10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2014
Or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-32832

Jazz Technologies, Inc.

(Exact name of registrant as specified in its charter)

Delaware	20-3320580
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4321 Jamboree Road Newport Beach, California	92660
(Address of principal executive offices)	(Zip Code)

(949) 435-8000

Registrant’s telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes xNo o

(Note:  As a voluntary filer not subject to the filing requirements, the Registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months).

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes xNo o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer a non-accelerated filer or a “smaller reporting company”. See definitions of “large accelerated filer” and “accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting companyo

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format permitted by General Instruction H(2).

JAZZ TECHNOLOGIES, INC.

Table of Contents

PART I — FINANCIAL INFORMATION			1
	Item 1.	Financial Statements	1
		Unaudited Condensed Consolidated Balance Sheets	1
		Unaudited Condensed Consolidated Statements of Operations	2
		Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)	3
		Unaudited Condensed Consolidated Statements of Cash Flows	4
		Notes to Unaudited Condensed Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
	Item 4.	Controls and Procedures	11
PART II — OTHER INFORMATION			12
	Item 1.	Legal Proceedings	12
	Item 1A.	Risk Factors	12
	Item 6.	Exhibits	12
SIGNATURES			13
Index to Exhibits			13

i

PART I — FINANCIAL INFORMATION

Item 1.                      Financial Statements

Jazz Technologies, Inc. (A Wholly Owned Subsidiary of

 Tower Semiconductor, Ltd.) and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

	September 30, 2014		December 31, 2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	70,340	$	51,351
Receivables:
Trade receivables, net of allowance for doubtful accounts of  $0 at September 30, 2014 and December 31, 2013		25,886		20,426
Other receivables		4,723		9,835
Inventories		30,762		26,297
Deferred tax asset		3,944		3,846
Other current assets		1,990		1,303
Total current assets		137,645		113,058
Long-term investments		1,336		778
Property, plant and equipment, net		73,690		78,345
Intangible assets, net		25,109		28,302
Goodwill		7,000		7,000
Other assets		3,887		3,333
Total assets	$	248,667	$	230,816
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of debentures	$	41,563	$	--
Accounts payable		24,543		15,290
Accrued compensation and benefits		7,045		5,985
Deferred revenues		2,082		2,492
Other current liabilities		6,861		5,205
Total current liabilities		82,094		28,972
Long term liabilities:
Long-term debt from banks		19,100		19,100
Notes		42,229		81,181
Deferred tax liability		4,510		2,429
Employee related liabilities		2,551		2,551
Other long-term liabilities		13,332		12,780
Total liabilities		163,816		147,013
Stockholder’s equity:
Ordinary shares of $1 par value;
Authorized: 200 shares;
Issued: 100 shares;
Outstanding: 100 shares;
Additional paid-in capital		74,986		63,576
Cumulative stock based compensation		2,638		2,173
Accumulated other comprehensive earnings		1,662		3,357
Retained earnings		5,565		14,697
Total stockholders' equity		84,851		83,803
Total liabilities and stockholders’ equity	$	248,667	$	230,816

See accompanying notes.

1

Jazz Technologies, Inc. (A Wholly Owned Subsidiary of

 Tower Semiconductor, Ltd.) and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands)

	Three months ended						Nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Revenues	$	60,209		$	43,914		$	154,586		$	118,095
Cost of revenues		47,366			35,952			125,921			96,316
Gross profit		12,843			7,962			28,665			21,779
Operating expenses:
Research and development		3,185			2,898			8,745			8,874
Selling, general and administrative		3,935			3,175			10,684			8,996
Amortization related to a lease agreement early termination		--			1,866			--			5,598
Total operating expenses		7,120			7,939			19,429			23,468
Operating income (loss)		5,723			23			9,236			(1,689	)
Financing expense, net and other expenses		(3,738	)		(4,064	)		(22,060	)		(11,111	)
Income (loss) before income taxes		1,985			(4,041	)		(12,824	)		(12,800	)
Income tax  benefit (expense)		(658	)		1,049			3,692			4,264
Net profit (loss)	$	1,327		$	(2,992	)	$	(9,132	)	$	(8,536	)

See accompanying notes.

2

Jazz Technologies, Inc. (A Wholly Owned Subsidiary of

 Tower Semiconductor, Ltd.) and Subsidiaries

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

	Three months ended						Nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Net income (loss)	$	1,327		$	(2,992	)	$	(9,132	)	$	(8,536	)
Change in employees plan assets and benefit obligations		(565	)		(446	)		(1,695	)		(1,326	)
Comprehensive income (loss)	$	762		$	(3,438	)	$	(10,827	)	$	(9,862	)

See accompanying notes.

3

Jazz Technologies, Inc. (A Wholly Owned Subsidiary of

 Tower Semiconductor, Ltd.) and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

	Nine months ended
	September 30, 2014			September 30, 2013
Operating activities:
Net loss	$	(9,132	)	$	(8,536	)
Adjustments to reconcile net loss for the period to net cash provided by operating activities:
Loss from notes exchange		9,817			--
Depreciation and amortization of intangible assets		33,215			32,931
Notes accretion and amortization of deferred financing costs		5,573			5,066
Stock based compensation expense		463			125
Other expenses , net		--			474
Changes in operating assets and liabilities:
Trade receivables		(5,460	)		(959	)
Inventories		(4,465	)		(6,136	)
Other  receivables and assets		1,532			(5,775	)
Accounts payable		3,825			663
Due to related parties, net		4,077			3,950
Accrued compensation and  benefits		1,060			260
Deferred Revenue		(410	)		247
Other current liabilities		(1,892	)		(1,934	)
Deferred tax liability, net		(4,162	)		(3,724	)
Employee related liabilities and other long-term liabilities		(1,567	)		41
Net cash provided by operating activities		32,474			16,693
Investing activities:
Purchases of property and equipment		(18,691	)		(13,373	)
Proceeds related to property and equipment		242			1,332
Net cash used in investing activities		(18,449	)		(12,041	)
Financing activities:
Proceeds from issuance of notes, net		9,214			--
Debt repayment		(4,250	)		--
Net cash provided by financing activities		4,964			--
Net increase in cash and cash equivalents		18,989			4,652
Cash and cash equivalents at beginning of period		51,351			43,306
Cash and cash equivalents at end of period	$	70,340		$	47,958
Non cash activities:
Investments in property, plant and equipment	$	7,772		$	5,124
Equity increase arising from exchange of straight to convertible debt	$	9,609		$	--
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	3,284		$	7,500
Cash paid during the period for income taxes	$	--		$	--

See accompanying notes.

4

Jazz Technologies, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2014

Note 1: Business and Formation

Unless specifically noted otherwise, as used throughout these notes to the consolidated financial statements, “Jazz”, “Company” refers to the business of Jazz Technologies, Inc. including its wholly owned subsidiaries, and “Jazz Semiconductor” refers only to the business of Jazz Semiconductor, Inc.

The Company

Since the merger with Tower in 2008, the Company is a 100% subsidiary of Tower.

The Company is based in Newport Beach, California and is an independent semiconductor foundry focused on specialty process technologies for the manufacture of analog intensive mixed-signal semiconductor devices. The Company’s specialty process technologies include advanced analog, radio frequency, high voltage, bipolar and silicon germanium bipolar complementary metal oxide (“SiGe”) semiconductor processes, for the manufacture of analog and mixed-signal semiconductors. Its customers' analog and mixed-signal semiconductor devices are used in cellular phones, wireless local area networking devices, digital TVs, set-top boxes, gaming devices, switches, routers and broadband modems.

