Tower Semiconductor Reports 2024 First Quarter Financial Results
Reiterating Revenue Growth throughout the YearMIGDAL HAEMEK, ISRAEL – May 9, 2024 – Tower Semiconductor (NASDAQ: TSEM & TASE: TSEM)
reports today its results for the first quarter ended March 31, 2024.
First Quarter of 2024 Results Overview
Revenue for the first quarter of 2024 was $327 million as compared to $352 million for the fourth
quarter of 2023. Revenue for the first quarter of 2023 was $356 million.
Gross profit for the first quarter of 2024 was $73 million as compared to $84 million for the fourth
quarter of 2023. Gross profit for the first quarter of 2023 was $96 million.
Operating profit for the first quarter of 2024 was $34 million, as compared to $45 million in the fourth
quarter of 2023. Operating profit for the first quarter of 2023 was $89 million and included $32 million
restructuring income, net from the previously disclosed reorganization and restructure of our Japan
operations during 2022.
Net profit for the first quarter of 2024 was $45 million, or $0.40 basic and diluted earnings per share, ascompared to net profit of $54 million, or $0.49 basic and $0.48 diluted earnings per share for the fourth
quarter of 2023. Net profit in the first quarter of 2023 was $71 million, or $0.65 basic and $0.64 diluted
earnings per share and included $11 million restructuring income, net.

Cash flow generated from operating activities in the first quarter of 2024 was $110 million.
Investments in equipment and other fixed assets were $98 million, net and debt payments totaled $8
million, net.
In the fourth quarter of 2023, cash flow generated from operating activities was $126 million,
investments in equipment and other fixed assets were $136 million, net and debt payments totaled $9
million, net.

Corporate Credit Rating
In May 2024, Standard & Poor’s Maalot (an Israeli rating company that is fully owned by S&P Global
Ratings) completed its annual rating review for the Company and re-affirmed its corporate credit rating
as “ilAA“/ stable.
Business Outlook
Tower Semiconductor guides revenue for the second quarter of 2024 to be $350 million, with an upward
or downward range of 5%.
Mr. Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, stated: “As we move throughthe year, we remain focused on and confident about continuous growth, driven by the performance ofseveral of our differentiated technologies, critical to present market needs with market leader
customers who are true partners. This growth is against the landscape of a not yet robust market.
Recent customer forecasts give reason to believe market recovery is forthcoming.”

Teleconference and Webcast
Tower Semiconductor will host an investor conference call today, Thursday, May 9, 2024, at 10:00 a.m.
Eastern time (9:00 a.m. Central time, 8:00 a.m. Mountain time, 7:00 a.m. Pacific time and 5:00 p.m.
Israel time) to discuss the Company’s financial results for the first quarter of 2024 and its businessoutlook.

