Tower Semiconductor Ltd. (NASDAQ:TSEM) Q3 2019 Earnings Conference Call - Final Transcript
Nov 13, 2019 • 10:00 am ET
Russell C. Ellwanger
using this technology, in the time of flight market mainly for face recognition .
We also continue our work with multiple customers on optical fingerprint solutions for under OLED and under LCD displays. As well as we are seeing good adoption of our stitched single die 300 millimeter substrate X-ray sensors.
Looking at our TOPS business, although the worldwide discrete market remains soft, the Automotive portion is growing for our Tier 1 customers and this has translated to an increased rate of new automotive co-develop product flows Aside from discrete, multiple -- multiple other predominantly customer per tire -- proprietary flows are moving along including advanced differentiated, micro display technology, DNA sequencing and others.
Looking at our co-developed, tunnel magneto resistant sensor technology, the overall market for TMR sensors is taking off across many different market segments, including industrial, automotive, consumer and medical. And signals the shift of the demand for this new advanced technology providing higher performance, greater sensitivity and less power consumption, hence higher efficiency sensors.
Third quarter 2019 for the following utilization rates. In Migdal Haemek, Israel, fab one, our six-inch foundry was down at 60%, with a decrease from the previous quarter, driven by the market slow down in power discrete.
Fab two, our eight-inch foundry was 80% similar to that of the previous quarter . Newport Beach, California, fab three was at about 50% utilization, predominantly due to the low present demand from data center and as mentioned earlier, expecting to ramp a bit in Q4 and then throughout 2020.
Our San Antonio foundry fab nine was at 55% utilization, an increase from the previous quarter. Looking at our TPSCo fabs in Japan. Starting this quarter we'll report our utilization as a percentage of all allotted foundry capacity allocation, according to the new manufacturing agreement .
Our eight-inch foundry business utilization was at about 50% rate similar to the previous quarter. Our 12-inch foundry business utilization was 60%, a 20-point solid increase over the previous quarter. We are now bottleneck constrained, albeit it is non-photolithography bottleneck .
This will be addressed with the new tools for the recently announced capacity expansion program in that facility, which should be fully qualified within the first half of 2020 .
This capacity expansion is already fully covered by existing customer demand forecast. Important to note, the available 200 millimeter capacity in Tonami and San Antonio as a present base should be well consumed towards our 85% utilization model in 2020, as a result of recent and present activities.
With that, I would like to turn the call over to our CFO, Oren Shirazi. Oren, please.
Thank you, Russell, and welcome everyone. Thank you for joining us today. I will start by providing the P&L highlights for the third quarter of 2019 and then discuss our balance sheet.
Revenues for the third quarter were $312 million, representing both year-over-year and quarter-over-quarter organic growth. We achieved strong results for the third quarter. Demonstrating quarter-over-quarter improvement in all our margins and