FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the month of November 2004 No. 2
TOWER SEMICONDUCTOR LTD.
(Translation of registrant's name into English)
P.O. BOX 619, MIGDAL HAEMEK, ISRAEL 23105
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [_]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [_] No [X]
On November 15, 2004, the Registrant announced a cost reduction plan to
reduce its workforce to its 2003 year-end level. Attached hereto is a copy of
the press release.
This Form 6-K is being incorporated by reference into all effective
registration statements filed by us under the Securities Act of 1933.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TOWER SEMICONDUCTOR LTD.
Date: November 15, 2004 By: /s/ Tamar Cohen
-------------------
Tamar Cohen
Corporate Secretary
TOWER SEMICONDUCTOR ANNOUNCES COST REDUCTION PLAN
THE COMPANY PLANS TO REDUCE ITS WORKFORCE TO ITS 2003 YEAR-END LEVEL
MIGDAL HAEMEK - ISRAEL - NOVEMBER 15, 2004 - Tower Semiconductor Ltd. (Nasdaq:
TSEM; TASE: TSEM), today announced that it is implementing a series of cost
reduction measures to adjust its capital and operating expenditures to existing
and short-term market conditions. Tower plans an across-the-board workforce
cutback of approximately 170 positions, representing approximately 12 percent of
Tower's employee base. The actions announced today are expected to be
implemented by December 31, 2004 and produce net annualized savings of
approximately $20 million in 2005 over today's run rate. During the first half
of 2005, Tower expects that its 0.13 and 0.18 tool capacity will be
approximately 15,000 wafers per month.
"While we are maintaining our positive long term outlook for the second quarter
of 2005, based on new customers that are in various stages of designing and
prototyping products in our fabs, we are responding to the existing and
short-term market conditions, our recent financial results and an industry-wide
inventory correction and slowdown, and have made some tough decisions to reduce
our workforce and cut costs," said Carmel Vernia, chairman and chief executive
officer of Tower. "Today's actions are a result of Tower's continual examination
of every aspect of our business, and our goal to reach positive EBITDA by the
second half of 2005."
"At the same time, we remain prepared to respond to customers' needs, and
committed to our strategy of establishing Tower as a leading specialized
foundry," added Vernia. "In line with our strategic roadmap, we expect to
continue our level of investment in key process development initiatives, that
would improve our unique technologies, which are less effected by market
conditions. We are confident that we will continue to provide the highest level
of award winning customer service and deliver exceptional customer value."
ABOUT TOWER SEMICONDUCTOR LTD.
Tower Semiconductor LTD. is a pure-play independent wafer foundry established in
1993. The company manufactures integrated circuits with geometries ranging from
1.0 to 0.13 micron; it also provides complementary technical services and design
support. In addition to digital CMOS process technology, Tower offers advanced
non-volatile memory solutions, mixed-signal and CMOS image-sensor technologies.
To provide world-class customer service, the company maintains two manufacturing
facilities: Fab 1 has process technologies from 1.0 to 0.35 micron and can
produce up to 16,000 150mm wafers per month. Fab 2 features 0.18-micron and
below process technologies, including foundry-standard technology. When fully
equipped, Fab 2 is expected to offer full production capacity of 33,000 200mm
wafers per month. The Tower Web site is located at www.towersemi.com.
SAFE HARBOR
THIS PRESS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT TO
RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY FROM THOSE PROJECTED OR IMPLIED
BY SUCH FORWARD-LOOKING STATEMENTS. POTENTIAL RISKS AND UNCERTAINTIES INCLUDE,
WITHOUT LIMITATION, RISKS AND UNCERTAINTIES ASSOCIATED WITH: (I) THE COMPLETION
OF THE EQUIPMENT INSTALLATION, TECHNOLOGY TRANSFER AND RAMP-UP OF PRODUCTION IN
FAB 2, (II) HAVING SUFFICIENT FUNDS TO COMPLETE THE FAB 2 PROJECT, (III) THE
CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY AND THE RESULTING PERIODIC
OVERCAPACITY, (IV) OPERATING OUR FACILITIES AT SATISFACTORY UTILIZATION RATES,
(V) THE EFFECT THAT OUR EXPECTED DECREASE IN SALES IN THE COMING QUARTERS WILL
HAVE ON OUR ABILITY TO MEET CERTAIN OF THE COVENANTS STIPULATED IN OUR AMENDED
FACILITY AGREEMENT, WHICH WE CURRENTLY FORECAST WE WILL NOT MEET IN THE NEXT
SEVERAL QUARTERS, (VI) OUR ABILITY TO CAPITALIZE ON INCREASES IN DEMAND FOR
FOUNDRY SERVICES, (VII) MEETING THE CONDITIONS TO RECEIVE ISRAELI GOVERNMENT
GRANTS AND TAX BENEFITS APPROVED FOR FAB 2, WHICH WE CURRENTLY FORECAST WE MAY
NOT MEET, AND OBTAINING THE APPROVAL OF THE ISRAELI INVESTMENT CENTER TO EXTEND
THE FIVE-YEAR INVESTMENT PERIOD UNDER OUR FAB 2 APPROVED ENTERPRISE PROGRAM,
(VIII) ATTRACTING ADDITIONAL CUSTOMERS, (IX) NOT RECEIVING ORDERS FROM OUR WAFER
PARTNERS AND TECHNOLOGY PROVIDERS, (X) FAILING TO MAINTAIN AND DEVELOP OUR
TECHNOLOGY PROCESSES AND SERVICES, (XI) COMPETING EFFECTIVELY, (XII) OUR LARGE
AMOUNT OF DEBT, AND (XIII) ACHIEVING ACCEPTABLE DEVICE YIELDS, PRODUCT
PERFORMANCE AND DELIVERY TIMES. A MORE COMPLETE DISCUSSION OF RISKS AND
UNCERTAINTIES THAT MAY AFFECT THE ACCURACY OF FORWARD-LOOKING STATEMENTS
INCLUDED IN THIS PRESS RELEASE OR WHICH MAY OTHERWISE AFFECT OUR BUSINESS IS
INCLUDED UNDER THE HEADING "RISK FACTORS" IN OUR MOST RECENT ANNUAL REPORT ON
FORM 20-F AND IN OUR FORM F-3, AS AMENDED, AS WERE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND THE ISRAEL SECURITIES AUTHORITY.
# # #
PR AGENCY CONTACT INVESTOR RELATIONS CONTACT CORPORATE CONTACT
Matt Beevers Sheldon Lutch Tamar Cohen
Pacifico, Inc. IR & Communications Tower Semiconductor
+1 (408) 293-8600 +1 (212) 268 1816 +972 (4) 650 6998
mbeevers@pacifico.com sheldon@fusionir.com pr@towersemi.com