This call will be webcast and can be accessed via Tower Semiconductor’s website at
www.towersemi.com or by calling 1-888-281-1167 (U.S. Toll-Free), 03-918-0610 (Israel), +972-3-9180610 (International). For those who are not available to listen to the live broadcast, the call will bearchived on Tower Semiconductor’s website for 90 days.
The Company presents its financial statements in accordance with U.S. GAAP. The financial information included in the tables below includes unauditedcondensed financial data. Some of the financial information, which may be used and/ or presented in this release and/ or prior earnings related filings and/or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, which we may describe as adjusted
financial measures and/ or reconciled financial measures, are non-GAAP financial measures as defined in Regulation G and related reporting requirements
promulgated by the Securities and Exchange Commission as they apply to our Company. These adjusted financial measures are calculated excluding thefollowing: (1) amortization of acquired intangible assets as included in our operating costs and expenses, (2) compensation expenses in respect of equity
grants to directors, officers, and employees as included in our operating costs and expenses, (3) merger contract termination fees received from Intel, net of
associated cost and taxes following the previously announced Intel contract termination as included in net profit and (4) restructuring income, net, which
includes income, net of cost and taxes associated with the cessation of operations of the Arai facility in Japan which occurred during 2022 as included in net
profit. These adjusted financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The tables may
also present the GAAP financial measures, which are most comparable to the adjusted financial measures, as well as a reconciliation between the adjusted
financial measures and the comparable GAAP financial measures. As used and/ or presented in this release and/ or prior earnings related filings and/ or in
related public disclosures or filings with respect to the financial statements and/ or results of the Company, as well as may be included and calculated in thetables herein, the term Earnings Before Interest Tax Depreciation and Amortization which we define as EBITDA consists of operating profit in accordancewith GAAP, excluding (i) depreciation expenses, which include depreciation recorded in cost of revenues and in operating cost and expenses lines (e.g,research and development related equipment and/ or fixed other assets depreciation), (ii) stock-based compensation expense, (iii) amortization of acquired
intangible assets, (iv) merger contract termination fees received from Intel, net of associated cost following the previously announced Intel contract
termination, as included in operating profit and (v) restructuring income, net in relation to the Arai facility in Japan, as included in operating profit. EBITDA
is reconciled in the tables below and/or in prior earnings-related filings and/ or in related public disclosures or filings with respect to the financial
statements and/ or results of the Company from GAAP operating profit. EBITDA and the adjusted financial information presented herein and/ or priorearnings-related filings and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, are not arequired GAAP financial measure and may not be comparable to a similarly titled measure employed by other companies. EBITDA and the adjusted
financial information presented herein and/ or prior earnings-related filings and/ or in related public disclosures or filings with respect to the financial
statements and/ or results of the Company, should not be considered in isolation or as a substitute for operating profit, net profit or loss, cash flows
provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared in accordance with GAAP. The
term Net Cash, as may be used and/ or presented in this release and/ or prior earnings-related filings and/ or in related public disclosures or filings withrespect to the financial statements and/ or results of the Company, is comprised of cash, cash equivalents, short-term deposits, and marketable securities
less debt amounts as presented in the balance sheets included herein. The term Net Cash is not a required GAAP financial measure, may not be comparable
to a similarly titled measure employed by other companies and should not be considered in isolation or as a substitute for cash, debt, operating profit, net
profit or loss, cash flows provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared inaccordance with GAAP. The term Free Cash Flow, as used and/ or presented in this release and/ or prior earnings related filings and/ or in related public
disclosures or filings with respect to the financial statements and/ or results of the Company, is calculated to be net cash provided by operating activities (inthe amounts of $110 million, $126 million and $73 million for the three months periods ended March 31, 2024, December 31, 2023 and March 31, 2023,
respectively) less cash used for investments in property and equipment, net (in the amounts of $98 million, $136 million and $105 million for the threemonths periods ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively). The term Free Cash Flow is not a required GAAP financial
measure, may not be comparable to a similarly titled measure employed by other companies and should not be considered in isolation or as a substitute for
operating profit, net profit or loss, cash flows provided by operating, investing, and financing activities, per share data or other profit or cash flow
statement data prepared in accordance with GAAP.

About Tower Semiconductor
Tower Semiconductor Ltd. (NASDAQ/TASE: TSEM), the leading foundry of high-value analog
semiconductor solutions, provides technology, development, and process platforms for its customers
in growing markets such as consumer, industrial, automotive, mobile, infrastructure, medical andaerospace and defense. Tower Semiconductor focuses on creating a positive and sustainable impact on
the world through long-term partnerships and its advanced and innovative analog technology offering,
comprised of a broad range of customizable process platforms such as SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, non-imaging sensors, displays, integrated power
management (BCD and 700V), photonics, and MEMS. Tower Semiconductor also provides world-classdesign enablement for a quick and accurate design cycle as well as process transfer services including
development, transfer, and optimization, to IDMs and fabless companies. To provide multi-fab
sourcing and extended capacity for its customers, Tower Semiconductor owns two facilities in Israel(150mm and 200mm), two in the U.S. (200mm), two in Japan (200mm and 300mm) which it owns
through its 51% holdings in TPSCo, shares a 300mm facility in Agrate, Italy, with ST, as well as hasaccess to a 300mm capacity corridor in Intel’s New Mexico facility. For more information, please
visit: www.towersemi.com.