Note 2:   Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The Company prepares its consolidated financial statements in accordance with SEC and U.S. generally accepted accounting principles (“US GAAP”) requirements and includes all adjustments of a normal recurring nature that are necessary to fairly present its condensed consolidated results of operations, financial position, and cash flows for all periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Interim period results are not necessarily indicative of full year results. This quarterly report should be read in conjunction with the Company’s most recent Annual Report on Form 10-K.

The condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the Company’s consolidated financial position at September 30, 2014 and December 31, 2013, and the consolidated results of its operations and cash flows for the three months and nine months ended September 30, 2014 and September 30, 2013. All intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified in order to conform to 2014 presentation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with US GAAP. For financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.

Concentrations

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and trade accounts receivable.

The Company generally does not require collateral for insurance of receivables. An allowance for doubtful accounts is provided for those amounts that were determined to be doubtful of collection. The Company performs ongoing credit evaluations of its customers.

5

Accounts receivable from significant customers representing 10% or more of the net accounts receivable balance as of September 30, 2014 and December 31, 2013 consists of:

	September 30, 2014			December 31, 2013
Customer 1		41	%		36	%
Customer 2		11			12

Net revenues from significant customers representing 10% or more of net revenues consist of:

	Three months ended						Nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Customer A		32	%		22	%		31	%		23	%
Customer B		*			10			*			*

* Indicates less than 10%

As a result of the Company’s concentration of its customer base, loss or cancellation of business from, or significant changes in scheduled deliveries of products sold to these customers or a change in their financial position, could materially and adversely affect the Company’s consolidated financial position, results of operations and cash flows.

The Company operates a single manufacturing facility located in Newport Beach, California. A major interruption in the manufacturing operations at this facility would have a material adverse affect on the consolidated financial position and results of operations of the Company.

Initial Adoption of New Standards

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The requirements are effective for annual reporting periods beginning after December 15, 2016 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is not permitted. The Company are evaluating the impact of the amended revenue recognition guidance on our financial statements.

Note 3:   Other Balance Sheet Details

Inventories

Inventories, net of reserves, consist of the following on September 30, 2014 and December 31, 2013 (in thousands):

	September 30, 2014		December 31, 2013
Raw material	$	3,268	$	4,434
Work in process		24,855		15,618
Finished goods		2,639		6,245
	$	30,762	$	26,297

Property, Plant and Equipment

Property, plant and equipment consist of the following on September 30, 2014 and December 31, 2013 (in thousands):

	Useful life (in years)		September 30, 2014			December 31, 2013
Building improvements		10-14	$	27,025		$	26,809
Machinery and equipment		3-7		221,487			196,812
				248,512			223,621
Accumulated depreciation				(174,822	)		(145,276	)
			$	73,690		$	78,345

6

Intangible Assets

Intangible assets consist of the following on September 30, 2014 (in thousands):

	Useful life (in years)		Cost		Accumulated Amortization		Net
Technology		4;9	$	3,300	$	2,450	$	850
Patents and other core technology rights		9		15,100		10,128		4,972
In-process research and development		--		1,800		1,800		--
Customer relationships		15		2,600		1,046		1,554
Trade name		9		5,200		3,488		1,712
Facilities lease		19		33,500		17,479		16,021
Total identifiable intangible assets			$	61,500	$	36,391	$	25,109

Intangible assets consist of the following on December 31, 2013 (in thousands):

	Useful life (in years)		Cost		Accumulated Amortization		Net
Technology		4;9	$	3,300	$	2,046	$	1,254
Patents and other core technology rights		9		15,100		8,870		6,230
In-process research and development		--		1,800		1,800		--
Customer relationships		15		2,600		916		1,684
Trade name		9		5,200		3,054		2,146
Facilities lease		19		33,500		16,512		16,988
Total identifiable intangible assets			$	61,500	$	33,198	$	28,302

The amortization related to technology, patents and other core technologies rights, and facilities lease is charged to cost of revenues. The amortization related to customer relationships and trade name is charged to operating expenses.

Note 4:   Wells Fargo Asset-Based Revolving Credit Line

In December 2013, the Company entered into an agreement with Wells Fargo Capital Finance, part of Wells Fargo & Company (“Wells Fargo”), to amend the previous loan and security agreement, for a  five-year secured asset-based revolving credit line in the total amount of up to $70 million, maturing in December 2018 (the “Credit Line Agreement”). Loans under the Credit Line Agreement bear interest at a rate equal to, at lender’s option, either the lender’s prime rate plus a margin ranging from 0.50% to 1.0% or the LIBOR rate plus a margin ranging from 1.75% to 2.25% per annum.

The outstanding borrowing availability varies from time to time based on the levels of the Company's eligible accounts receivable, eligible equipment, eligible inventories and other terms and conditions described in the Credit Line Agreement. The Credit Line Agreement is secured by the assets of the Company. The Credit Line Agreement contains customary covenants and other terms, including customary events of default. If any event of default occurs, Wells Fargo may declare due immediately, all borrowings under the facility and foreclose on the collateral. Furthermore, an event of default under the Credit Line Agreement would result in an increase in the interest rate on any amounts outstanding. The Company's obligations pursuant to the Credit Line Agreement are not guaranteed by Tower.

Borrowing availability under the Credit Line Agreement as of September 30, 2014 was approximately $51 million, of which approximately $24 million has been utilized as such date. As of September 30, 2014, the Company was in compliance with all the covenants under this facility.

7

Note 5:   Notes

Introduction

As of September 30, 2014, the Company had approximately $45 million principal amount of Notes outstanding due June 2015 and approximately $58 million principal amount of Notes outstanding due December 2018. Description and composition are as follows:

$45 million Jazz 2010 Notes due June 2015:

In July 2010, the Company issued notes in the principal amount of approximately $94 million due June 2015 (the “2010 Notes”). Interest on the 2010 Notes at a rate of 8% per annum is payable semiannually. As of September 30, 2014 the outstanding principal amount of 2010 Notes was $45 million, see also the 2014 Exchange Agreement (as defined and discussed below).

The 2010 Notes are unsecured obligations of the Company, rank equally with all other existing and future unsecured senior indebtedness of the Company, including the 2014 Notes (as defined below) and are effectively subordinated to all existing and future secured indebtedness of the Company, including the Company’s up to $70 million secured Credit Line Agreement with Wells Fargo (see Note 4 above), to the extent of the value of the collateral securing such indebtedness. The 2010 Notes are not guaranteed by Tower. The 2010 Notes shall rank senior to all existing and future subordinated debt of the Company.

The Company has the right to redeem some or all of the 2010 Notes for cash at a redemption price equal to par plus accrued and unpaid interest plus a redemption premium equal to 2%.

 Holders of the 2010 Notes are entitled, subject to certain conditions and restrictions, to require the Company to repurchase the 2010 Notes at par plus accrued interest and a 1% redemption premium in the event of certain change of control transactions as set forth in the Indenture.

The indenture governing the 2010 Notes contains certain customary covenants as set forth in the Indenture.

If there is an event of default on the 2010 Notes, all of the 2010 Notes may become immediately due and payable, subject to certain conditions set forth in the Indenture.

