Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 123

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 123
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ings: (i) the 2024 JPY Loan, in a
principal amount of approximately $100 million, bearing a fixed interest rate of 2% per annum; and (ii) approximately $45 million of liabilities
under equipment capital lease agreements with an annual interest rate of approximately 1.95%. However, as of December 31, 2024, we had
approximately $71 million of cash and cash equivalents held in JPY currency accounts, partially mitigating the above JPY debt exposure.
Based on our cash and cash equivalents and the terms of our debt financings as of December 31, 2024, an assumed 10% appreciation of the
JPY against the USD rate as of December 31, 2024 (from 156.6 JPY/$ to 142.4 JPY/$), would not have a material effect on our balance sheet
as of December 31, 2024.

79

Assuming a 10% appreciation of the JPY against the USD on December
31, 2024 (from 156.62 JPY/$ to 142.39 JPY/$), the effective impact on our statement of operating results would be lower profitability
(higher operating expenses, net of higher revenue) by approximately $5 million, which would be partially offset by the net impact of the
hedging using the above-described cylinder transactions and our natural hedging.

The USD cost of the Company’s operations in Israel is influenced
by changes in the USD-to-NIS exchange rate, with respect to expenses and costs that are denominated in NIS. During the year ended
December 31, 2024, the USD appreciated against the NIS by 0.6%, as compared to 3.1% appreciation during the year ended December 31, 2023.
Appreciation of the NIS may increase the costs, in USD terms, of our Israeli facility, such as utilities, taxes and labor costs that are
denominated in NIS, which may lead to erosion of profit margins. We use foreign currency cylinder and forward transactions to hedge a
portion of this currency exposure and maintain it within a pre-defined fixed range.

Assuming a 10% appreciation of the NIS against the USD on December
31, 2024 (from 3.65 NIS/$ to 3.32 NIS/$), the effective impact on our quarterly Israeli expenses would be higher operating expenses by
approximately $4 million, which would