Thank you and welcome to TowerJazz's Financial Results Conference Call for the Third Quarter of 2015. Before we begin, I would like to remind you that some statements made during this call may be forward-looking and are subject 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 Forms 20-F, F-4, F-3 and 6-K filed with the Securities and Exchange Commission, as well as filings with the Israeli Securities Authority. They are also available on our Web site. 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, Noit. Welcome to everybody and thank you very much for joining us today. Our third quarter results demonstrate strong execution of our business strategies, achieving record revenue of 244.2 million, representing 23% organic, meaning the revenue without Panasonic and 8% overall third quarter year-over-year growth. Gross margins rose having achieved a non-GAAP gross margin of 38% and we believe to be on-track to achieve our announced non-GAAP fourth quarter gross margin target of 40%. We achieved a record EBITDA of $63 million, up from 37 million or 70% improvement as compared to the third quarter of 2014. Third quarter GAAP net profit was $14 million versus a loss in the third quarter of 2014 and up from the $7.8 million of the previous quarter or 74% quarter-over-quarter increase. We have created a business and operational model which enables sustainable GAAP profitability going forward and nominally continued GAAP profit growth. Looking ahead, our fourth quarter mid-range guidance is 252 million, representing a 21% organic and 7% overall fourth quarter year-over-year growth. Our fourth quarter guidance leads the industry in growth and as well breaks the 1 billion annualized run rate target which will be a significant milestone for our Company. Our industry-leading organic growth is driven by design wins, which lead to new mask sets entering the factories, which in turn drives volume revenue. We continue to increase in both measures being at record levels year-to-date versus the previous record for 2014, a total of over 400 design wins and over 70,000 masks entering the factories both up 13%. Also in addition, we reached prepayment agreements with three key customers for 2016 and some beyond for capacitor reservation totaling $45 million. Based upon the design win and mask set indicators customer forecast and prepayments for its capacitor reservation, we're…

Thank you, Russell. And thank you all for joining us today. Our third quarter financials resulted in all time record figures on many fronts including record revenue, record EBITDA, record non-GAAP margins and record shareholders’ equity. In addition we again achieved an increased net profit on the bottom-line. On revenues, we recorded the highest quarterly revenue in our history. The year-over-year organic growth excluding Panasonic was 23%. This growth dropped to the bottom-line while improving all our margins and demonstrating significant non-GAAP margin enhancement with a $26 million incremental year-over-year gain in profit and the quarter-over-quarter continued increase. We also reported a substantial GAAP margin increase and GAAP net profit of $14 million, cash flow was achieved while further building our strong balance sheet and reporting record shareholders; equity of $325 million. As we already discussed previously, we continue to experience very large customer demand which exceeds our current manufacturing capabilities hence we continue to execute on the actions we previously discussed in order to increase our effective capacity. Customer product’s cross qualifications between our world-wide manufacturing facilities, mainly between our Fab2, Fab3 and Tonami factories as well as capacity expansion including throughout reservation fees from major customers, some of those investments are already in progress and are partially recorded in our financial basket fixed investment funded by customer advantage. Now I will go into the detailed analysis of the P&L. As I mentioned, we achieved record revenue of $244 million for the quarter, based on 23% organic growth which enables a strong margin increase. Growth profit on a non-GAAP basis for the third quarter of 2015 was $94 million representing 38.3% gross margin, a substantial improvement in our gross profits from $68 million or 30% reported in the third quarter of 2014 and substantially higher than the 26.7% in…

Thank you, Oren. Before we open up the call for the Q&A session, I would like now to add general and legal statements to our results in regards to statements made and to be made during this call. Please note that the third quarter of 2015 financial results have been prepared in accordance with U.S. 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 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 footnotes below the table on a non-GAAP basis after deducting; one, depreciation and amortization; two, compensation expenses in respect to option grants; and three, finance expenses net other than interest accrued such that non-GAAP financial expenses net include only interest accrued during the reported period. Non-GAAP financial measures should be evaluated in conjunction with and are not a substitute for our GAAP financial measures. The table also contain the comparable GAAP financial measures to the non-GAAP financial measures as well the reconciliation between the non-GAAP financial measures and the most comparable GAAP financial measures. EBITDA is presented is defined in our quarterly financial release. EBITDA is not a required GAAP financial measure and may not be comparable to a similarly titled measurement provided by other companies. EBITDA and the non-GAAP financial information presented herein should not be considered in relation 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 GAAP and is not necessarily consistent with the non-GAAP data presented in previous filings. I would now like to turn the call over to the operator, operator?

Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions] The first question is from Cody Acree of Drexel Hamilton. Please go ahead.

Russell maybe you’ve got a lot of things going on in so it sounds like positive until out to 2016. Can you maybe rank order the growth expectations of your different divisions or even some of the subdivisions and give any quantification that you can as far as what your growth is expected for those segments in 2016?

Certainly, let me just add one clarifier to begin with, the Panasonic revenue that we ship we do not breakdown into specific business units as that would be talking much too much about the specific demand in markets of a single customer, so the circa 90 million to 105 million per quarter revenue from Panasonic is excluded in any of the percentages that I gave you. The third-party growth of the TPSCo factories will be included in the numbers that I gave you. The RF SOI we expect we have seen a doubling of the revenue there. We expect to continue to see a doubling of the revenue at least within the RF SOI. The silicon germanium will be nice double-digit revenue increase, CMOS image sensor I talked about previously I think if we look at the revenue growth of the CMOS image sensor that should be somewhere in the 50% to 60% growth in the ’16 versus ’15 out tops business will be strong double-digit growth, power management if we continue to execute as we have been we’ll also see very strong growth on the multiple tens of percent and the aerospace and defense should also see mid double-digit percent growth.

Maybe Oren as you look at the mix of revenue that’s going into TPSCo of course ex-Panasonic, could you just talk about the margin benefit as you are not just driving new customers into TPSCo but you’re transferring some product from your existing facilities how that impacts or may benefit your overall margins?

Yes, so basically it is for the Tonami and the ready fabs of TPSCo you should expect 50% incremental gross profit, operating profit from each incremental revenue for the other fab of course it’s better margins recorded the most advanced fab and in the terms of flows there so, so there you should expect margin to be 75% to 80% incremental margin from each incremental revenue.

And Russell with your dedicated capacity with some of the reservation fees that you brought in, could you just talk a bit about how that came about, how those fees came about, how those discussions I guess developed? And is this capacity only to be used for those customers or do you have that available for others in the future? And then you talked in your press release about I think you said thus far are you expecting further reservation fees in the future?

So two different questions and I will try my best to answer both, as far as the reservation fee we had a certain baseline consumption that we continue to give, we continue to supply to whatever customer it is. As demand grows much higher than expectation, in the case of one customer demand really grew very-very high and we had asked for a reservation fee to help enable capacity growth in our TowerJazz organic factory. In the case of the other customers, it really -- it might be used also for some organic growth but it was really also the fact of requesting a higher wafer demand and had been in the past during a period of time that capacity is constrained. And what is the big point of this is it’s the following if you have a big increase in growth and you’re saying that it will really take off in the third-fourth quarter of let’s say 2016, to allow that growth for any given customer it means that you’re stopping activities with a different customer if the forecast that the customer has is not met it’s very-very difficult in our business which is a strong analog business to replace many thousands of wafers per month by somebody else in the short-term. So the reservation fee was really a way that the customer could guarantee that we would give them a large increase in incremental wafers and a way to product us that if that demand isn’t going to be used at least some portion of the fixed will be covered because we can’t on design fill that capacity someone else if we plan to give it to somebody else three or four quarters from now. And hopefully that’s a clear answer for you Cody, it’s a good question, it’s an accurate answer I hopefully it is understandable. [Multiple Speakers] as far as on the future, yes we do.

And then lastly Russell I actually just saw a story when I was reading a paper where you were mentioning some potential opportunities in China. Could you just talk about any discussions you have or just what’s your thoughts are particularly given China’s recent consent for internal semiconductor development?