CONTACTS:
Noit Levy | Investor Relations | +972 74 737 7556 | noitle@towersemi.com
This press release, including other projections with respect to our business and activities, includes forward-looking statements, which are
subject to risks and uncertainties. Actual results may vary from those projected or implied by such forward-looking statements and you should not place
any undue reliance on such forward-looking statements. Potential risks and uncertainties include, without limitation, risks and uncertainties associatedwith: (i) demand in our customers’ end markets, (ii) reliance on acquisition and/or gaining additional capacity for growth, (iii) difficulties in achieving
acceptable operational metrics and indices in the future as a result of operational, technological or process-related problems, (iv) identifying andnegotiating with third-party buyers for the sale of any excess and/or unused equipment, inventory and/or other assets, (v) maintaining current key
customers and attracting new key customers, (vi) over demand for our foundry services resulting in high utilization and its effect on cycle time, yield andon schedule delivery, as well as customers potentially being placed on allocation, which may cause customers to transfer their business to other vendors,(vii) financial results may fluctuate from quarter to quarter making it difficult to forecast future performance, (viii) our debt and other liabilities that may
impact our financial position and operations, (ix) our ability to successfully execute acquisitions, integrate them into our business, utilize our expanded
capacity and find new business, (x) fluctuations in cash flow, (xi) our ability to satisfy the covenants stipulated in our agreements with our debt holders,(xii) pending litigation, (xiii) meeting the conditions set in approval certificates and other regulations under which we received grants and/or royalties
and/or any type of funding from the Israeli, US and/or Japan governmental agencies, (xiv) receipt of orders that are lower than the customer purchasecommitments and/or failure to receive customer orders currently expected, (xv) possible incurrence of additional indebtedness, (xvi) effect of global
recession, unfavorable economic conditions and/or credit crisis, (xvii) our ability to accurately forecast financial performance, which is affected by limitedorder backlog and lengthy sales cycles, (xviii) possible situations of obsolete inventory if forecasted demand exceeds actual demand when we create
inventory before receipt of customer orders, (xix) the cyclical nature of the semiconductor industry and the resulting periodic overcapacity, fluctuations inoperating results and future average selling price erosion, (xx) obtain financing for capacity acquisition related transactions, strategic and/or other growthor M&A opportunities, including for funding Agrate fab’s significant 300mm capacity investments and acquisition or funding of equipment and other fixed
assets associated with the capacity corridor transaction with Intel as announced in September 2023, in addition to other capacity expansion plans, and thepossible unavailability of such financing and/or the availability of such financing on unfavorable terms, (xxi) operating our facilities at sufficient utilization
rates necessary to generate and maintain positive and sustainable gross, operating and net profit, (xxii) the purchase of equipment and/or raw material(including purchase beyond our needs), the timely completion of the equipment installation, technology transfer and raising the funds therefor, (xxiii)
product returns and defective products, (xxiv) our ability to maintain and develop our technology processes and services to keep pace with newtechnology, evolving standards, changing customer and end-user requirements, new product introductions and short product life cycles, (xxv) competing
effectively, (xxvi) use of outsourced foundry services by both fabless semiconductor companies and integrated device manufacturers, (xxvii) our
dependence on intellectual property rights of others, our ability to operate our business without infringing others’ intellectual property rights and ourability to enforce our intellectual property against infringement, (xxviii) the fab3 landlord’s alleged claims that the noise abatement efforts made thus far
are not adequate under the terms of the amended lease that caused him to request a judicial declaration that there was a material non-curable breach of
the lease and that he would be entitled to terminate the lease, as well the ability to extend such lease or acquire the real estate and obtain the required
local and/or state approvals required to be able to continue operations beyond the current lease term, (xxix) retention of key employees and recruitment
and retention of skilled qualified personnel, (xxx) exposure to inflation, currency rates (mainly the Israeli Shekel, the Japanese Yen and the Euro) andinterest rate fluctuations and risks associated with doing business locally and internationally, as well fluctuations in the market price of our tradedsecurities, (xxxi) meeting regulatory requirements worldwide, including export, environmental and governmental regulations, as well as risks related tointernational operations, (xxxii) potential engagement for fab establishment, joint venture and/or capital lease transactions for capacity enhancement inadvanced technologies, including risks and uncertainties associated with Agrate fab establishment and the capacity corridor transaction with Intel as
announced in September 2023, such as their qualification schedule, technology, equipment and process qualification, facility operational ramp-up,
customer engagements, cost structure, required investments and other terms, which may require additional funding to cover their significant capacity
investment needs and other payments, the availability of which funding cannot be assured on favorable terms, if at all, (xxxiii) potential liabilities, cost andother impact that may be incurred or occur due to reorganization and consolidation of fabrication facilities, including the impact of cessation of operationsof our facilities, including with regard to our 6 inch facility, (xxxiv) potential security, cyber and privacy breaches, (xxxv) workforce that is not unionizedwhich may become unionized, and/or workforce that is unionized and may take action such as strikes that may create increased cost and operational risks,(xxxvi) issuance of ordinary shares as a result of exercise and/ or vesting of any of our employee stock options and/ or restricted stock units, as well as any
sale of shares by any of our shareholders, or any market expectation thereof, as well as issuance of additional employee stock options and/or restricted
stock units, or any market expectation thereof, which may depress the market value of the Company and the price of the company’s ordinary shares andin addition may impair our ability to raise future capital, and (xxxvii) climate change, business interruption due to flood, fire, pandemic, earthquake andother natural disasters, the security situation in Israel, global trade “war” and the current war in Israel, including potential inability to continue
uninterrupted operations of the Israeli fabs, impact on global supply chain to and from the Israeli fabs, power interruptions, chemicals or other leaks or
damages as a result of the war, absence of workforce due to military service as well as risk that certain countries will restrict doing business with Israeli
companies, including imposing restrictions if hostilities in Israel or political instability in the region continue or exacerbate, and other events beyond ourcontrol . With respect to the current war in Israel, if instability in neighboring states occurs, Israel could be subject to additional political, economic, andmilitary confines, and our Israeli facilities’ operations could be materially adversely affected. Any current or future hostilities involving Israel or theinterruption or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial condition of
Israel, could have a material adverse effect on our business, financial condition and results of operations.

