Tower Semiconductor

(Nasdaq:TSEM) today announced the closing of all agreements with its equity investment partners for the construction of Tower's new wafer fabrication plant in Israel, called the Fab 2. The company has received its first aggregate installment out of the $300 million investment committed to by the company's equity partners.

A first installment aggregate sum of $80 million was transferred to Tower, including $29.3 million as a prepayment against future product delivery to wafer partners from the Fab 2 site. Equity partners received Tower common shares in return as follows: SanDisk (

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(Nasdaq:SNDK), - 866,551 shares; Alliance Semiconductor (NASDAQ: ALSC), - 866,551 shares; Macronix (NASDAQ: MXICY). - 866,551 shares; QuickLogic (NASDAQ: QUIK) 288,850 shares and Israel Corp. 1,030,220 shares. The total number of shares distributed was 3,918,723.

Tower plans to construct the Fab 2 wafer production site adjacent to its current facility in Migdal Haemek, Israel. The new plant will employ a staff of 1,000 and produce up to 33,000 200-mm wafers per month in geometries of 0.18 micron and below, using advanced CMOS technology from Toshiba. Funding for the project will come from wafer partners, Israel Corp., Israeli government grants, bank loans and Tower's own resources.