So I didn’t read the article that you’re referring to I am probably familiar with the interview, but I’ll basically say what I had said during that interview there are certain countries such as China that -- and especially China to where there is many initiatives government driven initiatives to increase their own semiconductor capabilities. Many municipalities are buying to grow factories to grow capacities to bring in certain technologies. What I had said was that there are opportunities that many of which are not at a stage to have any announcements on specifically but certainly opportunities that we’re aware of to where there are desires for factories to be built off of technologies that we really have a lot of IP in. And that one of the beauties of China is that if there is a government decision to go a certain way it can go very-very quickly because the government policy is really driven through the rest of the county without a lot of bureaucracy to have to go through without bureaucrats in certain ministries that maybe have veto powers over the ministry direction. So that’s really what I said.

The next question is from Richard Shannon of Craig-Hallum. Please go ahead.

Maybe I’ll follow-up on the first question asked by Cody regarding kind of thinking about growth rates for next year, you gave us some -- in the most case some nice numbers to deal with here. Russell any way that you can bake that down into an overall growth number you think is achievable or even kind of a stretch goal I don’t know how you want to think about it. Is there any way you can bake that down to an overall single number for us?

We might when we release Q4 and give a target for 2016 revenue I am certainly not going to give one at this point. But big businesses that we’re sitting with those are the amounts of gross that each of those businesses can be doing and now we think that they have, but no I said that we have very strong demand for 2016 that we would foresee certainly nice growth from ’16 versus ’15 but when we released Q4 at that point we’ll give our targets for 2016.

You’ve given us a lot chew on there so we’ll chew on that for the next quarter. A couple other questions from me, wondering if you can help us understand your CapEx expectations both for the current quarter and then into next year and if you can characterize it between more maintenance versus kind of growth CapEx, that’d be appreciated?

So basically we are consistent with what we said in discussing the past in this conference call even last time we are pretty much placed at $27 million-$28 million-$29 million a quarter of CapEx which most of that is sustained and small part of that is for new tools to increase capacity. In addition to that what we announced previous time is that we dedicated between approximately $15 million for phase two and 15 for phase 3 so together it’s $30 million for the coming two-three quarters altogether, okay so not every quarter. So total of $30 million for capacity increase in some of the areas where we like Russell mentioned face excess demand over the existing capacity mainly the point is in aluminum capacity both in phase 2 and phase 3. In addition to that comes this new update about $45 million which is actually part of that what already disclosed at the press release that we did about a $30 million for one of the customer and now we updated this number of 30 to 45 but this is customer funded. So, it is very nice increase in the capacity but it’s not from out of pocket money.

Maybe back on the topic of capacity reservations you mentioned having three customers in total of 45 million in total reservations to-date. Do you expect any other customers to be giving reservations here or is it the three customers which I am assuming are in the RF space?

There might be other customers that would get involved. We think there might be more money involved in general in additional reservation fee than it might be from more customers as well.

Russell I may have missed the specific wording here but I think you mentioned relative to your tops business that you saw a transfer of RF SOI technology from a leading systems OEM. Curious if you can clarify what’s going on there and specifically is this a new customer for this kind of technology or is it just share gains at the current one?

Certainly for TowerJazz families TowerJazz TPSCo it’s not necessarily a new customer it’s an absolute new activity. And so there are other activities that we do with that customer, but this year is an activity that we had not done before to where from the SOIs done internally by that customer.

One last question from me and Russell I think I heard you say in your prepared remarks that your expectation is hitting your 40% gross margin on a non-GAAP basis for the fourth quarter then?

Yes sir.

And it would reasonable to expect a kind of a seasonally down first quarter and such that number might be down sequentially then?

No I don’t I mean we didn’t disclose anything about Q1 but you’re correct that generally speaking there is the seasonality effect but this time we have this increase of volumes mainly in TPSCo which Russell referred and mentioned about or disclosed qualification of power and other growth in TPSCo, so of course we should expect increase from the TPSCo third-party but I don’t believe we gave any comment about what will be the total.