The Company’s obligations under the 2010 Notes are guaranteed by the Company’s wholly owned domestic subsidiaries. The Company has not provided condensed consolidated financial information for such subsidiaries because the subsidiaries have no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several and the subsidiaries of the Company, other than the subsidiary guarantors, are minor.

$58 million Jazz 2014 Notes due December 2018:

In March 2014, the Company, certain of its domestic subsidiaries and Tower entered into an exchange agreement (the “2014 Exchange Agreement”) with certain note-holders (the “2014 Participating Holders”) according to which the Company issued new unsecured 8% convertible senior notes due December 2018 (the “2014 Notes”) in exchange for approximately $45 million in aggregate principal amount of 2010 Notes.

In addition, the Company, Tower and certain of the 2014 Participating Holders (the “Purchasers”) entered into a purchase agreement (the “Purchase Agreement”) pursuant to which the Purchasers purchased $10 million aggregate principal amount of 2014 Notes for cash considerations.

The 2014 Participating Holders and Purchasers may submit a conversion request with the Company with respect to their 2014 Notes to be settled at the Company’s discretion through cash from Jazz or ordinary shares from Tower, in which event Tower has to issue ordinary shares based on a conversion price of $10.07 per share, reflecting a 20 percent premium over the average closing price for Tower’s ordinary shares for the five trading days ending on the day prior to the signing date of the 2014 Exchange Agreement and Purchase Agreement. 

The 2014 Notes are unsecured senior obligations of the Company, rank equally with all other existing and future unsecured senior indebtedness of the Company, including the 2010 Notes, and are effectively subordinated to all existing and future secured indebtedness of the Company, including the Company’s secured Credit Line Agreement with Wells Fargo (see Note 4 above), to the extent of the value of the collateral securing such indebtedness. The 2014 Notes rank senior to all existing and future subordinated debt. The 2014 Notes are jointly and severally guaranteed on a senior unsecured basis by the Company’s domestic subsidiaries. The 2014 Notes are not guaranteed by Tower.

 Holders of the 2014 Notes are entitled, subject to certain conditions and restrictions, to require the Company to repurchase the 2014 Notes at par plus accrued interest and a 1% redemption premium in the event of certain change of control transactions as set forth in the Indenture governing the 2014 Notes.

 The Indenture contains certain customary covenants including covenants restricting the Company’s ability and the ability of its subsidiaries to, among other things, incur additional debt, incur additional liens, make specified payments and make certain asset sales.

 If there is an event of default on the 2014 Notes, all of the 2014 Notes may become immediately due and payable, subject to certain conditions set forth in the Indenture.

Jazz’s obligations under the 2014 Notes are guaranteed by Jazz’s wholly owned domestic subsidiaries. The Company has not provided condensed consolidated financial information for such subsidiaries because the subsidiaries have no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several and the subsidiaries of the Company, other than the subsidiary guarantors, are minor.

8

As of September 30, 2014, approximately $58 million principal amount of 2014 Notes was outstanding.

The Company concluded the exchange should not be recognized as a troubled debt restructuring in accordance with the provisions of  ASC 470-60 "Modifications and Extinguishments". In accordance with the provisions of ASC 470-50 the Company concluded that the exchange resulted in an extinguishment of the old debt and the issuance of a new convertible debt to be recorded at fair value. As described above, certain of the 2014 Notes were issued in exchange for certain of the 2010 Notes. Since the 2014 Notes were not traded and no quotes were available, the Company determined the fair value of the 2014 Notes using the present value technique. The 2014 Exchange Agreement resulted in an expense of approximately $9.8 million, which has been recorded in the statement of operations report as non-cash one-time financing expense for the nine months ended September 30, 2014 and the convertible feature has been recorded in equity.

Note 6:  Income Taxes

In 2013, the U.S. tax authorities commenced an audit of the Company’s 2011 tax returns, and asked the Company for certain reports and data in connection with said year’s tax returns. During September 2014, the Company received correspondence from the U.S. tax authoritiesthat they accepted the 2011 federal tax returns as filed without any audit adjustments.

As described in Note 5 above, the 2014 Exchange Agreement resulted in the recognition of a $9.8 million one-time non cash cost included in financing expenses, net.  The tax benefit has been recorded entirely in the statements of operations for the three months ended March 31, 2014 and this one-time non cash cost has not and will not impact the Company’s projected annual effective tax rate to be applied to year-to-date net profit or loss before income taxes excluding this one-time non cash cost.

Note 7:   Employee Benefit Plans

The pension and other post retirement benefit plans amount to $0.5 million and $0.4 million income for the three months ended September 30, 2014 and 2013, respectively. For the nine months ended September 30, 2014 and 2013 amounts were $1.5 million and $1.3 million income, respectively.

Note 8:   Employee Stock Option Expense

 During the nine months ended September 30, 2014, 125,000 options were awarded. For the three months ended September 30, 2014 and 2013, the Company recorded $0.2 million and immaterial amount, respectively of compensation expenses relating to options granted to employees. For the nine months ended September 30, 2014 and 2013, the Company recorded $0.5 million and $0.1 million, respectively of compensation expenses relating to options granted to employees, respectively.

Note 9:    Related Party Transactions:

Related Party Transactions consist of the following (in thousands):

	As of September 30, 2014		As of December 31, 2013
Due from related parties (included in the accompanying balance sheets)	$	3,930	$	6,406
Due to related parties (included in the accompanying balance sheets)	$	4,150	$	146

Related parties’ balances are with Tower and TowerJazz Japan Ltd. (“TJP”) and are mainly for purchases and payments on behalf of the other party, capital expenditures’ related transactionsand service charges.

Note 10: Commitments and Contingencies

Leases

The Company leases its fabrication facilities and headquarters under lease contracts that may be extended until 2027, through the exercise of options at Jazz’s sole discretion to extend the lease periods from 2017 to 2022 and from 2022 to 2027. In 2010, the properties which the Company leases for its fabrication facilities and headquarters were sold to a real estate investment firm based in Irvine, California. In connection with the sale, the Company negotiated amendments to its operating leases that confirm the Company’s ability to remain in the fabrication facilities through 2027 as described above. In the amendments to its leases, Jazz secured various contractual safeguards designed to limit and mitigate any adverse impact of construction activities on its fabrication operations. In addition, the most recent lease amendment set forth certain obligations of the Company and the landlord, including certain noise abatement actions at the fabrication facility.

9

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the financial statements and related notes contained elsewhere in this report. See our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and subsequent quarterly reports filed with the Securities and Exchange Commission for information regarding certain risk factors known to us that could cause reported financial information not to be necessarily indicative of future results.

FORWARD LOOKING STATEMENTS

This report on Form 10-Q may contain “forward-looking statements” within the meaning of the federal securities laws made pursuant to the safe harbor provisions of the Private Securities Litigation Report Act of 1995. These statements, which represent our expectations or beliefs concerning various future events, may contain words such as “may,” “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” or other words indicating future results. Such statements may include but are not limited to statements concerning the following:

· anticipated trends in revenues;

· growth opportunities in domestic and international markets;

· new and enhanced channels of distribution;

· customer acceptance and satisfaction with our products;

· expected trends in operating and other expenses;

· purchase of raw materials at levels to meet forecasted demand;

· anticipated cash and intentions regarding usage of cash;

· changes in effective tax rates; and

· anticipated product enhancements or releases.