A more complete discussion of risks and uncertainties that may affect the accuracy of forward-looking statements included in this press release or which
may otherwise affect our business is included under the heading "Risk Factors" in Tower’s most recent filings on Forms 20-F and 6-K, as were filed with the
Securities and Exchange Commission (the “SEC”) and the Israel Securities Authority. Future results may differ materially from those previously reported. The
Company does not intend to update, and expressly disclaims any obligation to update, the information contained in this release.

# # #(Financial tables follow)

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)(dollars in thousands)
March 31,2024

December 31,
2023

ASSETS
CURRENT ASSETS
Cash and cash equivalents
Short-term deposits
Marketable securities
Trade accounts receivable
Inventories
Other current assets$

Total current assets

260,497
848,522
133,611
159,398
299,377
42,049$260,664
790,823
184,960
154,067
282,688
35,956

1,743,454

1,709,158

1,180,569

1,155,929

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

11,666

12,115OTHER LONG-TERM ASSETS, NET

41,22641,315PROPERTY AND EQUIPMENT, NET

TOTAL ASSETS$

2,976,915$

2,918,517$

57,700169,526
19,732
76,947$

58,952
139,128
18,41860,340

LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESShort-term debt
Trade accounts payable
Deferred revenue and customers' advances
Other current liabilities

323,905

276,838

LONG-TERM DEBT

151,699

172,611

LONG-TERM CUSTOMERS' ADVANCES

22,46525,710

DEFERRED TAX AND OTHER LONG-TERM LIABILITIES

16,277

16,319514,346

491,478

2,462,569

2,427,039

Total current liabilities

TOTAL LIABILITIESTOTAL SHAREHOLDERS' EQUITYTOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$

2,976,915$

2,918,517

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(dollars and share count in thousands, except per share data)

March 31,2024
REVENUES
COST OF REVENUES$

327,238
254,632GROSS PROFIT

Three months ended
December 31,
2023$

351,711267,294

March 31,2023$

355,611259,894

72,606

84,417

95,717

19,951
18,670-38,621

20,84918,401-39,250

19,331
18,629(31,655)
6,305

33,98545,16789,412

FINANCING AND OTHER INCOME, NET

3,984

16,682

6,997

PROFIT BEFORE INCOME TAX

37,96961,84996,409INCOME TAX BENEFIT (EXPENSE), NET

5,078(10,130)(15,041)

