Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 7

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 7
---
 is common in our industry, a large portion of our total costs
is comprised of fixed costs. Therefore, while during periods in which we operate at high utilization rates we are able to cover our costs,
at times when the utilization rate is low, the reduced revenues may not cover all of the costs since a large portion are fixed costs which
remain constant, irrespective of our capacity utilization. In addition, our depreciation costs and capital expenditure investments, as
common in our industry, are relatively high. Our financial results, including our gross, operating and net profits, may be adversely impacted
if customer demand for our products is not sufficient to enable us to operate our facilities consistently at satisfactory utilization
rates necessary to generate and maintain revenue levels that would cover all of our costs. This issue may be further exacerbated in our
new capacity lines, where we incur fixed costs upon the start of operations while the new lines gradually ramp up utilization, causing
a decrease in our profit margins.

We may be required to obtain financing
for capacity acquisition-related transactions, strategic and/or other growth or M& A opportunities, which we may not be able to obtain.

In order to invest in strategic opportunities in support of our
acquisition and capacity growth plans, business development activities, joint partnerships or other large transactions to expand our capacity,
including the funding of the equipment for the factory being established by ST in Agrate, Italy, the capacity corridor being established
at Intel’s New Mexico fab and the capital expenditure tools required to establish SiPho and SiGe capacity and capabilities in Fabs
2, 7 and 9, acquiring leased assets and/or acquiring and/or establishing additional fabs and/or capacity through other capacity acquisition-related
transactions, we may use our current cash balance and deposits and/or may be required to secure additional funds from financing sources,
including through public or private offerings of equity and/or debt and/or re-financing or other financing alternatives. The timing, terms,
size and pricing of any future fundraising would be subject to the then-prevailing capital market conditions and our business and financial
situation, as well as the need to obtain certain regulatory and other consents. Further, inflation and rising interest rates across the
global economy have resulted in, and may continue to result in, significant disruption of global financial markets, which may reduce and/or
prevent the ability to execute fundraising transactions and may result in less favorable financial terms, such as increased financing
costs and/or higher shareholders’ dilution. There is no assurance that we will be able to