This report, including these forward-looking statements, are subject to risks and uncertainties, including those risks and uncertainties described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and subsequent quarterly reports filed with the Securities and Exchange Commission, that could cause actual results to differ materially from those anticipated as of the date of this report. We assume no obligation to update any forward-looking statements to reflect events or circumstances arising after the date of this report.

RESULTS OF OPERATIONS

For the nine months ended September 30, 2014, we had a net loss of $9.1 million compared to a net loss of $8.5 million for the nine months ended September 30, 2013.

The following table sets forth certain statement of operations data as a percentage of total revenues for the periods indicated.

	Nine Months Ended
	September 30, 2014			September 30, 2013
Net revenues		100	%		100	%
Cost of revenues		81.5			81.6
Gross profit		18.5			18.4
Operating expenses:
Research and development		5.7			7.5
Selling, general and administrative		6.9			7.6
Amortization related to a lease agreement early termination		--			4.7
Total operating expenses		12.6			19.9
Operating profit (loss)		6.0			(1.4	)
Financing expense , net and other expenses		(14.3	)		(9.4	)
Income tax benefit		2.4			3.6
Net loss		(5.9	)%		(7.2	)%

10

Comparison of Nine Months Ended September 30, 2014 and September 30, 2013

Revenues

Our net revenues for the nine months ended September 30, 2014 amounted to $154.6 million, an increase of $36.5 million as compared to $118.1 million for the corresponding period in 2013. The revenue increase is mainly attributable to the 26% increase of quantities sold and 4% higher average selling price during the nine months ended September 30, 2014.

Cost of Revenues

Our cost of revenues was $125.9 million for the nine months ended September 30, 2014 as compared to $96.3 million for the corresponding period in 2013. The increase in cost of revenues was mainly due to variable costs directly associated with the increase in quantities of wafers that we manufactured, as described above.

Gross Profit

Our gross profit amounted to $28.7 million in the nine months ended September 30, 2014 as compared to $21.8 million in the corresponding period in 2013.

Operating Expenses

Operating expenses for the nine months ended September 30, 2014 amounted to $19.4 million, as compared to $23.5 million in the nine months ended September 30, 2013. The primary reason for the reduction in operating expenses is that for the nine months ended September 30, 2013 we included $5.6 million amortization related charge to an office building lease early termination.

Financing Expense, Net and Other Expenses

Financing expense, net for the nine months ended September 30, 2014 amounted to $22.1 million, as compared to $11.1 million in the corresponding period in 2013. Financing expense, net and other expenses in the nine months ended September 30, 2014 were higher than in same period in 2013 due to the inclusion of a $9.8 million non-cash one-time financing cost resulting from the 2014 Exchange Agreement, as described in Note 5 above.

Income Tax Benefit

Income tax benefit amounted to $3.7 million in the nine months ended September 30, 2014, as compared to income tax benefit of $4.3 million in the nine months ended September 30, 2013.

Net loss

Net loss for the nine months ended September 30, 2014 amounted to $9.1 million as compared to net loss of $8.5 million in the nine months ended September 30, 2013. The $0.6 million increase in net loss is due to the one-time non-cash cost of $9.8 million included in financing expenses, resulting from the 2014 Exchange Agreement described in Note 5 above, offset by improved gross profits resulted from the increased revenue.

Item 4.    Controls and Procedures.

Disclosure Controls and Procedures

Based on the evaluation as of the end of the period covered by this report, our principal executive officer and chief financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of the end of the period covered by this report.

11

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and our principal executive officer and our principal financial officer have concluded that these controls and procedures are effective at the “reasonable assurance” level. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings

There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or any of our property is subject.

Item 1A.Risk Factors

In addition to the other information contained in this Form 10-Q, you should carefully consider the risk factors associated with our business previously disclosed in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Our business, financial condition and/or results of operations could be materially adversely affected by any of these risks. Additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations.

Item 6.    Exhibits.

Number	Description
31.1	Principal Executive Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a).
31.2	Principal Financial Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a).
32.1	Principal Executive Officer Certification required by Section 1350.
32.2	Principal Financial Officer Certification required by Section 1350.
101	Financial information from the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL

12

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 17, 2014	JAZZ TECHNOLOGIES, INC.
	By:	/s/ Marco Racanelli
		Senior Vice President and Site General Manager (Principal Executive Officer)
	By:	/s/ RONIT VARDI
		Chief Financial Officer (Principal Financial and Accounting Officer)

INDEX TO EXHIBITS

Number	Description
31.1	Principal Executive Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a).
31.2	Principal Financial Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a).
32.1	Principal Executive Officer Certification required by Section 1350.
32.2	Principal Financial Officer Certification required by Section 1350.
101	Financial information from the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, formatted in XBRL

13

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Marco Racanelli, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 of Jazz Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2014

/s/ MARCO RACANELLI

Marco Racanelli

_____

Senior Vice President and Site General Manager

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Ronit Vardi, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 of Jazz Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 17, 2014

	/s/ RONIT VARDI
	Ronit Vardi
Chief Financial Officer

EX-32.1

EXHIBIT 32.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

In connection with the Quarterly Report on Form 10-Q (the “Report”), of Jazz Technologies, Inc. (the "Company") for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof, the undersigned, Marco Racanelli, Principal Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

       1.  the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

       2.  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 17, 2014

/s/ MARCO RACANELLI

Marco Racanelli

Senior Vice President and Site General Manager

(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

In connection with the Quarterly Report on Form 10-Q (the “Report”), of Jazz Technologies, Inc. (the "Company") for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof, the undersigned, Ronit Vardi, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

       1.  the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

       2.  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

Dated:  November 17, 2014

/s/ RONIT VARDI

Ronit Vardi,

Chief Financial Officer

XML

Other Balance Sheet Details (Schedule of Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets, cost	$ 61,500	$ 61,500
Identifiable intangible assets, accumulated amortization	36,391	33,198
Identifiable intangible assets, net	25,109	28,302
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets, cost	3,300	3,300
Identifiable intangible assets, accumulated amortization	2,450	2,046
Identifiable intangible assets, net	850	1,254
Technology [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	4 years	4 years
Technology [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	9 years	9 years
Patents and Other Core Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	9 years	9 years
Identifiable intangible assets, cost	15,100	15,100
Identifiable intangible assets, accumulated amortization	10,128	8,870
Identifiable intangible assets, net	4,972	6,230
In- Process Research and Development [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life
Identifiable intangible assets, cost	1,800	1,800
Identifiable intangible assets, accumulated amortization	1,800	1,800
Identifiable intangible assets, net
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	15 years	15 years
Identifiable intangible assets, cost	2,600	2,600
Identifiable intangible assets, accumulated amortization	1,046	916
Identifiable intangible assets, net	1,554	1,684
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	9 years	9 years
Identifiable intangible assets, cost	5,200	5,200
Identifiable intangible assets, accumulated amortization	3,488	3,054
Identifiable intangible assets, net	1,712	2,146
Facilities Lease [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	19 years	19 years
Identifiable intangible assets, cost	33,500	33,500
Identifiable intangible assets, accumulated amortization	17,479	16,512
Identifiable intangible assets, net	$ 16,021	$ 16,988

XML

Other Balance Sheet Details

9 Months Ended

Sep. 30, 2014

Other Balance Sheet Details [Abstract]

