Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 64

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 64
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31, 2024 amounted to $207.2
million as compared to $519.5 million for the year ended December 31, 2023. The $312.3 million decrease in net profit is primarily due
to the decrease in operating profit (in connection with the merger-contract termination fee received in 2023), partially offset by
the decrease in income tax expense, net, described above.

Net loss attributable to non-controlling interest for the year
ended December 31, 2024 amounted to $0.6 million as compared to net profit attributable to non-controlling interest of $1.0 million for
the year ended December 31, 2023. The $1.6 million decrease resulted from a $3.4 million decrease in the net profit of TPSCo, in which
we hold 51%.

Net profit attributable to the Company for the year ended December
31, 2024 amounted to $207.9 million as compared to $518.5 million for the year ended December 31, 2023. The $310.6 million decrease in
net profit attributable to the Company is mainly due to the decrease in net profit of $312.3 million, offset by the $1.6 million decrease
in net profit attributable to non-controlling interest, as described above.

Impact of Currency Fluctuations

We currently operate in four different regions: the United States,
Japan, Israel and Italy. The functional currency of our entities in the United States, Israel and Italy is the USD. The functional currency
of our operations in Japan is the JPY. Our expenses and costs are denominated mainly in USD, JPY, NIS and Euro, revenues are denominated
mainly in USD and JPY, and cash from operations, investing and financing activities are denominated mainly in USD, JPY and NIS.
Therefore, we are exposed to the risk of currency exchange rate fluctuations in Japan, Israel and Italy.

The majority of TPSCo’s revenues are denominated in JPY and
the majority of TPSCo’s expenses and costs are denominated in JPY, which limits the exposure to fluctuations of the USD-to-JPY exchange
rate on TPSCo’s results of operations. In order to mitigate a portion of the net exposure to the USD-to-JPY exchange rate, we have
engaged in cylinder hedging transactions to contain the currency’s fluctuation within a pre-defined, fixed range. During the year
ended December