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Tower CEO Says Panasonic JV to Push Sales Past $1bn

(Corrects share price move in fourth paragraph of story first published April 1.)

April 1 (Bloomberg) -- Tower Semiconductor Ltd. expects sales to exceed $1 billion within four years after completing a joint venture with Panasonic Corp., Chief Executive Officer Russell Ellwanger said in an interview today.

A joint venture with the Japanese consumer electronics maker “allows us not just to achieve a billion dollars, but to go beyond, to $1.2 billion to $1.3 billion,” by 2016 to 2018, Ellwanger said.

The Tower CEO said the deal, which was completed today, will add about $400 million to annual revenues while fixed costs will be reduced by about $130 million a year from the closing of Tower’s Nishiwaki factory in Japan. The shares increased 3.6 percent to 32.03 shekels at the close in Tel Aviv.

The stock has advanced 105 percent since Dec. 20 when the Migdal Haemek, Israel-based chip-maker announced the joint venture with Panasonic and as the company signed an accord with institutional bondholders to reduce debt and extend maturities. Revenues for 2013 were $505 million and the company made a loss for the year of $107.7 million, according to a Feb. 27 Business Wire statement.

Tower holds a 51 percent stake in the Panasonic venture, according to a Dec. 20 company statement.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net James Doran, Robert Lakin

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