The next question is from Marc Estigarribia of Chardan Capital Markets. Please go ahead.

Just maybe this might be a question for Oren but in terms of looking at the balance sheet just getting a sense of the cash flow cycle, seems like the payables are manageable and the internal levels are improving. Can you just comment on the rising receivables over the past year trends and your policy with regards to DSOs?

Yes so I believe the accounts receivable are going to up in the same rates like the revenue generally speaking in the industry or at least in our business payments terms are between 30 to 45 days average is around 40 days so where we have accounts receivable of $120 million against revenue run rate of 244 so it’s actually by coincidence exactly upward so it’s exactly 45 days so we are really it’s very good where the number stand now. On the other hand with vendor’s rate, the payment term is usually 90 days.

And in terms of depreciation if we look at the new run rate on the back of the new policy last year obviously the run rate was around $20 million a year now we’re looking at $150 million. Is that sort of the ballpark of where we should expect going forward on the depreciation?

Yes, you should. The expectation is that it will remain in this new low level because on the one hand there will be some reduction cost reduction in that because past expenses was better than investment finished their depreciation but on the other hand we do invest some capacity now like I mentioned responding to the first question. So I think it’s very reasonable assumption to assume a flat 36 million or 37 million a quarter, so 150 for the year as you mentioned.

And in terms of the potential dilution of securities over the next year, there is a little bit of difference between basic and diluted. Can you just give us a little color I think the Series F bonds are set to convert by this period that we are in but any color there that you can provide within the remaining shares over the next 12 months would be helpful?

Yes of course, so actually we did direct it in the press release below one of the tables below the GAAP actually the main P&L get the financial statement profit and loss below that there is an explanation about it but I can summarize it and say that we have a currently outstanding 79 million ordinary shares and we have 3 million share that will result in from a conversion of bond Series F which is all new I mean everybody knows about it it’s from five years ago and this should be converted to equity because that has a $10 point something conversion rate and so 10.6 so everybody assumes that it would be converted like you said of course. And so 79 plus rate is 82 apart from that there is no update actually this is also not an update but apart from that there is nothing new we just have the 6 million shares underlying Jazz bonds that we issues almost two years ago we have 13 million in underlying Uozu pipeline employee stock option and direct stock option including warrants which were issued a long time ago. And the only other thing is 3 million rest of the years of capital notes at the time many years ago we had like 27 million capital now it’s only 3 million. So actually all this component have no update since a year ago so no change.

And just one last question with regard to sort of a macro headwind here possibly with regards to rising interest rates in the U.S. and further strengthening of the dollar as versus other countries actually easing or thinking about easing. What impacts are you sort of projecting or how are you handling the potential macro headwind of a stronger U.S. dollar given the incremental growth by geography of Tower?

So for us a stronger U.S. dollar is good and the current trend is very good for us for example $100 million of our expenses are denominated in the Israeli shekel so the fact that the dollar moved from ILS350 to now ILS390 is a very good contribution for us. Also against the Japanese yen the third-party revenues are denominated in dollars of course because it’s mainly U.S. companies in the market and the ASP in the market is denominated in dollar. On the other hand the expenses therefore the Japanese employees and all the expenses are in Japanese yen. So strengthening of the dollar is a good trend for us now.

The next question is from Lisa Thompson of ZACKS Investment Research. Please go ahead.

I would like to just talk a little bit about how next year’s quarters are going to fall out. Now that you said seasonally Q1 is down but based on what you know now kind of how is the revenue going to ramp during the year?

Again an overall target or forecast for 2016 we’ll give at our Q4 release. In looking into Q1 right now we really have a very-very strong demand I would not expect that we would see any seasonality in Q1 whatsoever. If we don’t see seasonality in Q1 and I just talk about growth in 2016, one would expect that we’ll see growth quarter-over-quarter but I haven’t or the Company has not really released will it be monotonic quarter-over-quarter growth and whatever but we certainly see growth in ’16 versus ’15 and at this point we’d really be surprised if Q1 was lower than Q4.