Other Balance Sheet Details

Note 3:  Other Balance Sheet Details

Inventories

Inventories, net of reserves, consist of the following on September 30, 2014 and December 31, 2013 (in thousands):

	September 30, 2014		December 31, 2013
Raw material	$	3,268	$	4,434
Work in process		24,855		15,618
Finished goods		2,639		6,245
	$	30,762	$	26,297

Property, Plant and Equipment

Property, plant and equipment consist of the following on September 30, 2014 and December 31, 2013 (in thousands):

	Useful life (in years)		September 30, 2014			December 31, 2013
Building improvements		10-14	$	27,025		$	26,809
Machinery and equipment		3-7		221,487			196,812
				248,512			223,621
Accumulated depreciation				(174,822	)		(145,276	)
			$	73,690		$	78,345

Intangible Assets

Intangible assets consist of the following on September 30, 2014 (in thousands):

	Useful life (in years)		Cost		Accumulated Amortization		Net
Technology		4;9	$	3,300	$	2,450	$	850
Patents and other core technology rights		9		15,100		10,128		4,972
In-process research and development		--		1,800		1,800		--
Customer relationships		15		2,600		1,046		1,554
Trade name		9		5,200		3,488		1,712
Facilities lease		19		33,500		17,479		16,021
Total identifiable intangible assets			$	61,500	$	36,391	$	25,109

Intangible assets consist of the following on December 31, 2013 (in thousands):

	Useful life (in years)		Cost		Accumulated Amortization		Net
Technology		4;9	$	3,300	$	2,046	$	1,254
Patents and other core technology rights		9		15,100		8,870		6,230
In-process research and development		--		1,800		1,800		--
Customer relationships		15		2,600		916		1,684
Trade name		9		5,200		3,054		2,146
Facilities lease		19		33,500		16,512		16,988
Total identifiable intangible assets			$	61,500	$	33,198	$	28,302

The amortization related to technology, patents and other core technologies rights, and facilities lease is charged to cost of revenues. The amortization related to customer relationships and trade name is charged to operating expenses.

XML

Employee Benefit Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Employee Postretirement Benefit Plans [Abstract]
Pension and other post retirement benefit plans income	$ 565	$ 446	$ 1,695	$ 1,326

XML

Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Taxes [Abstract]
Loss from notes exchange	$ 9,817

XML

Employee Stock Option Expense (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Employee Stock Option Expense [Abstract]
Options granted by Tower to Company employees			125,000
Compensation expense related to options granted to employees	$ 200	$ 0	$ 463	$ 125

XML

Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Related Party Transactions [Abstract]
Due from related parties (included in the accompanying balance sheets)	$ 3,930	$ 6,406
Due to related parties (included in the accompanying balance sheets)	$ 4,150	$ 146

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2:  Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The Company prepares its consolidated financial statements in accordance with SEC and U.S. generally accepted accounting principles (“US GAAP”) requirements and includes all adjustments of a normal recurring nature that are necessary to fairly present its condensed consolidated results of operations, financial position, and cash flows for all periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Interim period results are not necessarily indicative of full year results. This quarterly report should be read in conjunction with the Company's most recent Annual Report on Form 10-K.

The condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the Company's consolidated financial position at September 30, 2014 and December 31, 2013, and the consolidated results of its operations and cash flows for the three months and nine months ended September 30, 2014 and September 30, 2013. All intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified in order to conform to 2014 presentation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with US GAAP. For financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.

Concentrations

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and trade accounts receivable.

The Company generally does not require collateral for insurance of receivables. An allowance for doubtful accounts is provided for those amounts that were determined to be doubtful of collection. The Company performs ongoing credit evaluations of its customers.

Accounts receivable from significant customers representing 10% or more of the net accounts receivable balance as of September 30, 2014 and December 31, 2013 consists of:

	September 30, 2014			December 31, 2013
Customer 1		41	%		36	%
Customer 2		11			12

Net revenues from significant customers representing 10% or more of net revenues consist of:

	Three months ended						Nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Customer A		32	%		22	%		31	%		23	%
Customer B		*			10			*			*

* Indicates less than 10%

As a result of the Company's concentration of its customer base, loss or cancellation of business from, or significant changes in scheduled deliveries of products sold to these customers or a change in their financial position, could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows.

The Company operates a single manufacturing facility located in Newport Beach, California. A major interruption in the manufacturing operations at this facility would have a material adverse affect on the consolidated financial position and results of operations of the Company.

Initial Adoption of New Standards

              In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The requirements are effective for annual reporting periods beginning after December 15, 2016 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is not permitted. The Company are evaluating the impact of the amended revenue recognition guidance on our financial statements.

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 70,340	$ 51,351
Receivables:
Trade receivables, net of allowance for doubtful accounts of $0 at September 30, 2014 and December 31, 2013	25,886	20,426
Other receivables	4,723	9,835
Inventories	30,762	26,297
Deferred tax asset	3,944	3,846
Other current assets	1,990	1,303
Total current assets	137,645	113,058
Long-term investments	1,336	778
Property, plant and equipment, net	73,690	78,345
Intangible assets, net	25,109	28,302
Goodwill	7,000	7,000
Other assets	3,887	3,333
Total assets	248,667	230,816
Current liabilities:
Current maturities of debentures	41,563
Accounts payable	24,543	15,290
Accrued compensation and benefits	7,045	5,985
Deferred revenues	2,082	2,492
Other current liabilities	6,861	5,205
Total current liabilities	82,094	28,972
Long term liabilities:
Long-term debt from banks	19,100	19,100
Notes	42,229	81,181
Deferred tax liability	4,510	2,429
Employee related liabilities	2,551	2,551
Other long-term liabilities	13,332	12,780
Total liabilities	163,816	147,013
Stockholder's equity:
Ordinary shares of $1 par value; Authorized: 200 shares; Issued: 100 shares; Outstanding: 100 shares;
Additional paid-in capital	74,986	63,576
Cumulative stock based compensation	2,638	2,173
Accumulated other comprehensive earnings	1,662	3,357
Retained earnings	5,565	14,697
Total stockholders' equity	84,851	83,803
Total liabilities and stockholders' equity	$ 248,667	$ 230,816

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Operating activities:
Net loss	$ (9,132)	$ (8,536)
Adjustments to reconcile net loss for the period to net cash provided by operating activities:
Loss from notes exchange	9,817
Depreciation and amortization of intangible assets	33,215	32,931
Notes accretion and amortization of deferred financing costs	5,573	5,066
Stock based compensation expense	463	125
Other expenses , net		474
Changes in operating assets and liabilities:
Trade receivables	(5,460)	(959)
Inventories	(4,465)	(6,136)
Other receivables and assets	1,532	(5,775)
Accounts payable	3,825	663
Due to related parties, net	4,077	3,950
Accrued compensation and benefits	1,060	260
Deferred Revenue	(410)	247
Other current liabilities	(1,892)	(1,934)
Deferred tax liability, net	(4,162)	(3,724)
Employee related liabilities and other long-term liabilities	(1,567)	41
Net cash provided by operating activities	32,474	16,693
Investing activities:
Purchases of property and equipment	(18,691)	(13,373)
Proceeds related to property and equipment	242	1,332
Net cash used in investing activities	(18,449)	(12,041)
Financing activities:
Proceeds from issuance of notes, net	9,214
Debt repayment	(4,250)
Net cash provided by financing activities	4,964
Net increase in cash and cash equivalents	18,989	4,652
Cash and cash equivalents at beginning of period	51,351	43,306
Cash and cash equivalents at end of period	70,340	47,958
Non cash activities:
Investments in property, plant and equipment	7,772	5,124
Equity increase arising from exchange of straight to convertible debt	9,609
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	3,284	7,500
Cash paid during the period for income taxes

