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EXHIBIT 99.2
TOWER Udi Efrat
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CONTACT: Technical Marketing Manager
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011-972-6-650-6203
011-972-6-654-7788 (fax)
[email protected]
SANDISK Bob Goligoski
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CONTACT: SanDisk Corporation
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408 - 542 - 0463
[email protected]
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KCSA Paul Holm/Joseph A. Mansi
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CONTACT: 212-896-0201/896-1205
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[email protected]/[email protected]
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www.kcsa.co
TOWER SEMICONDUCTOR AND SANDISK CORPORATION
ANNOUNCE $75 MILLION STRATEGIC INVESTMENT AGREEMENT
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Tower To Build New Fab In Israel With SanDisk As First Wafer Partner
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Tower Expects To Sign Additional Partners In Near Future
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Construction Of New Fab Anticipated To Start This Year
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Parties will host joint teleconference call on July 5
MIGDAL HAEMEK, ISRAEL, July 4, 2000 -- Tower Semiconductor (NASDAQ: TSEM)
and SanDisk Corporation (NASDAQ: SNDK) today announced that they have entered
into a definitive agreement under which SanDisk will make a $75 million
strategic investment in Tower. In return for its investment, SanDisk will
receive equity, corresponding representation on Tower's board and committed
production capacity in the advanced fab Tower plans to build in Migdal Haemek,
Israel. The announcement was made at a joint Tower-SanDisk press conference.
Tower plans to raise additional equity, mostly from other strategic
partners in similar transactions, of approximately $350 million. It is expected
that following the completion of all the financing transactions necessary for
the new wafer manufacturing facility, SanDisk will hold approximately a 10%
stake in Tower,
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while the Israel Corp. will have about 20%. Additional strategic partners that
will join the initiative will hold together approximately 30% of the company.
"I am pleased to announce that SanDisk is joining us both as a major
investor and wafer partner in the new fab," said Dr. Yoav Nissan-Cohen, Tower's
Co-Chief Executive Officer. "The two partnerships announced so far - first with
Toshiba and now with SanDisk - were significant steps toward the new fab.
Following this agreement with SanDisk, we expect to announce similar agreements
with additional wafer partners in the very near future."
Nissan-Cohen continued, "This fab, which will be the most advanced pure-
play foundry facility in Europe, will enable us to provide our customers with
leading edge processes and meet the demand for our advanced specialized
technologies. With the new fab, we will be able to maximize the value of our
CMOS image sensor technology, and also of the microFLASH(R) process, which we
developed jointly with Saifun Semiconductor based on their pioneering
technology."
Dr. Eli Harari, President and CEO of SanDisk said, "SanDisk is very pleased
to announce this strategic investment in Tower Semiconductor. This step
represents a natural extension of our strategic alliance with Toshiba for the
joint development and manufacturing of advanced flash memories and SD (Secure
Digital) Card controllers. Toshiba has recently agreed to transfer its advanced
CMOS Logic technology to Tower under a separate Technology License Agreement. We
intend to incorporate this technology in the design and future manufacturing by
Tower of the advanced controller chips used in SanDisk's flash memory cards. Our
highly successful SanDisk Israel Design Center, which has the responsibility for
developing every SanDisk Flash controller used in our MultiMediaCards and Secure
Digital Cards, will work closely with Tower to bring up the production of future
advanced controller chips for SanDisk."
Harari also said, "The strong financial incentives package expected from
the Israeli government, including substantial grants and favorable tax
incentives, was a critical element in our decision. We were also impressed with
Tower's reputation for excellent customer service, and we agree with Tower's
strategy to position itself as a European Centric foundry specializing in
advanced CMOS logic, embedded microFLASH and CMOS Image Sensors."
Tower and Israel Corporation Chairman Idan Ofer commented, "This agreement
reflects Israel Corporation's decision to focus on the semiconductor industry as
one of our main holdings. An advanced wafer fab is central to Tower's long term
plans. The combination of Toshiba's advanced technologies, Tower's quality
people and management team, and SanDisk's leadership and product innovation in
its market, will help us transform Tower into a world class, leading edge
semiconductor manufacturer over the next few years. We are now proceeding to put
into place the other necessary elements of the new fab. We are working to obtain
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approval of a government incentive package, bring in additional wafer partners
and secure the necessary financing to launch this exciting project."
Yasuo Morimoto, the president of Toshiba Semiconductor Company, said:
"Toshiba welcomes SanDisk's decision to join Tower as a wafer partner in its new
fab. We are already cooperating with SanDisk in the area of NAND Flash, and we
believe the Tower project will enable the two companies to enhance their
business. We are also confident that the support of Toshiba and SanDisk will
contribute to the success of Tower's project."
