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TowerJazz in serious talks for acquisition

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CIOL Bureau
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TEL AVIV, ISRAEL: Israeli chipmaker TowerJazz is in "serious discussion" to acquire asset for capacity expansion said its chief executive on Wednesday.

Russell Ellwanger also said agreement could be signed in late June and would close in August. He also said the company would be accretive to profit within two quarters of closing and it is looking at plans to raise output capacity to upwards of 50,000 wafers per month.

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The Israeli chipmaker swung to an underlying first-quarter profit, boosted by record revenue and cost reductions, and forecast higher second-quarter revenue of $123-$128 million.

TowerJazz also said it obtained a record 111 design wins in the quarter, underpinning its hopes for sustainable growth.

“In January, we referred to a 2010 revenue target of a half billion dollars with $160 million EBITDA. Our second quarter guidance will have already attained the $500 million run rate, upon which we presently see indications of continued growth in the second half of the year,” said Ellwanger.

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Excluding one-off items, TowerJazz posted a net profit of $29 million, or 14 cents per share, compared with a loss of $3 million, or 2 cents a share, a year earlier.

On a GAAP basis the company's loss widened to $36 million from $28 million due to $34 million in financing expenses from a significant increase in the market and fair value of its convertible bonds and warrants.

The company achieved an operating profit on a GAAP basis for the first time since 2000. Revenue doubled to a record $114 million as the average selling price per wafer increased.

TowerJazz is the collective brand name of Tower Semiconductor Ltd, the specialty foundry maker, and its fully owned U.S. subsidiary Jazz Semiconductor

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