Tower Semiconductor looks to hire again

Company confident positive trend will continue into 2006.

tower semiconductor 88 (photo credit: )
tower semiconductor 88
(photo credit: )
Building on positive revenue growth and recent customer wins, Tower Semiconductor Ltd. is planning on hiring for the first time since implementing major staff cut backs at the end of 2004, The Jerusalem Post has learned. "We have no need to reduce our staff and in certain areas we are increasing our headcount," Tower's chief executive officer Russell Ellwanger told the Post Sunday during a tour of the company's Migdal Ha'emek Fab 2 facility. "We've seen a rise in our manufacturing output and are optimistic about growth in 2006. We're always focused on increasing and improving our technical components and we will be very aggressive in hiring technical capabilities at the company." While Ellwanger did not put an exact figure on the employment plans, others at the company said it would be hiring "several dozen employees in the coming year. The move comes just over one year after Tower laid off more than 200 employees in an attempt to cut costs. The company currently has around 1,300 employees. In its continuing cost saving efforts, Ellwanger said Tower would focus on lowering costs by improving efficiency and productivity of its processing tools. The company believes it has had a change in fortunes in recent months despite having reported a $203 million net loss for 2005, wider than the $170m. loss of the previous year, since the company's fourth quarter showed a 51 percent rise in revenues, over the third quarter and had positive earnings before income, tax, depreciation and amortization (EBITDA) for the first time since its Fab 2 development project started in 2000. "Achieving the positive EBITDA was a milestone for the company," Ellwanger said. "Our next goal would be to bring about a positive cash flow from operations on a quarterly basis." He would not however put a time frame on this goal. The company expects to follow up its fourth quarter successes with an increase in sales of between 6% and 13% in the current quarter (in line with its previous guidance of $33m. to $35m.), and achieving a positive EBITDA for the full year. Ellwanger attributed the recent spurt in growth to the reorganization implemented over the last year and key contract wins in the last quarter. Earlier this year, the Fab 2 plant started manufacturing a chip to be used in Zoran Corp.'s digital TV platform solution. It also recently started producing Wireless Lan chips for Atheros Communications and image sensors for Biomorphic Microsystems. Ellwanger said Tower is working with leading companies in the key growth areas in the semiconductor market, including cell phone shipments, personal computer, digital camera, MP3 player and digital TV markets. "The semiconductor market as a whole is experiencing an upside," he said. Tower has two manufacturing facilities out of which it produces integrated circuits. Fab 1 has a production capacity of 16,000 wafers per month and is currently working at full capacity. At full capacity, Tower expects Fab 2 to produce up to 40,000 wafers per month. Its current capacity is 16,000 wafers.