高塔半導體 (TSEM) 2013 Q4 法說會逐字稿

Thank you and welcome to TowerJazz financial results conference call for the third quarter of 2013.

Joining us today are Mr. Russell Ellwanger, TowerJazz CEO, and Mr. Oren Shirazi, CFO.

After management's prepared remarks, we will open up the call to the questions-and-answer session.

Before we begin, I would like to remind you that some statements made during this call may be forward-looking and are subjected to uncertainties and risk factors that could cause actual results to be different from those currently expected.

These uncertainties and risk factors are fully disclosed in our Form 20-F, F-4, F-3 and 6-K, filed with the Securities and Exchange Commission, as well as filing in the Israeli Securities Authority.

They are also available on our website.

TowerJazz assumes no obligation to update any such forward-looking statements.

Now I would like to turn the call to our CEO, Mr. Russell Ellwanger.

Russell, please go ahead.

Thank you.

Welcome to our third-quarter 2013 results conference call.

During today's call, I will review Q3 2013 performance, discuss our activities driving 2014 business and beyond.

Oren will then provide detailed financial summaries for our third-quarter financial results.

Our revenues in the quarter were $132.6 million, within our expectations for the quarter, and representing a 6% quarter-over-quarter growth.

While our revenues are below those of the third quarter of 2012, in the previous year, we had had a high level of Micron contractual revenues.

Excluding Micron, there is a year-over-year mid-single-digits growth.

In Q3, we had record number of new masks entering our factories.

Q1 to Q3 2013 as compared to the same period in 2012 showed a 34% increase, or over 3000 more new mask sets entering into the factories.

As previously explained, the photomask being released to the factory is the last formal step in the design-development cycle in order to start product manufacturing.

Each customer design has its own set of photolithography masks used to transfer their design pattern onto the silicon substrate.

The time from mask tape-in to the factory to volume manufacturing is typically one year, with a net volume life of 2.5 to 3 years from the tape-in date.

The 34% increase from Q1 to Q3 as compared to the previous year demonstrates effectiveness in realizing the customer projects and the sales revenue funnel.

In respect to design wins, which is the first stage of bringing new customer products into our factories, and typically taking approximately two years until reaching volume production, we realized a 6% increase year-to-date for 2013 as compared to 2012.

Design wins and the number of masks entering the factory are the most important indicators to predict revenue growth during the years to come, the latter being closely tied to revenue and utilization performance one year from now.

I would like to move to discuss the performance and the developments within our business units, wherein each one saw positive achievements during the quarter.

In our CMOS image sensor business unit, we continue to see growth from our leading European customers for high-resolution, high-frame-rate global shutter products.

This is a highly competitive field; however, most of the competition is not between us and other foundry providers, but rather between our customers.

There are many growth as well as new applications for industrial cameras, such as traffic control, 3D copiers and border control, that contribute to our overall market growth.

The continuous move from CCD to CMOS in the industrial sensor market also contributes to the growth of this area of our business.

In the x-ray market, we reported in the past on prototypes of several new sensors for medical and dental applications.

Those products are currently ramping nicely to production, are expected to contribute significantly to the CIS business units revenue next year and beyond.

Several new projects are in the pipeline, and considering the very long life of x-ray sensor products in general, we expect the products to be responsible for substantial incremental revenues over the next 5 to 8 years.

Our forecasted high-volume gesture control project is now in its qualification stage and moving according to plan.

The gesture activities are with name-brand top-tier customers.

It is expected to ramp to mass production next year.

We're also making significant steps in the high-end scientific and space sensor area.

Ib the beginning of October, we presented our technology to CERN Institute in Switzerland, and were personally congratulated by the CERN General Director for winning a $5 million contract to supply sensors to the new CERN experimental facility, known as ALICE.

We expect to penetrate more into the research and space area in Europe during 2014.

In addition, just last week, we announced that together with SRI International, we delivered the first radiation-hardened CMOS image sensor units to the Naval Research Laboratory for use on the solar orbiter Heliospheric Imager, known as SoloHI optical telescope.

SoloHI is part of the NASA and European Space Energy solar orbiter mission.

Planned for launch in 2017, the spacecraft is expected to study the sun from a closer distance than any other previous mission, and we are proud to be critically involved in this mission.

Although itself not a high-revenue project, it does recognize our technology leadership and brand and scientific grade rad-hard image sensors.

