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

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 25
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 shares, which may not be favorable.

RISKS RELATED TO OUR OPERATIONS IN ISRAEL

Political,
economic and military instability in Israel and the Middle East region may harm our business.

Our Fab 2 facility, our design center and certain of our corporate
and sales offices are located in Israel. In addition, most our officers and directors are residents of Israel. Accordingly, political,
economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the
State of Israel in 1948, Israel has been subject to armed conflicts with neighboring countries, as well as terrorist activities, with
varying levels of severity.

Due to Israel’s current war against Hamas and the attacks
against Israel by Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through proxies like the Houthi movement
in Yemen and Iranian proxies in Iraq, military activity and hostilities continue to exist at varying levels of intensity and the situation
in Israel and the region remains volatile, with the potential for escalation into a broader regional conflict involving additional terrorist
organizations and possibly other countries.

17

Since the war and hostilities began on October 7, 2023, several
hundred thousand Israeli military reservists were drafted. While we have not been materially adversely impacted to date by any absences
of our personnel, the absence of a significant number of our employees (including key employees) related to their, or their spouse’s,
active military reserve duty, which may be for extended periods of time, could disrupt our operations and materially and adversely affect
our Israeli operations, as well as our business and results of operations.

We have not been materially adversely impacted by Israel’s
current war to date, and have robust business continuity procedures in place, including multi-site qualification of certain process flows
and information technology safeguards. However, the intensity and duration of Israel’s current war is difficult to predict at this
stage, as are such war’s implications on our business and operations in Israel and on Israel’s economy in general. These events
could lead to increased costs, risks to employee safety, and challenges to business continuity, potentially resulting in financial losses.

Our property and business interruption insurance may not adequately
compensate us for losses that we may incur, and any losses or damages incurred by us may have a material adverse effect on our business.
Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks
or acts of war, we cannot assure you that this