FORMATION OF PDMCX JOINT VENTURE

6 Months Ended

Apr. 30, 2017

FORMATION OF PDMCX JOINT VENTURE [Abstract]

FORMATION OF PDMCX JOINT VENTURE

NOTE 15 - FORMATION OF PDMCX JOINT VENTURE

In May 2017 the Company announced that it had entered into an agreement with Dai Nippon Printing Co., Ltd. (DNP) to form a joint venture to serve semiconductor manufacturers in China. Under the agreement, PDMC will own 50.01% of the joint venture, which will be named Photronics DNP Mask Corporation Xiamen (PDMCX), and a subsidiary of DNP will own the remaining 49.99%. The financial results of the joint venture will be included in Photronics’ consolidated financial statements.

Our previously announced IC investment in China of $160 million will be based in Xiamen, China. Construction of the facility is currently underway, and production is anticipated to commence by the end of 2018. Photronics and DNP will contribute cash, in proportion to their ownership percentages, over five years to fund the equity portion of the investment. The joint venture, itself, may also fund a portion of the investment with local borrowings. The formation of the joint venture, which is subject to regulatory approvals and customary closing conditions, is expected to be completed by the end of the Company’s fiscal year 2017.