43,04751,71981,368

1,587

2,128

(9,966)OPERATING COSTS AND EXPENSES:
Research and development
Marketing, general and administrative
Restructuring income, net *OPERATING PROFITNET PROFITNet loss (income) attributable to non-controlling interest
NET PROFIT ATTRIBUTABLE TO THE COMPANYBASIC EARNINGS PER SHARE$

44,634$53,847$

71,402

$

0.40

$

0.49

$

0.65

110,840

Weighted average number of shares
DILUTED EARNINGS PER SHARE

$

0.40

110,796$

111,627

Weighted average number of shares

0.48

109,961$

111,308

0.64
111,071* Restructuring income, net resulted from the previously disclosed reorganization andrestructure of our Japan operations during 2022.

RECONCILIATION FROM GAAP NET PROFIT ATTRIBUTABLE TO THE COMPANY TO ADJUSTED NET PROFIT ATTRIBUTABLE
GAAP NET PROFIT ATTRIBUTABLE TO THE COMPANY
Stock based compensation
Amortization of acquired intangible assets
Restructuring income, net **ADJUSTED NET PROFIT ATTRIBUTABLE TO THE COMPANY$$

44,634
6,761
448-51,843

$
$

0.47
0.46

$

$

53,847
6,662
442-60,951$$

71,402
6,448
499(10,974)
67,375

$
$

0.55
0.55

$
$

0.61
0.61

ADJUSTED EARNINGS PER SHARE:
Basic
Diluted** Restructuring income, net resulted from the previously disclosed reorganization and restructure of
our Japan operations during 2022, net of taxes.

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIESCONSOLIDATED SOURCES AND USES REPORT (UNAUDITED)(dollars in thousands)

March 31,2024
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIODNet cash provided by operating activities
Investments in property and equipment, net
Debt repaid and others, net
Proceeds from an investment in a subsidiary
Effect of Japanese Yen exchange rate change over cash balance
Investments in short-term deposits, marketable securities and other assets,
net of sale proceeds
CASH AND CASH EQUIVALENTS - END OF PERIOD$$

260,664
110,038(98,018)(8,409)-(2,665)(1,113)
260,497

Three months ended
December 31,
2023
$

$

314,816
126,098(136,426)(8,950)-2,101(36,975)
260,664

March 31,
2023
$

$

340,759
72,727(105,245)(28,796)
1,932
(637)
24,194
304,934

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(dollars in thousands)
Three months ended
December 31,
2023

March 31,2024

March 31,2023

CASH FLOWS - OPERATING ACTIVITIESNet profit for the period$

43,047$51,719$81,368Adjustments to reconcile net profit for the period
to net cash provided by operating activities:
Income and expense items not involving cash flows:
Depreciation and amortization *Effect of exchange rate differences and fair value adjustment
Other expense (income), net

59,544227
5,993

65,178(6,852)(7,692)62,387(926)
815

Trade accounts receivable
Other assets
Inventories
Trade accounts payable
Deferred revenue and customers' advances
Other current liabilities
Other long-term liabilities(6,716)(13,454)(23,703)
32,559(1,931)
16,868(2,396)(1,861)(6,418)27,31030,023(9,902)(15,745)338

7,413(1,138)(57,420)
44,542(15,470)(45,053)(3,791)

Net cash provided by operating activities

110,038

126,098

72,727

Investments in property and equipment, net(98,018)(136,426)(105,245)

Investments in short-term deposits, marketable securities and other assets,
net of sale proceeds(1,113)(36,975)

24,194(99,131)(173,401)(81,051)(8,409)--(8,950)--(28,796)
1,932(8,409)(8,950)(26,864)(2,665)

2,101

(637)

(167)

(54,152)(35,825)

260,664

314,816

340,759

Changes in assets and liabilities:

CASH FLOWS - INVESTING ACTIVITIESNet cash used in investing activities
CASH FLOWS - FINANCING ACTIVITIES
Debt repaid, net
Proceeds from an investment in a subsidiary
Net cash used in financing activities
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGEDECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIODCASH AND CASH EQUIVALENTS - END OF PERIOD$

260,497$

260,664$* Includes amortization of acquired intangible assets and stock based compensation in the amounts of $7,209, $7,104 and $6,947
for the 3 months periods ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

304,934