XML

Summary of Significant Accounting Policies (Details) (Customer Concentration Risk [Member])	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended			9 Months Ended
	Sep. 30, 2014 Accounts Receivable [Member] Major Customer One [Member]	Dec. 31, 2013 Accounts Receivable [Member] Major Customer One [Member]	Sep. 30, 2014 Accounts Receivable [Member] Major Customer Two [Member]	Dec. 31, 2013 Accounts Receivable [Member] Major Customer Two [Member]	Sep. 30, 2014 Net Revenues [Member] Major Customer A [Member]	Sep. 30, 2013 Net Revenues [Member] Major Customer A [Member]	Sep. 30, 2014 Net Revenues [Member] Major Customer A [Member]	Sep. 30, 2013 Net Revenues [Member] Major Customer A [Member]	Sep. 30, 2014 Net Revenues [Member] Major Customer B [Member]		Sep. 30, 2013 Net Revenues [Member] Major Customer B [Member]	Sep. 30, 2014 Net Revenues [Member] Major Customer B [Member]		Sep. 30, 2013 Net Revenues [Member] Major Customer B [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	41.00%	36.00%	11.00%	12.00%	32.00%	22.00%	31.00%	23.00%		[1]	10.00%		[1]		[1]

[1] Indicates less than 10%

XML

Other Balance Sheet Details (Schedule of Property, Plant and Equipment) (Details) (USD $) In Thousands, unless otherwise specified					9 Months Ended				9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Building Improvements [Member]	Dec. 31, 2013 Building Improvements [Member]	Sep. 30, 2014 Building Improvements [Member] Minimum [Member]	Sep. 30, 2014 Building Improvements [Member] Maximum [Member]	Sep. 30, 2014 Machinery and Equipment [Member]	Dec. 31, 2013 Machinery and Equipment [Member]	Sep. 30, 2014 Machinery and Equipment [Member] Minimum [Member]	Sep. 30, 2014 Machinery and Equipment [Member] Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life					10 years	14 years			3 years	7 years
Property, plant and equipment, gross	$ 248,512	$ 223,621	$ 27,025	$ 26,809			$ 221,487	$ 196,812
Accumulated depreciation	(174,822)	(145,276)
Property, plant and equipment, net	$ 73,690	$ 78,345

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Business and Formation

9 Months Ended

Sep. 30, 2014

Business and Formation [Abstract]

Business and Formation

Note 1: Business and Formation

Unless specifically noted otherwise, as used throughout these notes to the consolidated financial statements, “Jazz”, “Company” refers to the business of Jazz Technologies, Inc. including its wholly owned subsidiaries, and “Jazz Semiconductor” refers only to the business of Jazz Semiconductor, Inc.

The Company

Since the merger with Tower in 2008, the Company is a 100% subsidiary of Tower.

The Company is based in Newport Beach, California and is an independent semiconductor foundry focused on specialty process technologies for the manufacture of analog intensive mixed-signal semiconductor devices. The Company's specialty process technologies include advanced analog, radio frequency, high voltage, bipolar and silicon germanium bipolar complementary metal oxide (“SiGe”) semiconductor processes, for the manufacture of analog and mixed-signal semiconductors. Its customers' analog and mixed-signal semiconductor devices are used in cellular phones, wireless local area networking devices, digital TVs, set-top boxes, gaming devices, switches, routers and broadband modems.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Condensed Consolidated Balance Sheets [Abstract]
Trade receivables, allowance for doubtful accounts	$ 0	$ 0
Ordinary shares, par value	$ 1	$ 1
Ordinary shares, authorized	200	200
Ordinary shares, issued	100	100
Ordinary shares, outstanding	100	100

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Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2014

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The Company prepares its consolidated financial statements in accordance with SEC and U.S. generally accepted accounting principles (“US GAAP”) requirements and includes all adjustments of a normal recurring nature that are necessary to fairly present its condensed consolidated results of operations, financial position, and cash flows for all periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Interim period results are not necessarily indicative of full year results. This quarterly report should be read in conjunction with the Company's most recent Annual Report on Form 10-K.

The condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the Company's consolidated financial position at September 30, 2014 and December 31, 2013, and the consolidated results of its operations and cash flows for the three months and nine months ended September 30, 2014 and September 30, 2013. All intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified in order to conform to 2014 presentation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with US GAAP. For financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.

Concentrations

Concentrations

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and trade accounts receivable.

The Company generally does not require collateral for insurance of receivables. An allowance for doubtful accounts is provided for those amounts that were determined to be doubtful of collection. The Company performs ongoing credit evaluations of its customers.

Accounts receivable from significant customers representing 10% or more of the net accounts receivable balance as of September 30, 2014 and December 31, 2013 consists of:

	September 30, 2014			December 31, 2013
Customer 1		41	%		36	%
Customer 2		11			12

Net revenues from significant customers representing 10% or more of net revenues consist of:

	Three months ended						Nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Customer A		32	%		22	%		31	%		23	%
Customer B		*			10			*			*

* Indicates less than 10%

As a result of the Company's concentration of its customer base, loss or cancellation of business from, or significant changes in scheduled deliveries of products sold to these customers or a change in their financial position, could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows.

The Company operates a single manufacturing facility located in Newport Beach, California. A major interruption in the manufacturing operations at this facility would have a material adverse affect on the consolidated financial position and results of operations of the Company.

Initial Adoption of New Standards

Initial Adoption of New Standards

              In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The requirements are effective for annual reporting periods beginning after December 15, 2016 using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is not permitted. The Company are evaluating the impact of the amended revenue recognition guidance on our financial statements.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Entity Registrant Name	Jazz Technologies, Inc.
Entity Central Index Key	0001337675
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	100

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2014

Accounts Receivable [Member]

Concentration Risk [Line Items]

Schedule of Concentration of Risk

	September 30, 2014			December 31, 2013
Customer 1		41	%		36	%
Customer 2		11			12

* Indicates less than 10%

Net Revenues [Member]

Concentration Risk [Line Items]

Schedule of Concentration of Risk

	Three months ended						Nine months ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Customer A		32	%		22	%		31	%		23	%
Customer B		*			10			*			*

* Indicates less than 10%

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Condensed Consolidated Statements of Operations (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Condensed Consolidated Statements of Operations [Abstract]
Revenues	$ 60,209	$ 43,914	$ 154,586	$ 118,095
Cost of revenues	47,366	35,952	125,921	96,316
Gross profit	12,843	7,962	28,665	21,779
Operating expenses:
Research and development	3,185	2,898	8,745	8,874
Selling, general and administrative	3,935	3,175	10,684	8,996
Amortization related to a lease agreement early termination		1,866		5,598
Total operating expenses	7,120	7,939	19,429	23,468
Operating income (loss)	5,723	23	9,236	(1,689)
Financing expense, net and other expenses	(3,738)	(4,064)	(22,060)	(11,111)
Income (loss) before income taxes	1,985	(4,041)	(12,824)	(12,800)
Income tax benefit (expense)	(658)	1,049	3,692	4,264
Net profit (loss)	$ 1,327	$ (2,992)	$ (9,132)	$ (8,536)

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Taxes [Abstract]

Income Taxes

Note 6:  Income Taxes

In 2013, the U.S. tax authorities commenced an audit of the Company's 2011 tax returns, and asked the Company for certain reports and data in connection with said year's tax returns. During September 2014, the Company received correspondence from the U.S. tax authorities that they accepted the 2011 federal tax returns as filed without any audit adjustments.

