Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 55

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 55
---
, alternative solutions would need to be implemented to meet customer demand for capacity at Fab
3, including through cross qualification of process technologies at our other fabs. To that end, we would need to invest significant
amounts to acquire process equipment tools to increase the capacity and capabilities in certain of our other fabs, primarily Fab 2, Fab
7 and Fab 9, for certain of our technologies that currently are processed by Fab 3, such as SiGe and SiPho, aiming to qualify the required
tools and technologies in such fabs prior to the end of the Fab 3 lease. See “ Item 3. Key Information - D. Risk Factors - Risks
Affecting Our Business - Risks relating to the Fab 3 lease could harm our business, operations and financial results. ”

Uozu E Tonami CD and Arai E Fabs

In 2014, we acquired a 51% equity stake in TPSCo, a company initially
formed by Panasonic Corporation to provide foundry wafer services to Panasonic and other third-party customers, using three factories
(Uozu E, Tonami CD and Arai E) located in Hokuriku, Japan, established by Panasonic. Pursuant to the transaction, Panasonic transferred
its capacity tools (8 inch and 12 inch) at these three fabs to TPSCo. These fabs support geometrics down to 65 nanometer. The fabs’
land and buildings are leased by PSCS (now named NTCJ) to TPSCo, under a long-term capital lease, with a term until March 2032. As part
of the TPSCo agreements, at the request of Panasonic (through PSCS; since 2020, named NTCJ), the operations in Japan were reorganized
and restructured such that the Arai factory, which solely supported NTCJ and did not serve Tower or TPSCo’s foundry customers, ceased
operations effective July 2022. The Uozu and Tonami facilities remain unchanged.

An earthquake in January 2024 caused temporary disruptions at the
Uozu and Tonami facilities, but operations have since fully recovered.

Fab 9

During 2016, we acquired Fab 9 located in San Antonio Texas, U. S.
from Maxim. The assets and related business that we acquired from Maxim are held and conducted through a wholly-owned U. S. subsidiary,
Tower SA. Fab 9 supports process geometries ranging from 0