In our RF and high-precision analog business unit, we continued the ramp of our industry-leading SOI technologies for front-end modules, which is now being supplied into Tier 1 handsets.

We continue to see record tape-out volume and design wins in this space, creating a strong funnel for continued growth.

In addition to SOI, this quarter, we are sampling silicon germanium power amplifiers from our latest technology that includes an advanced Through-Silicon Via process that solves the problems associated with the handling of thin silicon wafers in a way that is unique in the industry and promises to offer our customers a cost and (technical difficulty).

This technology is expected to enter production in the first half of 2014, and will provide further growth opportunities over the next several years as we expect more power amplifier content to move from gallium arsenide to silicon technology.

I just completed visits to our elite customers for the aforementioned markets.

The projects, roadmap alignment activity and value-based relationships are well in place to achieve our mutual business objectives.

In our power management business unit, we continued our ramp of our 700-volt technology for LED commercial lighting, as I have discussed previously.

But we have now also added key customers in China, driven by the Chinese government mandates that dictate an aggressive rollout for LED lighting over conventional Edison bulbs.

In September, we announced volume production of DMB's AC direct LED driver using our 700-volt bipolar CMOS/DMOS power management process.

The rise of LED technology is affecting every part of the commercial lighting industry.

The demand for affordability and improved quality are driving the widespread adoption of LEDs, and this single technology appears likely to surpass all others in nearly every metric of quality and efficiency.

According to a 2013 report from Navigant Research, worldwide unit shipments of LED lamps will grow from 68 million in 2013 to 1.28 billion annually by 2021.

The markets for every other lighting technology will contract over that period.

TowerJazz is at the forefront at providing power solutions for driving LED.

In response to the strong customer pull for 700-volt technology, we have launched development on a next-generation process that will offer both the smallest die size, as well as an unprecedented level of integration for our customers in this market.

This quarter, we taped out an initial mask set that includes input from a lead customer and we'll be rolling out design kits by the end of this year.

We expect strong design activity from many customers in 2014 on this new offering.

On our 0.18 micron BCD platform, this quarter, we won the outsourcing of a major product line from a Tier 1 US customer that has the potential to become our largest power customer over the next 2 to 3 years.

We demonstrated here a 30% reduction in RDSon, whereby a lower RDSon translated to smaller die size and lower cost for our customers, and plan to productize this in design kits for our customers at the end of this year.

In our CMOS business unit, we shipped our first high-voltage CMOS prototypes integrated with advanced high-voltage ESD devices for a leading manufacturer of LCD drivers.

Products based on our new reduced-mass 5-volt low-VT technology for the mobile market have been successfully introduced and accepted by end customers and we are preparing a ramp-up of this technology.

We have started the development of more derivatives of our low-VT portfolio for analog applications targeted for the growing mobile market.

We have also released a low-power, mass-reduced 0.18 micron, 1.8-volt-only platform for the flat-panel display market, including optimized ESD solutions.

We are widening our offering for the booming Internet of Things, machine-to-machine market with enhanced solutions for low-power, energy-harvesting RF applications and new, nonvolatile memory solutions for sensor controllers.

Looking forward, we intend to continue developing our new technologies, expanding our portfolio for the high-voltage CMOS, Internet of Things, machine-to-machine and automotive markets, as well as the existing markets we are serving.

Looking at a few specific regions -- geographic regions that is -- from Korea, we received the first production order for a MEMS controller IC, which is expected to ramp strongly in 2014.

Korea is a major center of smartphone supply, and we see a bright future from this domestic company as they have a series of sensor ICs for mobile phones utilizing TowerJazz's processes, such as an accelerometer, proximity illumination sensor IC, along with the MEMS controller IC.

We taped out an autofocus IC from a company with over 30% market share of that market.

We received strong feedback on functionality, ESD and temperature characteristics.

They are running at high-volume production and these positive results bring is a foothold for demand transfer to TowerJazz in the very near future.

Wireless charging is the next rising star in the mobile industry, and the top smartphone company, Samsung, announced that magnetic resonance wireless charging technology will be integrated into their handsets in 2014.

We have two customers targeting this application; one is running prototype and the other succeeded in obtaining magnetic resonance type samples with an efficiency of 80% or more, based on a 0.18-micron BCD platform.

According to Korea Electronic News, this was the first market release for a magnetic resonance wireless charging technology.

In China, we held a TowerJazz global symposium with more than 100 attendees, many of them executives, representing 43 Chinese semiconductor companies.

