Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 148

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 4
Chunk 148
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 IIA), requires the prior approval of the IIA, which approval, if received, would generally result in the payment of increased royalties, up to  three times the grant(s) amount, depending on the portion of manufacturing performed outside of Israel, plus accrued interest, and the applicable royalty repayment rate could increase.  In addition, the transfer or license of IIA-funded technologies to third parties outside Israel requires the prior approval of the IIA, which approval is generally contingent on payment of a redemption fee, calculated according to a formula under the Innovation Law, which may be in the amount of up to six times the grant(s) amount (less paid royalties, if any, and depreciation, but no less than the total amount of grants actually received by us), plus accrued interest.
 
In addition to the above, we may be required to obtain export licenses before exporting certain technology or products to third parties and may be required to comply with Israeli, U.S. and other foreign export regulations, as may be applicable.
 
Our research and development activities seek to upgrade and improve our technologies and processes. We maintain a central research and development team primarily responsible for developing cost-effective technologies to meet our customers’ needs. A substantial portion of our research and development activities are conducted in collaboration with our customers and equipment vendors. Due to the rapid technological changes in the semiconductor industry, effective research and development is essential to our success. We plan to continue to invest significantly in research and development activities in order to develop advanced process technologies for new applications. For information regarding risks relating to development of technology processes and services, see “Item 3. Key Information—D. Risk Factors—Risks Affecting Our Business— If we do not maintain and develop our technology processes and services, we may lose customers and may be unable to attract new ones.”
 
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. As of December 31, 2024, we employed 430 professionals in our research and development departments, 52 of whom have PhDs. In addition to our research and development departments located at our facilities in Migdal Haemek, Israel, Newport Beach, California, San Antonio, Texas and Hokuriku Japan, we also maintain a design center in Netanya