TowerJazz signs definitive agreement with Asian entity

MIGDAL HA'EMEK, ISRAEL: TowerJazz, the global specialty foundry leader, today announced the signing of a definitive agreement with an Asian entity, in furtherance of the company's corporate strategy to penetrate the Asian markets and to leverage its manufacturing know-how and assets to expand its business in this region.

Under the agreement, TowerJazz will arrange for the required manufacturing know-how and certain equipment required for successful capacity ramp-up.

The deal will realize TowerJazz revenue of approximately US $130 million, largely during the first contract year of 2010. This agreement allows TowerJazz to realize profits from its valuable manufacturing expertise and asset base, and to enlarge its sphere of activity in Asia alongside the recently announced customer agreements with GrandTek, C&S Technology, TAEJIN Technology, Dongwoon Anatech, Cesign, SWID and 3PEAKIC Microelectronics.

In addition to the substantial cash-in generated by this engagement, TowerJazz expects that this project will lead to additional business opportunities through new customers and ventures.

"It is a notable achievement and acknowledgement of our capabilities that TowerJazz was chosen to provide the know-how, training, and turnkey manufacturing solutions to a project of this scope and significance," said Russell Ellwanger, Chief Executive Officer of TowerJazz.

"This project is accretive to our strategy to grow market share within Asia, as evidenced by the opening of a sales and technical support office in Korea this year with multiple design wins and customer announcements in that region, particularly within Power Management.

"Additionally, our ownership percentage, Board representation and manufacturing agreement with HHNEC in Shanghai, China is further affirmation of our commitment to growth in Asia. We expect that this project will strengthen our traction in this geographic area and trust that our Asian customer base will multiply as a result."