We received positive feedback, a reflection of our successful penetration in the growing Chinese semiconductor market.

During the symposium, we held an MOU-signing ceremony with Shanghai ICC, launching a partnership level to expand our business opportunities in China.

Shanghai ICC is a nonprofit group formed by the Chinese government to help grow China's emerging IC companies.

Shanghai ICC has a large technical team and EDA licenses available to support this effort.

Through the collaboration, more and more Chinese IC companies will have the opportunity to use TowerJazz specialty technologies and professional foundry services.

In Israel, we held a special TowerJazz Global Symposium for a forum of Israeli senior executives and enjoyed an attendance from 61 companies.

This high attendance rate represents the interest and appreciation of Israeli executives in our effort to become the foundry of choice for Israeli companies' analog solutions.

In terms of other developments in the quarter, we continued to execute with a key customer to build full-flow infrared sensors for commercial market, which includes coinvestment from the customer and specialty equipment.

This activity is in full swing, both with the purchase of initial equipment, as well as with the development of the technology.

We are nicely poised with our customer to take advantage of what Max International forecasted to be an end market in excess of $5 billion by 2015.

During the quarter, we were proud to receive recognition from a long-term customer, On Semiconductor, an innovator in energy-efficient electronics, as its top foundry supplier.

The criteria behind this award included both manufacturing excellence and customer service parameters.

This latest recognition comes closely on the heels of four other recently-announced awards for TowerJazz from leading customers at an industry analysis firm.

Our team works hard to attentively listen to our customers' needs in order to deliver the best possible technology platforms and design enablement capabilities.

We truly appreciate the validation from On Semiconductor and their confidence in our ability to provide excellent manufacturing service to meet the needs of their next-generation products.

Looking at India, in mid-September, it was widely reported by the international press that the Indian Information and Broadcasting Minister, Manish Tewari, announced the cabinet decision of initial approval for plans to set up two semiconductor manufacturing facilities.

Our consortium did receive a formal government letter entitled In Principle Approval, upon which an updated submission was prepared and delivered to the government.

So in short summary, in looking at Q4, we guide a range of $133 million to $143 million, representing quarter-over-quarter growth nicely above the foundry market trend.

This is based upon continued progress in the third quarter from both a business perspective as well as strategic perspective and a very nice outlook going into 2014, based upon the increased momentum year to date of mask sets entering into the factory.

With that, I would like to hand the call over to our CFO, Oren Shirazi.

Oren?

Thank you, Russell, and hello, everyone.

As many of you know, we have made great strides in our efforts to strengthen our balance sheet to support expected near-term and longer-term growth opportunities.

So before discussing the income statement, I would like to start my financial review by providing a balance sheet analysis as of the end of the third quarter of 2013.

We strengthened our balance sheet both with the March $131 million loan extension agreement and with the $40 million rights offering which enhanced our shareholders' equity, which we completed in the third quarter.

We received aggregate proceeds of approximately $40 million, comprised of $22 million booked in the second quarter and then additionally $18 million booked in the third quarter of 2013.

The remainder of Series 8 warrants which were not exercised have expired on July 2013.

Earlier this year, our loan extension agreement signed in March with our Israeli lending banks improved the stability of our balance sheet by transferring short-term debt to long-term, reducing the principal maturities due in 2013 and 2014 by $75 million.

This initiative enhanced our balance sheet and our balance sheet financial ratios.

As can be seen in the filed reports, our net current assets, which is the amount of our current assets less the amount of current liabilities, increased from $129 million at December 31, 2012 to $160 million at September 30, 2013.

Our current ratio, which was 1.8X as of the end of 2012, now stands at 2.1X as of the end of the third quarter of 2013.

Our cash balance at September 30, 2013 included $141 million of cash and deposits, which was an increase from the $133 million we had at December 31, 2012.

Subsequent to the completion of the rights offering, our issued and outstanding ordinary share count as of the end of September 2013 was approximately 48 million in ordinary shares, of which approximately 18 million are held by the Israel Corporation Ltd.

The amount of capital notes still outstanding, held by our two lending banks and the Israel Corporation, has narrowed during the year from $26 million capital notes to only $8 million capital notes as of September end 2013.

As a result, the ratio of capital notes per share today is now only 18% versus 100% at the end of last year, resulting in that the overhang we had is now behind us.

We know that Israel Corporation is a long-term shareholder and a strong supporter of our long-term strategy and growth potential, and have publicly stated that they are interested in holding all of their shares for the long-term.

