TOWERJAZZ TO ACQUIRE THREE OF PANASONIC’S SEMICONDUCTOR FABS (NIKKEI HEADLINE)
NOVEMBER 28, 2013 GERHARD FASOL
Nikkei (the world’s biggest business daily, see our J-Media report) reported as their top headline yesterday, that TowerJazz is planning to acquire interests in three of Panasonic’s reportedly largely written-off semiconductor fabs valued at about US$ 100 million.
Nikkei reports that Panasonic plans to spin the three fabs located in Uozu-shi in Toyama-ken (富山県魚津市), in Tonami-shi in Toyama-ken (富山県砺波市) and Myoku-shi in Niigata-ken (新潟県妙高市) into a separate company. Recently it has been reported, that this new company will be owned 51% by TowerJazz and 49% by Panasonic.
TowerJazz is a leading Israel-USA foundry company traded on NASDAQ. TowerJazz in 2011 acquired a semiconductor fab in Nishiwaki-shi in Hiyogo-ken (兵庫県西脇市). The Nishiwaki fab was initially built by a joint-venture between Texas-Instruments and Kobe-Steel, and was later acquired by Micron. TowerJazz acquired the Nishiwaki-fab from Micron in 2011.
We believe that the driver for these transactions are both PUSH and PULL:
Panasonic’s need for capital
Panasonic’s need to withdraw from loss-making operations (Panasonic’s semiconductor operations reported YEN 20500 million (US$ 200 million) operating losses for revenues of YEN 184 billion YEN (US$ 1.8 billion) and need to focus on a smaller number of core businesses
need for investments in the semiconductor fabs to upgrade equipment and Panasonic’s difficulties to supply such capital
the imperative to globalize management
TowerJazz’ business focus on fab operations, and cooperations with partners
TowerJazz’ interest in expanding operations in Japan