JERUSALEM (Reuters) - Israeli chipmaker TowerJazz (>> Tower Semiconductor Ltd.) reported record quarterly revenues on Tuesday and said annual earnings growth should accelerate in 2017 as the company takes on new customers.

TowerJazz, which makes chips for smartphones, battery chargers, AC/DC adapters and image sensors, said it earned $49 million excluding one-off items in the third quarter, up from $19 million a year earlier. Revenue grew 34 percent to a quarterly record high of $326 million.

The company was forecast to make $43 million on revenue of $325 million, according to Thomson Reuters I/B/E/S.

It projected fourth-quarter revenue of $340 million, plus or minus 5 percent, for a 34 percent annual gain.

Chief Executive Russell Ellwanger said it was too soon to give a forecast for 2017. "But from a customer demand standpoint, we expect growth in 2017 over 2016," he told Reuters, noting that revenue is expected to reach $1.25 billion this year.

Most of the company's growth is coming from existing customers in its radio frequency technology, image sensor and power management segments, but the number of new clients and partners are expanding and would benefit TowerJazz down the road, Ellwanger said.

TowerJazz, founded in 1993 as Tower Semiconductor, operates two plants in Israel, one in California and three in Japan through its joint venture with Panasonic (>> Panasonic Corporation).

The company lost money for years following heavy investments in its second chip plant in Israel but has become profitable in the past two years.

TowerJazz bought a wafer manufacturing plant in San Antonio, Texas in February to boost capacity and provide potential revenue of up to $200 million annually in the next few years.

Ellwanger said TowerJazz was "actively pursuing" partnerships in China, including plants that get funding from municipalities so that TowerJazz's investment is minimal and where the deal is accretive immediately.

The company is still using cash generation to pay down its debt.

TowerJazz's Nasdaq-listed shares were 4.4 percent higher at a 52-week high of $17.30 in early trading. They are up more than 23 percent this year and are nearing an all-time peak of $18.29 set in March 2015.

(Editing by Ari Rabinovitch and Susan Fenton)

By Steven Scheer

Stocks treated in this article : Panasonic Corporation, Tower Semiconductor Ltd.