News Article
Tower hit by mounting losses and lower sales in Q1
Troubled Israel-based pure-play foundry Tower Semiconductor slipped further into the red in the first quarter of 2005, reporting escalating losses of US$55.5 million on declining revenues of $23.2 million.
Troubled Israel-based pure-play foundry Tower Semiconductor slipped further into the red in the first quarter of 2005, reporting escalating losses of US$55.5 million on declining revenues of $23.2 million.
Losses in the first quarter were greater than in the previous quarter (US$23.3 million) and the same period last year (US$38.5 million). Revenues meanwhile were down both sequentially (US$30.1 million) and year-on-year (US$27.2).
Tower expects revenues to recover slightly in the second quarter to between US$26 million to US$28 million but the beleaguered company still seems a long way from posting its first ever profit.
In one encouraging sign, Tower has reported an increase in new customer engagements, design starts and new product tape-outs. According to the company, this will yield higher new product revenue in the second half of 2005.
Russell Ellwanger, a former Applied Materials senior executive who was recently appointed chief executive of Tower, said: "Despite the apparent short term difficulties in our market, our pipeline of new customers, products and value-added technology projects is encouraging.
"It is especially encouraging to hear from our customers that the added value in several of these tape-outs is significant, and hence will continue to position Tower as a leading speciality foundry for years to come."
In the first quarter, Tower undertook a number of cost saving measures to reduce its cash burn, including major staff cutbacks.
The company has also revealed that some of its shareholders and banks are holding discussions to secure US$60 million of additional funding.
Losses in the first quarter were greater than in the previous quarter (US$23.3 million) and the same period last year (US$38.5 million). Revenues meanwhile were down both sequentially (US$30.1 million) and year-on-year (US$27.2).
Tower expects revenues to recover slightly in the second quarter to between US$26 million to US$28 million but the beleaguered company still seems a long way from posting its first ever profit.
In one encouraging sign, Tower has reported an increase in new customer engagements, design starts and new product tape-outs. According to the company, this will yield higher new product revenue in the second half of 2005.
Russell Ellwanger, a former Applied Materials senior executive who was recently appointed chief executive of Tower, said: "Despite the apparent short term difficulties in our market, our pipeline of new customers, products and value-added technology projects is encouraging.
"It is especially encouraging to hear from our customers that the added value in several of these tape-outs is significant, and hence will continue to position Tower as a leading speciality foundry for years to come."
In the first quarter, Tower undertook a number of cost saving measures to reduce its cash burn, including major staff cutbacks.
The company has also revealed that some of its shareholders and banks are holding discussions to secure US$60 million of additional funding.
