Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 14

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 14
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afers, chemicals, gases and various metals as well as other supplies and require
large amounts of fresh water and electricity. Shortages in supplies of equipment, raw materials and other supplies could occur for various
reasons, including an interruption of supply due to an epidemic, pandemic, war or security situation, increased industry demand or a dispute
with a supplier. Any such shortage or delay in delivery could result in operational delays that may result in a loss of existing and/or
potential new customers and/or a halt of operations, which may have a material adverse effect on our business and financial results.

In addition, although most of the raw materials used in our processes
are available from multiple suppliers, certain materials are purchased through sole-sourced vendors under pre-committed volume contracts
for specified pre-defined quantities that must be purchased on a monthly, quarterly or annual basis. If such predefined quantities are
not required for our operations at any given time, this may result in excess payment and/or expenses write-off in the financial statements
which may adversely impact our financial results.

10

If we are unable to successfully identify and
negotiate with third-party buyers for the sale of any excess and/or unused equipment, inventory and/or other assets, including as a result
of cessation of operations in any of our fabs, our financial results may be harmed.

From time to time, we may decide to cease operations at a certain
facility or discontinue developing certain technology flows due to factors such as changes in company strategy, low margins, low utilization
or low customer demand. This may result in unused equipment, inventory and/or other assets that are no longer required to support
our customers’ needs, which may be sold to third-party buyers. We also have obsolete equipment or inventory from time to time that
we may sell, such as from Fab 1 with lower margin legacy 150mm flows that were discontinued, some of which were consolidated into Fab
2 in order to streamline our production processes and enhance our overall efficiency. If we are unable to successfully identify and negotiate
with potential buyers and sell excess equipment in a timely manner for satisfactory consideration, we may incur losses and additional
liabilities and contingencies, which may have a negative effect on our financial results.

Our exposure to currency exchange and interest
rate fluctuations may impact our costs and financial results.

We currently operate our fabs in four different regions: the United
States, Japan, Israel and Italy. The functional currency of our entities in the United States, Israel and Italy is the USD.