Investment in TowerJazz Semiconductor Ltd

12 Months Ended

Jan. 01, 2012

Investment in TowerJazz Semiconductor Ltd [Abstract]

Investment in TowerJazz Semiconductor Ltd

INVESTMENT IN TOWERJAZZ SEMICONDUCTOR LTD.

During the first quarter of fiscal year 2010, the Company sold 700,000 of the TowerJazz ordinary shares which resulted in a gain of $993,000. In the third quarter of 2010, the Company recorded $209,000 of tax benefit related to accumulated other comprehensive income, or AOCI, attributable to unrealized gains on investment in TowerJazz. As of January 1, 2012, the Company held 644,543 available-for-sale TowerJazz ordinary shares with a net unrealized gain of $113,272 recorded in AOCI on the balance sheet which includes the tax benefit above and the difference between the cost of of $0.13 per share and carrying value of $0.63 per share, their fair value on the last trading day of the reporting period. The fair value of TowerJazz marketable securities as of January 1, 2012 was determined based on “Level 1” inputs as described in Note 7.

During the years of 2001 and 2002, the Company also received $4.7 million in prepaid wafer credits in partial consideration for the investment. Subsequently, the Company has utilized $1.8 million of these credits and impaired their value by $2.9 million. As of January 1, 2012, the Company had a zero carrying value for these wafer credits.