Atheros becomes Tower Semiconductor customer
Wireless chipset company Atheros is likely to generate $5-10 million revenue annually for Tower, which declined to comment.
Gitit Pincas and Golan Fridenfeld 5 Feb 06 19:03
Tower Semiconductor (Nasdaq: TSEM ; TASE: TSEM) lays constant stress on the importance of new customers. The company devotes most of its efforts in this direction, in order to fill the capacity of its Fab 2 in Migdal Ha'emek.
Sources inform "Globes" that Tower has a new customer likely to contribute between $5 million and $10 million to its annual revenue. That customer is Atheros (Nasdaq: ATHR), which produces complete chipsets for wireless telecommunications, chiefly for the promising area of wireless LAN. Tower declined to respond to the report.
Market sources say Tower will produce several products for Atheros. Initially, these will be radio frequency (RF) products. Tower has a division that deals in analog circuits, mainly high-frequency transmitters and receivers. This is a separate division, set up following the restructuring that the company underwent last year.
Atheros competes with companies such as Broadcom (Nasadq: BRCM), Marvell (Nasdaq: MRVL), Conexant (Nasdaq: CNXT), and Intel (Nasdaq: INTL). Intel recently bought Atheros's Israeli competitor Envara for $40 million. At any rate, Atheros's main activity is the development of semiconductors for wireless telecommunications. It has a market cap of some $930 million.
Market sources add that Tower will not of course be Atheros's sole vendor. Tower CEO Russell Ellwanger recently said that the company had many customers with several suppliers, and that this was normal. He added that there were end-customers that obliged manufacturers to work with two suppliers, citing computer company Dell (Nasdaq: DELL) as an example.
Published by Globes [online], Israel business news - www.globes.co.il - on February 5, 2006
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