TowerJazz and Panasonic JV update

Within the scope of the JV, Panasonic transferred its semiconductor manufacturing process and capacity tools of 8 inch and 12 inch wafers at its Hokuriku factories (Uozu, Tonami and Arai), to the JV, committing to acquire its products from the JV for a long-term period of at least five years of volume production. TowerJazz is holding 51% of the shares of the JV, and its revenues are increased by approximately USD 400 million per annum. Panasonic Corporation will be a 49% shareholder of the JV. “I am pleased that we completed this strategic and momentous business agreement with Panasonic. The consolidation of our Japanese operations, resulting in significant reduction in fixed costs with an actual increase in available capacity and an enhanced technology offering, will strongly impact the company’s future profitability and shareholder value.” In addition, TowerJazz intends to cease the operations of its Nishiwaki (Japan) facility in the course of restructure and rationalization of its Japan manufacturing and business plans. This will enable the company to reduce its annual fixed costs by approximately USD 130 million per annum. The company has retained the services of a Japanese outplacement company, with a history of 95% placement success, to facilitate continued employment to the remaining employees. Products of key customers, currently being manufactured at the Nishiwaki facility, will be transferred into the company's other factories. Amir Elstein, TowerJazz Chairman, stated, "I am pleased that we completed this strategic and momentous business agreement with Panasonic. The consolidation of our Japanese operations, resulting in significant reduction in fixed costs with an actual increase in available capacity and an enhanced technology offering, will strongly impact the company’s future profitability and shareholder value."