Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
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Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
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ITEM
3. KEY INFORMATION

A. [RESERVED.]

B. CAPITALIZATION AND INDEBTEDNESS

Not applicable.

C. REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

D. RISK FACTORS

Our business faces many risks. Any of the risks discussed below
may have an adverse impact on our business, financial condition and operating results.

RISKS AFFECTING OUR BUSINESS

Reductions in demand for our foundry services,
which are dependent on the demand in our customers’ end markets that are typically cyclical and volatile, may adversely affect our
future revenues, business and financial results and position.

Our customers use our wafers in a wide variety of applications,
in markets which are typically cyclical, e. g., communications market, consumer devices and applications, personal computers, handsets,
smartphones and other types of devices. Any significant decrease in the demand for these applications, devices or products may significantly
decrease our revenue and margins due to lower demand for our wafers and/or lower selling prices per wafer. As demonstrated in the past
by downturns in demand in high technology markets, market conditions can change rapidly, without warning or advance notice. In such instances,
our customers may experience inventory buildup and/or difficulties in selling their products and, in turn, may reduce or cancel orders
for wafers from us and/or ask for a reduced selling price, which may harm our revenue, business and profitability. The timing, severity
and recovery of these downturns cannot be predicted.

Because our services may be used in many new applications, it is
difficult to accurately forecast demand for all markets. If demand is lower than expected, we may have excess capacity and our revenue
may not be sufficient to cover all our costs and repay all our debt, which may adversely affect our financial results and financial position.

Reliance on acquisitions and/or gaining additional
capacity for growth involves risks and uncertainties that may adversely affect our future revenues, business and operating results.

We may decide to try to attract new customers and expand our business
with existing customers and/or enter into new markets by expanding our capacity footprint and business, as we have done in the past, through
acquisitions of, or joint ventures with, existing facilities or establishing new facilities, or through acquiring access to additional
capacity or capacity enhancement in advanced technologies, which may be obtained independently, through capital lease transactions or
through third-party collaborations. Our success at such expansion is dependent, in