FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the month of July 2007 No. 3
TOWER SEMICONDUCTOR LTD.
(Translation of registrant's name into English)
RAMAT GAVRIEL INDUSTRIAL PARK
P.O. BOX 619, MIGDAL HAEMEK, ISRAEL 23105
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [_]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [_] No [X]
On July 16, 2007, Tower Announces Plan to Further Ramp Up its Fab 2
Capacity, attached hereto is a copy of the press release.
This Form 6-K is being incorporated by reference into all effective
registration statements filed by us under the Securities Act of 1933.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TOWER SEMICONDUCTOR LTD.
Date: July 16, 2007 By: /s/ Nati Somekh Gilboa
--------------------------
Nati Somekh Gilboa
Corporate Secretary
TOWER ANNOUNCES PLAN TO FURTHER RAMP UP ITS FAB 2 CAPACITY
THE COMPANY IS EXPLORING SPECIFIC OPPORTUNITIES TO SIGNIFICANTLY EXPAND FAB2
CAPACITY FOR ADVANCED TECHNOLOGIES AT A LOW COST MODEL;
SIGNED LOIS WITH ITS LENDER BANKS AND ISRAEL CORPORATION TO SECURE FUNDING
MIGDAL HAEMEK, Israel - July 16, 2007 - Tower Semiconductor Ltd. (NASDAQ: TSEM;
TASE: TSEM), a pure-play independent specialty foundry, announced today that the
Company is exploring unique tool acquisition opportunities which would
significantly expand Fab2 capacity beyond 24,000 wafers per month, primarily in
advanced technologies (0.13u and below), in a cost effective manner.
Further to the recently announced raising of $40 million in long term-bonds,
Tower concluded today the signatures of letters of intent ("LOIs") with its
lender banks, Bank Leumi and Bank Hapoalim, and with Israel Corporation, a major
shareholder, to provide credit lines totaling up to $60 million, in order to
secure the funding of the equipment required for the ramp up. Loans borrowed
under the credit lines will bear interest at an annual rate of LIBOR plus 3% and
will be repayable by no later than March 2010. The LOIs are subject to the
signing and closing of definitive agreements and the receipt of corporate
approvals. They also contemplate that the Company will pay the banks and TIC
customary fees, including issuing warrants for an aggregate amount of
approximately 1.5% of the Company's fully diluted share capital with an exercise
price of $2.04.
Russell Ellwanger, Tower's chief executive officer, said: "Fab2 continues to run
at greater than 90% utilization with customer forecasted demand exceeding the
current capacity level. In order to meet this demand, we are evaluating several
cost effective opportunities to increase Fab 2's capacity beyond 24,000 wafers
per month. These opportunities, if materialized, would significantly increase
our sales, cash flow and operational results, with a fast pay-back-period and a
high return-rate-on-investment (ROI). The LOIs signed with the banks and TIC, as
well as the funds we raised in June through long-term bonds, will enable us to
act quickly to leverage these opportunities."
ABOUT TOWER SEMICONDUCTOR LTD.
Tower Semiconductor Ltd. is a pure-play independent specialty wafer foundry
established in 1993. The company manufactures integrated circuits with
geometries ranging from 1.0 to 0.13-micron; it also provides complementary
technical services and design support. In addition to digital CMOS process
technology, Tower offers advanced non-volatile memory solutions, mixed-signal &
RF-CMOS, and CMOS image-sensor technologies. To provide world-class customer
service, the company maintains two manufacturing facilities, each with standard
and specialized process technology processes: Fab 1 ranging from 1.0 to 0.35 and
Fab 2 featuring 0.18 and 0.13-micron. Tower's web site is located at
http://www.towersemi.com.
SAFE HARBOR
This press release includes forward-looking statements, which are subject to
risks and uncertainties. Actual results may vary from those projected or implied
by such forward-looking statements. Potential risks and uncertainties include,
without limitation, risks and uncertainties associated with: (i) the completion
of the equipment installation, technology transfer and ramp-up of production in
Fab 2 and raising the funds therefor, (ii) the cyclical nature of the
semiconductor industry and the resulting periodic overcapacity, fluctuations in
operating results, future average selling price erosion that may be more severe
than our expectations, (iii) having sufficient funds to operate the company in
the short-term and the funding needs for its ramp-up plan, (iv) operating our
facilities at satisfactory utilization rates which is critical in order to
defray the high level of fixed costs associated with operating a foundry and
reduce our losses, (v) our ability to satisfy the covenants stipulated in our
credit facility agreement, as amended, (vi) our ability to capitalize on
increases in demand for foundry services, (vii) meeting the conditions to
receive Israeli government grants and tax benefits approved for Fab 2 and
obtaining the approval of the Israeli Investment Center for a new expansion
program, (viii) attracting additional customers, (ix) not receiving orders from
our wafer partners and customers, (x) failing to maintain and develop our
technology processes and services, (xi) competing effectively, (xii) our large
amount of debt and our ability to repay our short-term and long-term debt on a
timely basis, (xiii) achieving acceptable device yields, product performance and
delivery times, (xiv) the timely development, internal qualification and
customer acceptance of new processes and products, (xv) the entering into and
the consummation of definitive agreements with TIC and the banks based on the
terms of the LOIs, including the receipt of corporate and/or other approvals as
required under applicable law , (xvi) the entering into and the consummation of
agreements to purchase the equipment to increase Fab2 capacity beyond 24,000
wafers per month and timely installation thereof, (xvii) a prospectus relating
to the bonds issued by the Company in June 2007 being declared effective by the
Israel Securities Authority in a timely manner in order to release the proceeds
raised currently being held in escrow, and (xviii) business interruption due to
terror attacks, earthquakes, other acts of God and the security situation in
Israel.
A more complete discussion of risks and uncertainties that may affect the
accuracy of forward-looking statements included in this press release or which
may otherwise affect our business is included under the heading "Risk Factors"
in our most recent filings on Forms 20-F, F-3 and 6-K, as were filed with the
Securities and Exchange Commission and the Israel Securities Authority. Future
results may differ materially from those previously reported. We do not intend
to update, and expressly disclaim any obligation to update, the information
contained in this release.
CONTACT:
Tower Semiconductor
Noit Levi, +972 4 604 7066
noitle@towersemi.com
or:
Shelton Group
Jim Mathias, (972) 239-5119 ext. 115
jmathias@sheltongroup.com