And then in the following quarters so, is it going to be steady growth or based on what you know does it accelerate at this time…

We have not announced that yet and we won’t until we release Q4.

And then you’ll kind of go through how you see the year rolling out?

Usually we do yes.

The next question is from David Duley of Steelhead Securities. Please go ahead.

A couple of questions from me, as far as the prepayments for capacity the 45 million that you’ve received how much was spent in the third quarter and how much would you anticipate of that would be spent in the fourth quarter to increase capacity?

Spent, no, so, we received and you can see it in the balance sheet an amount of approximately 15 million during the third quarter but still we did not spend any of that because this is like a prevent okay so we got it and we spent in terms of we issued that the old the purchase of those older CapEx but from cash point of view no, we still did not pay anything as of September.

So as of September you had 15 million of the 45 million in hand and now you have another incremental 30 million and so is that the way to look at it?

Yes.

And you haven’t spent any of it yet it’s going to be deployed over the next couple of quarters?

Yes. Just one point of note nothing from the 45 million is in revenue again oaky this is customer advantage presented in the liability of the balance sheet did not affect anything in the P&L or in the revenue all right?

Right.

Yes.

And you mentioned some of your customers were starting to adopt your silicon germanium process for the power amplifiers. I was wondering is that a new trend from all of your customers, or what is the rationale that they’re doing that and perhaps may be just talk about what the trends are there?

Is it a trend from all of our customers? No, I believe that is something that the most advanced customers are very interested in and for a variety of reasons. There is certainly a benefit if you can use a silicon germanium which is other than they are deciding itself to CMOS based technology as far as what you can integrate on that wafer. So if you have silicon germanium you can integrate, control and you can integrate many other RF functions that is very difficult to do on a gallium arsenide wafer. So one trend of this is really for the big benefit of more in-ship integration it’s very possible to have a switch PA and control on the same basic design providing and what is the output capability and need of the power amplifier, so that’s I think probably the biggest drive is to be able to have higher integration levels and then secondly fundamentally a silicon germanium technology is less expensive than a gallium arsenide technology.

So I guess to summarize then your big RF customers who are definitely talking a lot about further integration on the conference calls in multiple different parts of the puzzle are going -- this is a longer term trend that you should see from your more advanced RF customers that do a lot of integration I guess is the way to say it?

Yes, we would believe so.

And could you just remind us roughly for 2015 what -- you wanted the segments of growth or the four or five buckets that you like to talk about your business. Could you just give us a rough idea of the percentage of total revenue that they each account for in 2015 or any sort of guess that or guidance there you could give us would be great?

Sure, so again this is excluding Panasonic, so we’ll be dealing with some more circa of $600 million off of that you would have RFC masks somewhere about 30%, the silicon germanium somewhere about 15%, CMOS image sensor upwards to about 15%, tops somewhere 15% to 20%, power management shy of 10%, the CMOS mixed signal a bit shy of 10% and the aerospace and defense hitting somewhere about 5%.

And then final question from me is in the past you’ve talked about market share in the SLI business. Could you just give us an update of where you might think you will be in that there at the end of 2015? And help us understand the size of the market and how fast do you think the market is going to grow?

It’s a question I am a little bit unprepared to answer as far as how much I think the market is going to grow. I think right now the size of the market is somewhere between 400 million and 500 million to 550 million in that range. It certainly is growing and it’s growing as a function of content. There is still some RF switches that are done in gallium arsenide p-HEMTs maybe legacy I would believe probably somewhere about 15% to 25% and I really don’t know the exactly number would still be older designs that are done in p-HEMTs. But I think there is very-very little new tape outs that have been done if any in the past one to two years in anything but SLI. Where do I think our market is right now probably we’re sitting by run rate by shipments somewhere between 30% and 40% in Q4.

There are no further questions at this time. Mr. Ellwanger would you like to make you concluding statement?