About Tower's New Fab
Tower will use the investment, expected government grant, bank loans and
its own cash toward constructing an advanced fab adjacent to its current
facility in Migdal Haemek, Israel. The new fab, called "Fab 2", is planned to
employ approximately 1,000 professionals and produce up to 33,000 200-mm wafers
per month. Tower has already started recruiting employees for Fab 2 in Israel
and abroad, and is preparing an extensive training program to bring the new
recruits to the necessary skill level. Tower is planning to commence
construction of the new Fab later this year. The agreement between Tower and
SanDisk follows the previously announced technology transfer agreement between
Tower and Toshiba Corporation pursuant to which Toshiba agreed to transfer to
Tower the deep sub-micron CMOS process technologies to be used in the new fab.
Transfer of know-how from Toshiba has already begun with Tower engineers at
Toshiba's plant in Japan.
Agreement Terms
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Under the terms of the agreement, SanDisk's investment will be made in
several stages over an approximately 18 month period, against satisfactory
completion of key milestones for the construction, equipping and commencement of
production at the new wafer fab. SanDisk will receive from Tower a guaranteed
portion of the available wafer capacity at competitive pricing, with first
production expected in 2002. SanDisk will also hold an option to acquire
additional equity of approximately 10% of Tower under generally similar terms.
The total cost of the project is estimated at $1.5 billion through the end of
2003. The closing of the transaction with SanDisk is subject to several
conditions, including the timely approval of a financial incentive package from
the Israeli government, securing additional required financing from other wafer
fab partners and banking and/or financial institutions, timely commencement of
fab construction, as well as respective board approval.
Tower and SanDisk CEOs will hold a joint teleconference call to discuss the
news in this press release. The call will take place at noon (EDT), Wednesday,
July 5. To take part in the teleconference call, dial 1-800-521-5469 (domestic)
or 1-303-267-1007 (international) about 10 minutes prior to noon
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(EDT) and ask for the "Tower Semiconductor Teleconference." You will then hear a
presentation by Dr. Yoav Nissan-Cohen and Dr. Eli Harari, who will host the call
and be available to answer questions.
The teleconference may also be heard on vcall's Web site at
http://www.vcall.com. Replay: For those unable to participate, a replay will be
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made available from 2 pm (EDT) on July 5 to 7 pm (EDT) on July 7. To listen in,
please dial 1-800-625-5288 (domestic) or 1-303-804-1855 (international). Replay
ID Code: 756681.
TOWER SEMICONDUCTOR LTD. is an independent manufacturer and service
provider of semiconductor integrated circuits on silicon wafers. As a foundry,
Tower provides IC design, manufacturing and turnkey services using advanced
production capabilities and the proprietary IC designs of its customers, and is
specializing in providing solutions for embedded non-volatile memory devices and
CMOS image sensors. ICs manufactured by Tower are incorporated into a wide range
of products in diverse and rapidly growing markets, including computer and
office equipment, communication products and consumer electronics.
SANDISK CORPORATION is the world's largest supplier of flash data storage
products, designs, manufactures and markets industry-standard, solid-state data,
digital imaging and audio storage products using its patented, high density
flash memory and controller technology. SanDisk is based in Sunnyvale,
California.
microFLASH(R) is a registered trademark of Tower Semiconductor Ltd.
SanDisk's web site/home page address: http://www.sandisk.com
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Tower's web site/home page address: http://www.TowerSemi.com
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Tower And SanDisk Safe Harbor Statement
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) satisfaction of
the conditions to the closing of the agreement with SanDisk, including obtaining
commitments for additional equity and debt financing and government grants, (ii)
initiating and completing the construction of a new wafer manufacturing
facility, (iii) conditions in the market for foundry manufacturing services and
in the market for semiconductor products generally, (iv) successful completion
of the development and introduction to production of Tower's microFLASH process
and other advanced CMOS technologies that are currently under development and/or
being introduced to production, (v) market acceptance and competitiveness of the
products to be manufactured by Tower for customers using these technologies and
(vi) ramp-up at Tower's new fabrication facility. A more complete discussion of
risks and uncertainties that may affect the accuracy of these statements, and
Tower's business generally, is included at "Item 1. Business -- Factors Which
May Influence Future Results and Accuracy of Forward-Looking Statements" in
Tower's most recent Annual Report on Form 20-F as filed by Tower with the
Securities and Exchange Commission.