As described in Note 5 above, the 2014 Exchange Agreement resulted in the recognition of a $9.8 million one-time non cash cost included in financing expenses, net. The tax benefit has been recorded entirely in the statements of operations for the three months ended March 31, 2014 and this one-time non cash cost has not and will not impact the Company's projected annual effective tax rate to be applied to year-to-date net profit or loss before income taxes excluding this one-time non cash cost.

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Notes

9 Months Ended

Sep. 30, 2014

Notes [Abstract]

Notes

Note 5:  Notes

Introduction

As of September 30, 2014, the Company had approximately $45 million principal amount of Notes outstanding due June 2015 and approximately $58 million principal amount of Notes outstanding due December 2018. Description and composition are as follows:

$45 million Jazz 2010 Notes due June 2015:

In July 2010, the Company issued notes in the principal amount of approximately $94 million due June 2015 (the “2010 Notes”). Interest on the 2010 Notes at a rate of 8% per annum is payable semiannually. As of September 30, 2014 the outstanding principal amount of 2010 Notes was $45 million, see also the 2014 Exchange Agreement (as defined and discussed below).

The 2010 Notes are unsecured obligations of the Company, rank equally with all other existing and future unsecured senior indebtedness of the Company, including the 2014 Notes (as defined below) and are effectively subordinated to all existing and future secured indebtedness of the Company, including the Company's up to $70 million secured Credit Line Agreement with Wells Fargo (see Note 4 above), to the extent of the value of the collateral securing such indebtedness. The 2010 Notes are not guaranteed by Tower. The 2010 Notes shall rank senior to all existing and future subordinated debt of the Company.

The Company has the right to redeem some or all of the 2010 Notes for cash at a redemption price equal to par plus accrued and unpaid interest plus a redemption premium equal to 2%.

Holders of the 2010 Notes are entitled, subject to certain conditions and restrictions, to require the Company to repurchase the 2010 Notes at par plus accrued interest and a 1% redemption premium in the event of certain change of control transactions as set forth in the Indenture.

The indenture governing the 2010 Notes contains certain customary covenants as set forth in the Indenture.

If there is an event of default on the 2010 Notes, all of the 2010 Notes may become immediately due and payable, subject to certain conditions set forth in the Indenture.

The Company's obligations under the 2010 Notes are guaranteed by the Company's wholly owned domestic subsidiaries. The Company has not provided condensed consolidated financial information for such subsidiaries because the subsidiaries have no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several and the subsidiaries of the Company, other than the subsidiary guarantors, are minor.

$58 million Jazz 2014 Notes due December 2018:

In March 2014, the Company, certain of its domestic subsidiaries and Tower entered into an exchange agreement (the “2014 Exchange Agreement”) with certain note-holders (the “2014 Participating Holders”) according to which the Company issued new unsecured 8% convertible senior notes due December 2018 (the “2014 Notes”) in exchange for approximately $45 million in aggregate principal amount of 2010 Notes.

In addition, the Company, Tower and certain of the 2014 Participating Holders (the “Purchasers”) entered into a purchase agreement (the “Purchase Agreement”) pursuant to which the Purchasers purchased $10 million aggregate principal amount of 2014 Notes for cash considerations.

The 2014 Participating Holders and Purchasers may submit a conversion request with the Company with respect to their 2014 Notes to be settled at the Company's discretion through cash from Jazz or ordinary shares from Tower, in which event Tower has to issue ordinary shares based on a conversion price of $10.07 per share, reflecting a 20 percent premium over the average closing price for Tower's ordinary shares for the five trading days ending on the day prior to the signing date of the 2014 Exchange Agreement and Purchase Agreement. 

The 2014 Notes are unsecured senior obligations of the Company, rank equally with all other existing and future unsecured senior indebtedness of the Company, including the 2010 Notes, and are effectively subordinated to all existing and future secured indebtedness of the Company, including the Company's secured Credit Line Agreement with Wells Fargo (see Note 4 above), to the extent of the value of the collateral securing such indebtedness. The 2014 Notes rank senior to all existing and future subordinated debt. The 2014 Notes are jointly and severally guaranteed on a senior unsecured basis by the Company's domestic subsidiaries. The 2014 Notes are not guaranteed by Tower.

Holders of the 2014 Notes are entitled, subject to certain conditions and restrictions, to require the Company to repurchase the 2014 Notes at par plus accrued interest and a 1% redemption premium in the event of certain change of control transactions as set forth in the Indenture governing the 2014 Notes.

The Indenture contains certain customary covenants including covenants restricting the Company's ability and the ability of its subsidiaries to, among other things, incur additional debt, incur additional liens, make specified payments and make certain asset sales.

If there is an event of default on the 2014 Notes, all of the 2014 Notes may become immediately due and payable, subject to certain conditions set forth in the Indenture.

Jazz's obligations under the 2014 Notes are guaranteed by Jazz's wholly owned domestic subsidiaries. The Company has not provided condensed consolidated financial information for such subsidiaries because the subsidiaries have no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several and the subsidiaries of the Company, other than the subsidiary guarantors, are minor.

As of September 30, 2014, approximately $58 million principal amount of 2014 Notes was outstanding.

The Company concluded the exchange should not be recognized as a troubled debt restructuring in accordance with the provisions of  ASC 470-60 "Modifications and Extinguishments". In accordance with the provisions of ASC 470-50 the Company concluded that the exchange resulted in an extinguishment of the old debt and the issuance of a new convertible debt to be recorded at fair value. As described above, certain of the 2014 Notes were issued in exchange for certain of the 2010 Notes. Since the 2014 Notes were not traded and no quotes were available, the Company determined the fair value of the 2014 Notes using the present value technique. The 2014 Exchange Agreement resulted in an expense of approximately $9.8 million, which has been recorded in the statement of operations report as non-cash one-time financing expense for the nine months ended September 30, 2014 and the convertible feature has been recorded in equity.