It is worth mentioning that Israel Corporation exercised 100% of its rights in our recent offering and invested $17 million in TowerJazz, demonstrating its belief in the Company's business plan.

Our shareholders' equity amounted to $172 million at the end of the third quarter following the $40 million rights offering.

I will now go into the P&L analysis for the third quarter of 2013.

Revenues for the quarter were $133 million, a 6% increase as compared with $125 million in the previous quarter and 18% improvement as compared to the first quarter of this year.

Revenues for the quarter are lower year-over-year only as a result of the Micron committed volume agreement in our facility in Nishiwaki, Japan, as announced in 2011.

Excluding this Micron reduction, revenues were slightly higher.

On a non-GAAP basis, gross profit and operating profit for the quarter were $39 million and $21 million, respectively, as compared to $57 million and $40 million in the third quarter of 2012.

On a non-GAAP basis, net profit for the quarter was $12 million, or $0.26 per share, as compared to $32 million, or $1.43 per share, in the same quarter of 2012.

Operating expenses in the quarter on a non-GAAP basis amounted to $18.4 million versus $17.7 million last quarter.

As a percentage of revenues, our operating expenses were 13.9% of revenues, a slight improvement over 14.2% of revenues in the previous quarter.

Our EBITDA for the third quarter was $21 million and for the 9 months ended September amounted to $62 million.

On a GAAP basis, the net loss for the quarter was $32 million, or $0.68 per share, versus $18 million, or $0.82 per share, in the same quarter of 2012.

In regards to our cash flow report, during the third quarter, we generated $23 million of positive cash from operating activities, we raised $18 million net from the fund-raising I mentioned before and invested $17 million in CapEx, increasing our cash balance by a net amount of $24 million, from $117 million at the start of the quarter to $141 million at the end of September, 2013.

I would like now to transfer the call back to (inaudible) Silverberg.

Thank you, Oren.

Before we will open up the call to Q&A session, I would like now to add a general and legal statement for our results in regard to statements made and to be made during this call.

Please note that the third quarter of 2013 financial results have been prepared in accordance with the US GAAP, and the financial tables in today's earnings release include financial information that may be considered non-GAAP financial measures under Regulation G and related to reporting requirements as established by the Securities and Exchange Commission as they apply to our Company.

Namely, this release also presented financial data which is reconciled as indicated by the footnote below the table on the non-GAAP basis after deducting depreciation, amortization, compensation expense in respect to options grants, and finance expenses, net other than interest accrued, such that non-GAAP financial expenses net include only interest accrued during this reported period.

Non-GAAP financial measures should be evaluated in conjunction with and are not substitute for GAAP financial measures.

The tables also contain the comparable GAAP financial measures to the non-GAAP financial measures, as well as reconciliations between the non-GAAP financial measures and the most comparable GAAP financial measures.

EBITDA as presented is defined in a quarterly financial release.

EBITDA is not a required GAAP financial measure and may not be comparable to a similarly titled measure employed by other companies.

EBITDA and the non-GAAP financial information presented herein should not be considered in isolation or as a substitute for operating income, net income or loss, cash flow provided by operating, investing and financing activities, per-share data or other income or cash flow statement data prepared in accordance with the GAAP and is not necessarily consistent with the non-GAAP data presented in previous filings.

I would like now to turn the call over to our operator.

Operator?

(Operator Instructions).

Jay Srivatsa, Chardan Capital Markets.

Yes, thanks for taking the question.

Russell, if I look at the comments you made, it looks like you are seeing some good growth in the business.

You have a lot of increase in mask sets entering the factories.

But yet your guidance appears to be slightly modest, meaning it doesn't seem to reflect the kind of growth that you would expect, given some of the comments you said about the industry (inaudible).

Can you try to clarify where the disconnect is and what you are seeing overall in the marketplace?

Sure.

I don't think there is a disconnect really at all.

As I tried to explain, the latency from the time that the mask set enters the factory until the portion that you start seeing the fulfillment of a volume ramp is somewhere between 6 months and a year.

So at this point, in some of the activities that we have, a lot of the mask sets, as I said, is coming in the front end module.

Those ramps are very, very much based upon design cycles of the end customer, not even our customer.

So if you were to look at the leader handset providers, there are certain times in the year where they cut in the new products for the new versions of their handsets, and you have to then be in line at the time that they ramp.

So I don't see a disconnect at all.

