TowerJazz targets annual revenue of $1 billion by 2015 -CEO

Reuters

* Company to focus on sustainable GAAP net profit

* Expects formal notification on India chip plant in comingweeks

By Tova Cohen

TEL AVIV, Oct 10 (Reuters) - Israeli chip manufacturerTowerJazz is targeting annual revenue run-rate of $1billion a year by 2015, its chief executive Russell Ellwangersaid.

The company, which has plants in Israel, the United Statesand Japan, had revenue of $639 million in 2012.

"We would have to accelerate growth (to reach this goal),"Ellwanger told Reuters on the sidelines of a company symposium. "Our biggest focus is on sustainable GAAP net profit."

Ellwanger believes this will be achieved when the companyreaches quarterly revenue of $190 million to $200 million.

TowerJazz had a net loss on a GAAP basis in the secondquarter of $23 million and has had few profitable quarters on aGAAP basis in recent years due to heavy investments in itssecond chip plant in Israel.

The company has forecast revenue in the third quarter of$130 million to $140 million, compared with $125 million in thesecond quarter.

TowerJazz, which makes chips used in smartphones likeApple's iPhone and Samsung's Galaxy modelsas well as battery chargers and AC/DC adapters, expects to startseeing revenue next year from an anticipated contract to build aplant in India.

TowerJazz is part of one of two consortiums thathave proposed building semiconductor plants in India.

TowerJazz's consortium includes India's JaiprakashAssociates and IBM. The group has proposed aplant near New Delhi at a cost of about $4 billion.

Ellwanger said he expects a formal government notificationregarding a contract will be made in the next few weeks.

Groundbreaking on the plant could be about six months laterand it would take two years for silicon to start and three yearsto begin shipping revenue wafers, Ellwanger said.

TowerJazz's share in revenue from the construction andrunning of the plant would be $300 million over eight years,according to Israeli media reports.

TowerJazz will also be able to use part of the facility forits own products, enabling it to penetrate the Indian market.

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