It's Official: TowerJazz Acquires 51% of Panasonic's Image Sensor Fabs, Including 12-inch 65nm CIS Line

Business Wire, Reuters: TowerJazz and Panasonic sign a definitive agreement to create a joint venture (JV) to manufacture Panasonic’s products. Panasonic will transfer its semiconductor manufacturing process and capacity tools of 8-inch and 12-inch wafers at its Hokuriku factories (Uozu, Tonami and Arai) to the JV, committing to acquire its products from the JV for a period of at least five years, and will transfer to TowerJazz 51% of the shares of this JV.

The JV is expected to increase TowerJazz’s technology offerings, including Panasonic's High Definition FSI technology known for high QE and low dark current. High Definition FSI is said to enable the use of FSI even for small pixels. It consists of light separation walls combined with a light pipe structure that funnels the light into the individual pixels with minimal light loss. This technology provides a high QE, and wide acceptance angles that helps in preventing shading at the periphery and improves color separation leading to true and vivid colors.

The dark current performance CIS technology is said to be one of the best in the industry, not only in the average very low values of dark currents even at elevated temperatures, but also with extremely small tail of high dark current pixels, known as hot pixels. As a result, Panasonic technology allows excellent images at low light conditions with no hot pixels in the image. This technology is well suited for high end DSLR type cameras.

Russell Ellwanger, TowerJazz CEO, commented, "We are honored to place our name side by side with Panasonic Corporation to create an innovative joint venture that provides high capacity, highest quality, multiple world leading analog platforms and, as well, 300mm advanced technology nodes. This partnership brings together two leaders – Panasonic, an acknowledged analog components and systems leader, and TowerJazz, a recognized analog foundry leader - to create a company that will serve and grow the analog foundry space as no existing single foundry company can."

For its 51% equity holding in the JV, TowerJazz will issue to Panasonic ordinary shares in the value of approximately $8M, based on TowerJazz average shares value during March 2014. As a result of holding its ordinary shares, Panasonic will become a minority stakeholder in TowerJazz. The JV balance sheet assets will include, among others, the cap-ex tools of the three fabs, cash in the amount of approximately $40M to be invested by Panasonic and work in process (inventories) manufactured at Panasonic fabs before the closing date.

Following this transaction, TowerJazz will rationalize its Japanese business, which may include fab consolidations between TowerJazz's Nishiwaki facility and the JV's facilities, and to this end, TowerJazz is evaluating potential ventures for the Nishiwaki facility. the 8-inch Nishiwaki plant has been acquired from Micron in 2011. It's used to manufacture Aptina sensors in 90nm process. Recently, Tower started to offer a foundry CIS process at Nishiwaki fab too.

Update: Panasonic has published more details on the JV fabs:

It's Official: TowerJazz Acquires 51% of Panasonic's Image Sensor Fabs, Including 12-inch 65nm CIS Line
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