Tower Semiconductor Ltd. (NASDAQ:TSEM) Q3 2019 Earnings Conference Call - Final Transcript

Nov 13, 2019 • 10:00 am ET


Tower Semiconductor Ltd. (NASDAQ:TSEM) Q3 2019 Earnings Conference Call - Final Transcript


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Russell C. Ellwanger

millimeter capacity expansion announced last quarter positions us for good growth throughout the year.

Growth in this segment for us has been a function of market share gain in both US and China as well as overall market growth with expanded RF front-end content in 5G handsets, which are expected to be deployed, starting in 2020, and anticipated to continue and accelerate through the next several years.

In addition, we are working on breakthrough RF technologies such as RF MEMS being the only foundry to select -- successfully deliver RF MEMS having delivered into many millions of handsets together with Cavendish Kinetics. With Qorvo's recent purchase of Cavendish Kinetics, we now work directly with the market leader with this leapfrog technology rendering higher assurance of strong market adoption over time.

Looking forward to Q4 in the infrastructure segment, our strong SiGe market share optical fiber transceivers has led to growing orders for 5G infrastructure where optical fiber connections are being upgraded from a 10 gigabit per second to a 25 gigabit per second throughput.

These orders will help offset any further inventory related downside from the data center market, stabilizing our silicon germanium revenue. According to our customers, the the excess data center inventory should be consumed within the next three months to five months. Hence, we expect to see a rebound as we move into 2020 as well as the resumption of growth in data center silicon germanium shipments .

Longer term, we expect that our silicon photonics platform will have strong growth contribution. This platform is currently in volume production, expected to reach significant volumes over the next years being integral to 400-gigabit per second connection speeds.

We are well positioned to demonstrate strong market leadership, as the cycle platforms ramp . Our power management business has seen strong quarter-over-quarter growth mainly due to a strong ramp in new electrical vehicle battery management products.

Looking further out to 2020, the expanded 300 millimeter capacity will position us for growth in our highly differentiated 65 nanometer BCD technology. We have a good pipeline of design wins from Tier 1 customers ranging from data center to mobile applications .

We have also gained multiple wins in our high-voltage technologies, 140 volt RESURF and 200 volt SOI, which expands our available market to a voltage range not previously covered by our technologies providing further opportunities for market growth.

Looking at our sensor business, we have new projects in the pipeline with large customers on our 65 nanometer global shutter platform that we expect to materialize towards the end of next year, while sales of the existing products are still growing. On those soft year-to-date, the industrial sensor market is beginning to recover and we foresee double-digit growth through 2020.

Our recent announcement of our wafer stacking backside illumination flow connecting a top thin BSI imaging wafer to a bottom CMOS wafer on a 65 nanometers 300 millimeter technology has generated much interest. We're in various engagements with significant customers for projects