Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 53

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 53
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S. r. l., incorporated in Italy, shares capacity with ST in a 300mm facility owned by ST located in Agrate, Italy.

D. PROPERTY, PLANTS AND EQUIPMENT

WAFER FOUNDRY FACILITIES

We process semiconductor wafers at six facilities: Fab 2 facility
in Israel, Fab 3 in Newport Beach, California in the U. S., TPSCo’s two fabs (Uozo E and Tonami CD) in Japan, Fab 9 in San Antonio,
Texas, USA, and TSIT’s Fab10 in Agrate, Italy, in which we share capacity with ST in a 300mm fabrication facility established by
ST. In addition, under an agreement we entered into in September 2023, Tower has access to a 300mm capacity corridor at Intel’s
facility in New Mexico, U. S., referred to as Fab 11, for which the necessary equipment is being ordered, and once fully installed, it
will be qualified for production.

The capacity in each of our facilities at any particular time varies
based on the combination of the processes being used and the wafer mix being processed at such time. Therefore, capacity may be significantly
lower at certain times as a result of certain combinations that may require more processing steps than others. We have the ability to
rapidly change the mix of processes in use in order to respond to changing customer needs and to maximize utilization of the fab. In general,
capacity increases have been achieved through the addition of equipment, improvement in equipment utilization, and the reconfiguration
and expansion of existing clean room areas.

Capital expenditures in 2024 and 2023 were $432 million and $432
million, respectively, net of proceeds from sale of equipment and fixed assets of $5 million and $12 million, respectively.

Fab 1

We acquired our Fab 1 facility in Migdal Haemek, Israel, from National
Semiconductor in 1993, which had operated the facility since 1986. We occupy the facility under a long-term lease from the Israel Lands
Authority which expires in 2032 During the first quarter of 2025, in response to anticipated changes in market dynamics and customer demand,
we discontinued the lower-margin legacy 150mm process flows, ceased operations in Fab 1 and consolidated certain strategic flows into
Fab 2, also located in Israel, in order to streamline our production processes and enhance our overall efficiency. The Fab 1 facility
includes an