If you look at Q4, and if you think that there is a modest growth being talked about in Q4, certainly the growth that we are speaking about in Q4 is very, very much at the upper end of all of the guidance that has been shown from the whole foundry sector -- I mean really upper end.

So I think that itself shows a strong trend of what is happening in the company.

If you have others that maybe are forecasting no growth or negative growth, and we are still showing mid-single-digit in a midrange, I think that that is pretty decent.

But the major thing of import and to keep in mind is that the masks entering at the factory, providing that the customers that we are serving -- and they really are first-tier customers -- that is the last stage of the design cycle, and it is just a question then of the latency of the time to ramp.

So for the activities that we have, it is certainly not a question of the probability of if; it just becomes the latency of the time when the ramp actually occurs.

Okay.

In terms of the Indian contract, what is your sense in terms of the timing?

When do you expect the final approval to be done and when do you expect to start work on that contract?

That is a very, very hard statement for me to answer -- I mean, question for me to answer.

As I mentioned, our consortium did receive a formal -- I forget the exact term -- what was the term?

In principle.

In principle approval, at which we had another submission that had to go in.

The timelines for us are very well-defined.

The timeline for the government is not so well-defined.

So I really don't think that I can publicly state when I expect something that I truly have no oversight or control on.

I believe that it is a very, very positive step that the cabinet gave approval for the in principle approval itself to go out.

If you recall, several months ago, there were groups in the Indian government that were very against this project.

And it would appear -- more than appear -- it is a reality -- that the cabinet did decide to move forward.

So beyond that though, Jay, I mean, I really wouldn't want to give a timing on something that I truly don't have control over.

Fair enough.

Thank you.

Eric Reubel, Stifel Nicolas.

Hey, good morning, gentlemen, and thanks for taking the question.

Russell and Oren, it sounds like you have got some good momentum going on the mask figures that you gave us.

I wanted to ask if I could on Jazz Technology, I know you report those numbers separately, but was wondering if you could give us a highlight of revenue and EBITDA and cash at the subsidiary?

Hi, it's Oren.

I will try to do that, although since we intend to file Jazz financial statements very shortly, in a few days, so for now it is not public domain, so I don't want to enter into exact numbers.

But I can tell you trends, that Jazz revenues in Q3 were better than Q2.

Higher -- EBITDA was better.

And cash flow, you can even extrapolate that in even in the previous quarter of Q1 and Q2 that Jazz had lower revenues and lower EBITDA than this quarter.

Jazz was not positive net cash flow, meaning cash from operations was higher than even the CapEx and covered everything, so of course this quarter will be even better.

Okay.

Thanks for the color, guys.

That is it for me.

Thank you.

(Operator Instructions).

George Burmann, J.P. Turner & Company.

Good morning, gentlemen.

Thanks for taking my call.

You are very welcome.

I have got a quick question.

The depreciation and amortization charges that are occurring seemingly every quarter, I see that they dropped from $38 million to $35 million.

Is there a timeframe when they would be reduced more material, or are we looking say next year at another $120 million worth of depreciation and amortization -- if I just take it times four or a little bit less?

Yes, so, thank you.

Indeed, this is reducing over time.

It was more than $40 million a quarter in the past, and indeed this quarter only $35 million.

And indeed there is a trend that it is going -- and reduced of course because naturally this is a result of the establishment of Fab 2, which was expensive, compared to the CapEx run rate that we have today.

So it is going down gradually.

If you are asking about the step function, so a big step function is expected in Q2, Q3 2014, to go down to the level of about $25 million, $27 million a quarter.

And from the start of 2015, another step function towards $20 million, $22 million a quarter.

Okay, great.

Next question, maybe to you Mr. Ellwanger.

In terms of your ramping of products, what is your capacity utilization right now?

Do you feel you have sufficient fab space, in particular in light of recent speculation in the press that you might be looking at possibly buying another fab from a Japanese seller?

Okay.

So, with regard to the speculation, I certainly -- we don't comment on that.

I will not comment on that.

But on present utilizations, the Fab 1 is running very high utilization, sitting about 90%.

But just for clarity, when we say 100%, that is the absolute maximum that a fab can do.

Some foundries or semiconductor companies will report quarters of 130% or 140%.

It is because they take a lot of overrides in their utilization model.

If I say 100% or within the Company we talk 100%, that is the maximum that a fab can actually put out.

But a fab could never run at that level, at its maximum, because your cycle time becomes crippled.

So our model is to run somewhere between 88% and 92%.

