2024-02-17 22:08:00
Tower Semiconductor closes Pub 1 in Migdal Ha’Emek, will move production to Pub 2 for operational savings
The Tower Semiconductor company from Israel has proposed to establish a production facility (Pab) with an investment of 8 billion dollars in India for the production of chips with 65 nm and 40 nm technology, the “Indian Express” reported. The move comes as part of the Indian government’s ongoing efforts to promote local manufacturing of semiconductors, followed by announcements from companies such as Micron to set up OSAT plants in the country.
The Indian government is in the process of evaluating the proposal, and if it is approved under India’s $10 billion chip manufacturing program, the government will participate in 50% of the cost.
The announcement of Tower Semiconductor’s bid joins a wave of global interest in advancing chip manufacturing, with reports of US announcements of multi-billion dollar investments in the field in the coming weeks. Despite the challenges, this interest is indicative of the many opportunities that lie in India for global technology companies, both due to the local engineering skills and the growing market.
Likewise, Tower Semiconductor’s proposal highlights the need for a broader policy that supports the entire supply chain of the industry, including financial incentives, a competitive tax structure, and the availability of resources such as land, water and infrastructure. India’s success in chip manufacturing depends on its ability to address these challenges and become a significant player in the global chip manufacturing landscape.
Operational consolidation in Israel
Tower is closing Pub 1 in Migdal Ha’Emek and will transfer production to Pub 2 for operational savings. This is what the company’s management stated in the report for the fourth quarter of 2023. It was also stated that the company will give up unprofitable projects to make room.
“As a response to changes in global market trends and customer demand, the company will streamline operations in Israel in the form of an operational consolidation of the company’s 6-inch operations, carried out by Pub 1, with the 8-inch operations carried out by Pub 2. Part of the activity will be fully integrated into Pub 2 and will allow operational efficiency and continuity. At the same time, certain activities whose profitability rate is low will be stopped, in accordance with the company’s long-term strategic goals and its long-term financial model.” The company’s management wrote.
the sales In the fourth quarter of 2023 totaled $352 million, compared to $358 million in the third quarter of 2023. Sales in the fourth quarter of 2022 totaled $403 million.
the profit the raw In the fourth quarter of 2023 totaled $84 million, compared to $87 million in the third quarter of 2023. Gross profit in the fourth quarter of 2022 totaled $125 million.
operating profit In the fourth quarter of 2023 it amounted to $45 million, compared to $362 million in the third quarter of 2023, which included receipts resulting from the cancellation of the merger agreement with Intel in the amount of $314 million, net after deducting transaction-related costs. The operating profit in the fourth quarter of 2022 amounted to $99 million and included $14 million in income, net in connection with the restructuring of the company’s operations in Japan that took place during 2022.
the net profit In the fourth quarter of 2023 it amounted to $54 million, representing $0.49 basic earnings per share and $0.48 diluted earnings per share, compared to $342 million in the third quarter of 2023, representing $3.10 basic earnings per share and $3.07 diluted earnings per share and including $290 million , net after taxes from the proceeds resulting from the cancellation of the merger agreement with Intel. Net profit in the fourth quarter of 2022 amounted to $83 million, representing $0.76 basic profit per share and $0.75 diluted profit per share and including a profit of $9 million, net in connection with the restructuring of the company’s operations in Japan.
And as for Japan, the members of the company’s management also note in the report: “On January 1, 2024, an earthquake occurred in Japan in the area near our factories in Hokuriku, in which no physical damage was caused to the company’s employees. Thanks to the construction quality of the buildings, there was no physical damage to the buildings, but there was damage to the machines and inventory in the process in both factories, and there was also a break in the factories’ activity. Thanks to the dedicated and high-quality work of the company’s employees, the two factories returned to activity, the current week reaches the level planned in the annual plan.”
Russell Ellwanger, CEO of Tower Semiconductorsaid: “We ended the year 2023 with many doors and new opportunities that opened up to us after a merger deal that did not materialize. The company is in the best position in its history, based on its financial strength, its technological offering, its operational performance and the expansion of its capabilities, all while having an important strategic partnership most with the company’s customers.”
Alwanger added: “We anticipate a recovery in several market segments and therefore expect growth in revenues from quarter to quarter during the year 2024.”
#Tower #build #factory #worth #billion #dollars #India