Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 168

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 5
Chunk 168
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 financial
institutions consisting of (i) JA Mitsui Leasing, Ltd., (ii) Mitsubishi HC Capital Inc., and (iii) BOT Lease Co. Ltd. The 2024 JPY Loan
carries a fixed interest rate of 2% per annum, with principal payable in seven semiannual payments from December 2027 to December 2030.
The 2024 JPY Loan is secured mainly by a lien over the machinery and equipment of TPSCo located in the Uozu and Tonami facilities. The
2024 JPY Loan contains certain financial ratios and covenants, as well as customary definitions of events of default and acceleration
of the repayment schedule. TPSCo’s obligations pursuant to the 2024 JPY Loan are not guaranteed by Tower, NTCJ, or any of their
affiliates. As of December 31, 2024, TPSCo maintained compliance with all of the financial covenants under the 2024 JPY Loan.

44

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES,
ETC.

Our research and development activities are related primarily to
our foundry process by way of improvements, upgrades and development, and have been sponsored and funded by us, with some participation
by the Israeli government through the IIA pursuant to the Innovation Law. Our research and development expenses for the years ended December
31, 2024, 2023 and 2022 were $79.4 million, $79.8 million and $83.9 million, respectively, net of government participation of $0.3 million,
$0.5 million and $0.3 million, respectively.

For a description of our research and development policies and
our patents and licenses, see “ Item 4. Information on the Company - B. Business Overview.”

D. TREND INFORMATION

We operate as a specialty foundry in the semiconductor industry.
The semiconductor industry is historically characterized as highly cyclical, both seasonally and over the long term. Over time, the market
fluctuates, cycling through periods of weak demand, production excess capacity, excess inventory and price pressure, and periods of strong
demand, full capacity utilization, and product shortages, commanding higher selling prices.

There is a trend within the semiconductor industry toward ever-smaller
features and growing wafer sizes. State-of-the-art digital fabs are currently supporting process geometries of down to 3-7 nanometers
on 300mm wafers.