Clal Finance sets $2.40 target for Tower - Tower Semiconductor has a new contract for audio processors with Taiwan's Modiotek

Clal Finance Batucha analyst Benny Dekel says that Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) "Is about to see a change in direction". He gives the share a "Buy" recommendation at a target price of $2.40, 39 percent above its market price.

Dekel says that Tower is benefiting from growth in the semiconductor market, which grew 9.8 percent in 2006 and is predicted to grow 10.8 percent in 2007. He says that Tower will report a positive cash flow from current operations for the fourth quarter of 2006, in line with the company's guidance.

Tower has a market cap of $150 million. The company announced a new contract today with Modiotek Co. of Taiwan to produce next-generation audio processors for cellular telephones using Tower's 0.18-micron technology. The size of the contract was not disclosed, but a market source estimated it at $5 million.

The mobile audio platform (MAP) S32i family of processors include all the functional components for a telephone, making handsets easier and cheaper to manufacture. Tower said over ten million handsets worldwide are already equipped with the company's processors.