Just keep that in mind.

I am sorry to have to put that clarity there, but it is somewhat important.

So the numbers that we have is right now Fab 1 is running somewhere near 90%, Fab 2 is running somewhere about 60% and Fab 3 is running somewhere about 65%.

So certainly there is the ability to ramp in those three factories very strongly.

Nishiwaki is running right now lower than any of those three.

It is a little bit hard to say what the exact utilization is because the full wafer count there is based upon DRAM, not based upon logic, and we have also some MOSFET flows that are in there now.

But at Nishiwaki, we have ample room for growth in Fab 2 for the image sensor and the power management, right now we have ample room for growth.

And in Fab 3 to support everything that we believe will be ramping in the very short term on the SOI, we have the room for that growth.

Did that answer your question, George?

Yes.

Are you generally happy with the way the Nishiwaki facility is moving into the Jazz family?

I know that you had signed a very nice agreement with Micron to cover some of the initial startup phase, which is running off now.

I am wondering if you are pleased with sort of the workforce that you have there.

And also, the Japanese yen seems to be helping you, especially in international sales.

As far as the staff, the headcount, everyone that is there, I think it is an extremely good group of people.

The engineering capability is very, very strong, has been from the start.

The transfers have gone nicely.

Everything that has been happening is very good.

We have very nice traction into that factory from non-Japanese customers, so that is moving nicely.

The factory has created good cash for us.

It still is creating cash, although it is on the Micron contract now reaching a point of getting closer to breakeven.

So to date, everything has been very, very nice at Nishiwaki.

I can say that we did expect or could have expected quicker traction from Japanese customers themselves, and that we have not realized to the rate or the speed that we had thought that we would.

Okay.

Thank you very much.

You're welcome.

Thank you.

There are no further questions at this time.

Mr. Ellwanger, would you like to make your concluding statement?

Sure.

So, thank everyone that, again, continually shows interest and attention to the Company.

I certainly think our customers for the trust in us as a long-term partner, investors for belief in our management and our business model.

And as always, we are very grateful for our employees for capability, dedication and passion, which did drive us to be number 1 specialty foundry in the world.

As Jay had mentioned in his question, we have had a very, very strong momentum of masks entering into the factory.

Those masks will drive into revenue.

It has, again, somewhere of a 9-month latency on average before it starts to ramp to volume, 18 months before they reach volume.

So we are very, very excited to see the traction that we are getting in many of our sectors, if not all of them, and to realize that growth and to show the movement there into 2014, expecting then the second half of 2014 to have very strong impact from this 34% increase that we saw year-to-date in masks entering the factory.

So we are very excited about where we are at and where we are going.

We continue to set for ourselves high goals, and our very big focus right now, as George had brought up in his question, really deals with not non-GAAP numbers, but really with GAAP net profit.

So we have reached a certain size, we have a good momentum, we have things in place.

Our focus now is a sustainable achievement of net GAAP profit, and we are taking actions to be driving that.

We have two big events coming up in the very short term, one in the very short term.

Next week, on November 12 and 13, we are holding our TowerJazz Global Symposium very close to our facility in Newport Beach.

It's going to be held within miles of it in Irvine at a very nice facility.

The 12th being a day specific to aerospace and defense activities and customers, and the 13th being the commercial day.

I will be opening the 13th with a keynote, talking about activities in the Company, what we are focused on, what our philosophies are.

And certainly everyone on this call or everyone that would listen to the transcript is very, very welcome to go into the website to register for this conference and to come to Irvine and visit.

I would be happy to talk with anyone on a one-on-one, and the entire staff technical staff will be there interacting with our customers.

You could view the interactions we have with our customers and see the type of relationships that we have.

We also have a few customers giving presentations, and you can see the quality of those that are giving presentations.

And then the second event is on the East Coast.

January 14 through 16, we will be presenting at the Needham Conference.

I am not sure which of the exact days we are presenting, but we will be there between the 14 and the 16.

And anyone who would be located on the East Coast, be very, very happy to set up a one-on-one, either independently or to meet with you during the conference.

So two opportunities for interacting with us directly, both of which we really solicit you to get involved to learn more about the Company, as we really believe the more that you learn, the more that you know, the more convinced you are over the strength that we have and where we are at present and where we are going in the future.

So again, thank you very, very much.

Thank you.

This concludes the TowerJazz third-quarter 2013 results conference call.

Thank you for your participation.

You may go ahead and disconnect.