14 DAY TRIAL // Tower Semiconductor has just announced that the company is seeking to buy a Micron Technology wafer fab that is found in Nishiwaki City, Hyogo prefecture, Japan, for $140 million as the company seeks to expand its production capacity and presence in the Asia-Pacific region.
Tower Semiconductor is a specialty foundry chipmaker and the company holds another three fabs, two in Israel and one in Newport Beach, California.
Right now, the chipmaker manufactures about 60,000 wafers per month and the acquisition of the Micron fab would double the number of wafers that the company is able to produce on a monthly basis. In addition, this move would also help Tower's plans of reaching a $1 billion annual revenue by 2014.
According to EETimes, the total value of the transaction is expected to reach $140 million, of which $40 million would be paid in cash and about $20 million in Tower ordinary shares that will be issued to Micron Technology or its Japanese subsidiary.
The remaining $80 million are long-term retirement liabilities that will be paid incrementally to Micron's employees.
Micron's Nishiwaki City facility can fabricate chips down to 95nm and, as part of the acquisition deal, it would manufacture products for its current owner for the next three years.
"This proposed transaction would provide a long-term bridge toward a successful future for the Nishiwaki site," said Steve Appleton, chairman and CEO of Micron, in a press statement.
"Russell [Russell Ellwanger, CEO of Tower Semiconductor Ltd.] and his team have demonstrated an ability to grow the company and achieve positive financial results for shareholders.
“We look forward to being both a shareholder and working with them in this endeavor and beyond," concludes Mr. Appleton.
At the beginning of the year, Tower's CEO has announced that the foundry is looking to make an acquisition, but no specific names were mentioned until now.