TowerJazz reports record revenues

5 August, 2016

The Israeli chip manufacturer reports a 29% leap in revenues to $305 million in Q2 2016. The massive manufacturing capacity buildup is starting to pay off

The Israeli chip manufacturer reports a 29% leap in revenues to $305 million in Q2 2016. The massive manufacturing capacity buildup is starting to pay off TOWERJAZZ

Israeli semiconductor manufacturer TowerJazz reports record sales in Q2 2016. The company has reported $305 million revenues, a 29% increase compared to $236 million in the same quarter last year. The company’s gross profit in Q2 2016 totaled $73 million, with an impressive margin of 22%. Following the publication of the positive earnings report, the company’s share has leaped by up to 5%.

The company comments that the rise in revenues and the favorable margin rates in Q2 stem from the ongoing expansion of production capacities of FAB 2 and FAB 3 production facilities. As well as the optimization of the company global operations. A further growth engine are the sales of production installations in TowerJazz’s joint venture with Panasonic TPSCo to third party customers.

During Q2 2016, the company has raised as much as $113 million in strate bonds. The capital raised was used to repay all the company’s debts to Israeli financial institutions, amounting to $78 million. The company currently has a cash and short term deposits balance of $311 million compared to $245 million as of March 2016.

The company has reported record sales of $583 million in the first half of 2016 – a 26% increase compared to sales in the same period last year. The gross profit and operational profit in the first half of 2016 amounted to $134 and $71 million respectively.

$1.3 billion in 2016

TowerJazz CEO Russell Ellwanger
TowerJazz CEO Russell Ellwanger

According to TowerJazz’s outlook, the company will end Q3 2016 with revenues of $325 million, with a 5% error margin. This figure represents a growth rate of 33% compared to Q3 2015, and a 7% increase from Q2 2016 revenues. This outlook reflects a yearly sales represents a $1.3 billion run rate for the third quarter, up 30% over the fourth quarter of 2015 achieved target of $1 billion run rate.

Mr. Russell Ellwanger, Chief Executive Officer of TowerJazz, commented, “Our strategy to answer the major analog trends, aligned with customers that are the leaders in their respective sectors, has proven itself. Having achieved a $1.2 billion annualized revenue run rate in the second quarter of 2016 with annualized $150 million net profit, and guiding a $1.3 billion run rate for the third quarter, up 30% over the fourth quarter of 2015 achieved target of $1 billion run rate, is a substantial verification of this strategy. Our major focus remains those trends that drive the Internet of Things namely seamless connectivity, low power consumption and sensors. To address those trends, our business units serve multiple diversified and growing application segments with unique and differentiated technology offerings.”

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Posted in: Business , Electronics Industry , News , Semiconductors , Technology

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