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Other Balance Sheet Details (Schedule of Inventories) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other Balance Sheet Details [Abstract]
Raw materials	$ 3,268	$ 4,434
Work in process	24,855	15,618
Finished goods	2,639	6,245
Inventory, net	$ 30,762	$ 26,297

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Other Balance Sheet Details (Tables)

9 Months Ended

Sep. 30, 2014

Other Balance Sheet Details [Abstract]

Schedule of Inventories

	September 30, 2014		December 31, 2013
Raw material	$	3,268	$	4,434
Work in process		24,855		15,618
Finished goods		2,639		6,245
	$	30,762	$	26,297

Schedule of Property and Equipment

	Useful life (in years)		September 30, 2014			December 31, 2013
Building improvements		10-14	$	27,025		$	26,809
Machinery and equipment		3-7		221,487			196,812
				248,512			223,621
Accumulated depreciation				(174,822	)		(145,276	)
			$	73,690		$	78,345

Schedule of Intangible Assets

	Useful life (in years)		Cost		Accumulated Amortization		Net
Technology		4;9	$	3,300	$	2,450	$	850
Patents and other core technology rights		9		15,100		10,128		4,972
In-process research and development		--		1,800		1,800		--
Customer relationships		15		2,600		1,046		1,554
Trade name		9		5,200		3,488		1,712
Facilities lease		19		33,500		17,479		16,021
Total identifiable intangible assets			$	61,500	$	36,391	$	25,109

Intangible assets consist of the following on December 31, 2013 (in thousands):

	Useful life (in years)		Cost		Accumulated Amortization		Net
Technology		4;9	$	3,300	$	2,046	$	1,254
Patents and other core technology rights		9		15,100		8,870		6,230
In-process research and development		--		1,800		1,800		--
Customer relationships		15		2,600		916		1,684
Trade name		9		5,200		3,054		2,146
Facilities lease		19		33,500		16,512		16,988
Total identifiable intangible assets			$	61,500	$	33,198	$	28,302

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Related Party Transactions

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

Note 9:  Related Party Transactions:

Related Party Transactions consist of the following (in thousands):

	As of September 30, 2014		As of December 31, 2013
Due from related parties (included in the accompanying balance sheets)	$	3,930	$	6,406
Due to related parties (included in the accompanying balance sheets)	$	4,150	$	146

Related parties' balances are with Tower and TowerJazz Japan Ltd. (“TJP”) and are mainly for purchases and payments on behalf of the other party, capital expenditures' related transactions and service charges.

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Employee Benefit Plans

9 Months Ended

Sep. 30, 2014

Employee Postretirement Benefit Plans [Abstract]

Employee Postretirement Benefit Plans

Note 7:  Employee Benefit Plans

The pension and other post retirement benefit plans amount to $0.5 million and $0.4 million income for the three months ended September 30, 2014 and 2013, respectively. For the nine months ended September 30, 2014 and 2013 amounts were $1.5 million and $1.3 million income, respectively.

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Employee Stock Option Expense

9 Months Ended

Sep. 30, 2014

Employee Stock Option Expense [Abstract]

Employee Stock Option Expense

Note 8:  Employee Stock Option Expense

During the nine months ended September 30, 2014, 125,000 options were awarded. For the three months ended September 30, 2014 and 2013, the Company recorded $0.2 million and immaterial amount, respectively of compensation expenses relating to options granted to employees. For the nine months ended September 30, 2014 and 2013,  the Company recorded $0.5 million and $0.1 million, respectively of compensation expenses relating to options granted to employees, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 10: Commitments and Contingencies

Leases

The Company leases its fabrication facilities and headquarters under lease contracts that may be extended until 2027, through the exercise of options at Jazz's sole discretion to extend the lease periods from 2017 to 2022 and from 2022 to 2027. In 2010, the properties which the Company leases for its fabrication facilities and headquarters were sold to a real estate investment firm based in Irvine, California. In connection with the sale, the Company negotiated amendments to its operating leases that confirm the Company's ability to remain in the fabrication facilities through 2027 as described above. In the amendments to its leases, Jazz secured various contractual safeguards designed to limit and mitigate any adverse impact of construction activities on its fabrication operations. In addition, the most recent lease amendment set forth certain obligations of the Company and the landlord, including certain noise abatement actions at the fabrication facility.

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Business and Formation (Details) (Tower [Member])	Sep. 30, 2014
Tower [Member]
Noncontrolling Interest [Line Items]
Interest in subsidiary, Jazz Technologies, Inc.	100.00%

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Wells Fargo Asset-Based Revolving Credit Line (Details) (Revolving Credit Line [Member], USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Line of Credit Facility [Line Items]
Term	5 years
Maturity	Dec. 31, 2018
Maximum borrowing amount	$ 70
Borrowing availability	51
Amount outstanding	$ 24
Minimum [Member] | Prime Rate [Member]
Line of Credit Facility [Line Items]
Basis spread	0.50%
Minimum [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Basis spread	1.75%
Maximum [Member] | Prime Rate [Member]
Line of Credit Facility [Line Items]
Basis spread	1.00%
Maximum [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Basis spread	2.25%

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Condensed Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Condensed Consolidated Statements of Comprehensive Loss [Abstract]
Net income (loss)	$ 1,327	$ (2,992)	$ (9,132)	$ (8,536)
Change in employees plan assets and benefit obligations	(565)	(446)	(1,695)	(1,326)
Comprehensive income (loss)	$ 762	$ (3,438)	$ (10,827)	$ (9,862)

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Wells Fargo Asset-Based Revolving Credit Line

9 Months Ended

Sep. 30, 2014

Wells Fargo Asset-Based Revolving Credit Line [Abstract]

Wells Fargo Asset-Based Revolving Credit Line

Note 4:  Wells Fargo Asset-Based Revolving Credit Line

In December 2013, the Company entered into an agreement with Wells Fargo Capital Finance, part of Wells Fargo & Company (“Wells Fargo”), to amend the previous loan and security agreement, for a five-year secured asset-based revolving credit line in the total amount of up to $70 million, maturing in December 2018 (the “Credit Line Agreement”). Loans under the Credit Line Agreement bear interest at a rate equal to, at lender's option, either the lender's prime rate plus a margin ranging from 0.50% to 1.0% or the LIBOR rate plus a margin ranging from 1.75% to 2.25% per annum.

The outstanding borrowing availability varies from time to time based on the levels of the Company's eligible accounts receivable, eligible equipment, eligible inventories and other terms and conditions described in the Credit Line Agreement. The Credit Line Agreement is secured by the assets of the Company. The Credit Line Agreement contains customary covenants and other terms, including customary events of default. If any event of default occurs, Wells Fargo may declare due immediately, all borrowings under the facility and foreclose on the collateral. Furthermore, an event of default under the Credit Line Agreement would result in an increase in the interest rate on any amounts outstanding. The Company's obligations pursuant to the Credit Line Agreement are not guaranteed by Tower.

Borrowing availability under the Credit Line Agreement as of September 30, 2014 was approximately $51 million, of which approximately $24 million has been utilized as such date. As of September 30, 2014, the Company was in compliance with all the covenants under this facility.

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Notes (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Notes [Abstract]
Loss from notes exchange	$ 9,817,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maturity	Dec. 31, 2018
Maximum borrowing amount	70,000,000
2010 Notes [Member]
Debt Instrument [Line Items]
Debt issuance date	Jul. 01, 2010
Maturity	Jun. 30, 2015
Annual rate	8.00%
Principal amount of debt issued	94,000,000
Principal outstanding	45,000,000
Amount exchanged	45,000,000
Premium rate on redemption of debt, after benchmark date and until maturity	2.00%
Premium rate on redemption of debt, in the event of certain change of control transactions	1.00%
2014 Notes [Member]
Debt Instrument [Line Items]
Debt issuance date	Mar. 25, 2014
Maturity	Dec. 31, 2018
Annual rate	8.00%
Principal outstanding	58,000,000
Repurchase amount	$ 10,000,000
Conversion price	$ 10.07
Premium rate on redemption of debt, in the event of certain change of control transactions	1.00%

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

Schedule of Related Party Balances

	As of September 30, 2014		As of December 31, 2013
Due from related parties (included in the accompanying balance sheets)	$	3,930	$	6,406
Due to related parties (included in the accompanying balance sheets)	$	4,150	$	146