Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 17

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 17
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 the proprietary rights of others and defending our intellectual property rights. Because
of the complexity of the technologies used and the multitude of patents, copyrights and other overlapping intellectual property rights,
it is often difficult for semiconductor companies to determine infringement. Therefore, the semiconductor industry is characterized by
frequent litigation regarding patent, trade secret and other intellectual property rights. We have been subject to intellectual property
claims from time to time, some of which have been resolved through license agreements, the terms of which have not had a material effect
on our business.

We could be harmed by failure to comply with environmental regulations.

Our business is subject to a variety of laws and governmental regulations
in Israel, the United States, Japan and Italy relating to the use, storage, discharge and disposal of toxic or otherwise hazardous materials
used in our factories. If we fail to use, store, discharge or dispose of hazardous materials appropriately in accordance with applicable
environmental laws or regulations, or if such laws change in the future, we may be subject to substantial liability or may be required
to suspend or significantly modify our operations, which may adversely impact our business and revenues.

12

Our business strategy is premised on the increasing
use of outsourced foundry services on specialty process technologies, which may change in the future.

We operate as an independent semiconductor foundry focused primarily
on specialty process technologies. Our business model assumes that demand for these processes within the semiconductor industry, both
by fabless semiconductor companies and IDMs, will grow and follow the broader trend towards outsourcing foundry operations. If our assumption
does not prove applicable, our business and financial results may be adversely impacted.

If we are unable to collaborate successfully
with design automation vendors and third-party design service companies to meet our customers’ design needs, our business may be
harmed.

We have established relationships with design automation vendors
and third-party design service companies to develop complete design kits that our customers can use to meet their design needs using our
process technologies. Our ability to meet our customers’ design needs successfully, including their schedule and budget requirements,
depends in part on the availability and quality of the relevant services, tools and intellectual property provided by these vendors and
providers. Difficulties or delays in these areas may adversely affect our ability to meet our customers’ needs, thereby potentially
harming our business. In addition, with respect to third party intellectual property that is required for our technology development and
operations, if problems or delays arise with respect to the timely development, quality and provision thereof