Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 49

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 49
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IA-funded technologies to third parties outside Israel requires the prior approval of the IIA, which approval
is generally contingent on payment of a redemption fee, calculated according to a formula under the Innovation Law, which may be in the
amount of up to six times the grant(s) amount (less paid royalties, if any, and depreciation, but no less than the total amount of grants
actually received by us), plus accrued interest.

In addition to the above, we may be required to obtain export licenses
before exporting certain technology or products to third parties and may be required to comply with Israeli, U. S. and other foreign export
regulations, as may be applicable.

Our research and development activities seek to upgrade and improve
our technologies and processes. We maintain a central research and development team primarily responsible for developing cost-effective
technologies to meet our customers’ needs. A substantial portion of our research and development activities are conducted in collaboration
with our customers and equipment vendors. Due to the rapid technological changes in the semiconductor industry, effective research and
development is essential to our success. We plan to continue to invest significantly in research and development activities in order to
develop advanced process technologies for new applications. For information regarding risks relating to development of technology processes
and services, see “ Item 3. Key Information - D. Risk Factors - Risks Affecting Our Business - If
we do not maintain and develop our technology processes and services, we may lose customers and may be unable to attract new ones.”

Research and development expenses for the years ended December
31, 2024, 2023 and 2022 were $79.4 million, $79.8 million and $83.9 million, respectively, net of government participation of $0.3 million,
$0.5 million and $0.3 million, respectively. As of December 31, 2024, we employed 430 professionals in our research and development departments,
52 of whom have PhDs. In addition to our research and development departments located at our facilities in Migdal Haemek, Israel, Newport
Beach, California, San Antonio, Texas and Hokuriku Japan, we also maintain a design center in Netanya, Israel.

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PROPRIETARY RIGHTS

Our success depends in part on our ability to obtain patents, licenses
and other intellectual property rights related to our production processes. To that end, we have obtained certain patents, acquired patent
licenses and intend to continue to seek patents for our intellectual