Tower shortlisted to run Indian fab

LONDON – Specialist foundry Tower Semiconductor Ltd. (Migdal Haemek, Israel), which trades as TowerJazz, has said it has been shortlisted by the Indian government to run a 300-mm wafer fab to be constructed there.

However, any commercial impact from such a move, if it should happen, is a long way off, Tower said. Tower's CEO, Russell Ellwanger, said he expects it will take three years ground breaking for the fab to the shipping of commercial qualified silicon. Ultimately the factory is expected to have a manufacturing capacity of 30,000 wafer starts per month, he added.

Tower had previously announced that it was part of consortium headed up by cement maker Jaypee Associates and that included IBM that was bidding to be allowed to build fab. The fab would be predominantly owned by Jaypee while IBM would provide of baseline 90-nm, 65-nm and 45-nm manufacturing process technologies and Tower would be contracted to run the wafer fab and would be able to retain a portion of the fabs output for its own customers.

"We received a positive feedback from the Indian government within the past weeks that our consortium is now going to the next step in the approval process," said Ellwanger, during an analysts on a conference call held to discuss Tower's 2Q12 financial results. "We expect to receive a decision before year's end but again can give no guarantee to timing or if our consortium will ultimately win the selection," he added.

Ellwanger said the Indian government had not formally announced how many bids are involved in the next round, or how many have been screened out. In previous announcements the government has said a decision would be reached by the end of 2012.

"The factory from ground breaking would take three years to the point of having qualified silicon earnings through the factory," said Ellwanger. "So it’s three years to get started. We would build the factory contracting to build it. We would also operate the factory contracting to operate it. All agreements are with Jaypee," he added.


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