishiwaki factory will be required as these design wins enter into volume production ramps. Ellwanger said he expected to close the deal with Micron with the "next few months" and that he welcomed Micron as a long-term strategic shareholder in Tower.

Tower said it could not provide guidance for the second quarter because it was not known exactly when, or if, revenue consolidation related to output from the Nishiwaki wafer fab would occur.


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