"I'm excited to write Tower's next chapter"

• Published date: 31 March 2024
• Author: Shiri Habib-Valdhorn
• Publication title: Globes (Rishon LeZion, Israel)

Even today, after almost two decades as CEO of Tower, Ellwanger finds the chip company inspiring. At age 69, he has no intention of retiring. "Home-work balance? Work is my balance in life," he says. "At work, I grow, instill values that I believe in. I decided not to retire. But at some point the board will kick me out, or what will happen is what sometimes happens to people my age, that they die after living a full life. But you only live once, so why retire?"

It's hard to imagine a scenario in which the Tower board of directors will have any cause to kick Ellwanger out. The American CEO came to the company at a difficult time for it, when it was burning cash and it was not clear whether it would be able to repay debts to the banks that had soared to over $500 million. He led the company to debt settlements with the banks and repayment of the debt balance, to growth, a switch to profitability, and expansion through acquisitions. The pinnacle was supposed to be the sale of the company to Intel for $5.4 billion, a deal reported in February 2022.

In the end, the Intel deal never took place, after the Chinese regulator delayed his decision and the deadline for completing the deal (after an extension) passed last summer. Tower remains an independent company, but it is currently traded at a share price 38% below the price it was due to receive from Intel, and its market cap is $3.7 billion. From Tower's annual financial statements we learn that between 2103 and 2022, Ellwanger received 390,000 restricted shares. Assuming he has not sold them, then at the Intel deal price he would have received a maximum of $20 million. During his time at the company, the return on its shares has been in the thousands of percentage points.

When did you realize that the deal wasn't going to happen?

"I worked to make it happen almost until the final days. I tend to be an optimistic person, and I saw no legitimate reason for China not to approve the deal. I thought that we would receive approval, and we provided all the information that they requested. I suppose that when we didn't hear from them a day or two beforehand, we understood that the deal wouldn't happen, and that another extension would be useless, because it was a political decision.

"At an early stage of the deal, I pushed to transfer production capacity to an Intel fab, and that was a very wise move, because without it we wouldn't have been able to retain the customers (after the deal was cancelled, Tower signed an agreement to use an Intel foundry in New Mexico, S. H-V.). That was one of our biggest achievements in 2023."

Ellwanger says that Tower learned a great deal from the process with...