Business overview
INFORMATION ON THE COMPANY A. HISTORY AND DEVELOPMENT OF THE COMPANY We are a pure-play independent specialty foundry, and as such we are dedicated to providing high-value, high-quality, processed wafers to our customers for their end products and end users. Our foundry processes use chemical materials, chemical processes and other materials and equipment on silicon wafers, based on the design specifications of our customers. As a pure-play foundry, we do not offer products of our own. We currently offer process technology geometries of 0.35, 0.18, 0.16 and 0.13 -micron on 200-mm wafers and 65 nanometer on 300-mm wafers. We also provide design support and complementary technical services.
Our customers and/or our customers’ customers use our wafers in their end products, which are sold and/or used in diverse markets, including consumer applications, personal computers, communications, data centers, handsets and smartphones, automotive, industrial, aerospace and medical devices. We are focused on establishing leading market share in high-growth specialized markets by providing our customers with high-value, high quality, wafer foundry services. We use standard analog CMOS process technology, as well as specialized specific technologies including CMOS image sensors, non-imaging sensors, micro-electromechanical systems (MEMS), wireless antenna switch Silicon-on-Insulator (SOI), mixed-signal, radio frequency CMOS (RFCMOS), bipolar CMOS (BiCMOS), silicon-germanium BiCMOS (SiGe BiCMOS or SiGe), silicon photonics (SiPho), including silicon and advanced low-loss silicon nitride waveguides, high voltage CMOS, and power management technologies.
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To better serve our customers, we have developed and are continuously expanding our technology offerings in these fields. Through our experience and expertise gained during more than thirty years of operation, we differentiate ourselves by creating a high level of value for our customers through innovative technological processes, design and engineering support, competitive operational indices, and dedicated customer service. 22 Tower Semiconductor Ltd., an Israeli company, was founded in 1993 with the acquisition of National Semiconductor’s 150-mm wafer fabrication facility located in Migdal Haemek, Israel, known as our Fab 1 facility, and commenced operations as an independent foundry. During 2025, in response to anticipated changes in market dynamics and customer demand, we discontinued operations at Fab 1 and consolidated certain flows into Fab 2, also located in Migdal Haemek, Israel, in order to streamline our production processes and enhance our overall efficiency.
We are currently commencing use of some of the Fab 1 facility for the expansion of certain Fab 2 activities. In 2003, we commenced production at Fab 2, a wafer fabrication facility we established in Migdal Haemek, Israel. Fab 2 currently supports geometries of 0.18- and 0.13-micron, utilizing advanced CMOS technology, including SiGe, SiPho, CMOS image sensors, magnetic sensors, advanced analog, RF (radio frequency) - specifically RF switches on SOI - power ICs, power discrete, and mixed-signal technologies. In 2008, we merged with Tower NPB, which holds 100% of NPB Co. and operates Fab 3, located in Newport Beach, California, U.S. Fab 3 specializes in specialty process technologies for silicon photonics and analog and mixed-signal semiconductor devices, and supports geometries ranging from 0.50- to 0.13-micron.
NPB Co.’s specialty process technologies support applications requiring advanced analog, radio frequency, high voltage, bipolar, SOI, silicon germanium bipolar complementary metal oxide (BiCMOS), and silicon photonics processes. In 2014, we acquired from Panasonic 51% of a newly established company, TPSCo, which became a foundry for the sale of wafers to Panasonic and other third-party customers, using three factories established by Panasonic in Hokuriku, Japan (Uozu E, Tonami CD and Arai E). Pursuant to the transaction, Panasonic transferred its capacity tools (8 inch and 12 inch) at these three fabs to TPSCo. TPSCo focuses on 65nm and 180nm geometries for RF, power management and CMOS image sensor wafers, products and applications.
In July 2022, the operations in Japan were reorganized and restructured such that the Arai factory, which solely served NTCJ and did not serve Tower or TPSCo foundry customers, ceased operations, while the operations at the Uozu and Tonami facilities remained unchanged. In March 2026, we signed an agreement for a strategic restructuring of our Japan operations, under which Tower will take full ownership of the 300mm Fab 7 to be organized under a wholly owned Japanese subsidiary of Tower, while NTCJ will take full ownership of the 200mm Fab 5. As part of this restructuring, the companies will enter into mutual long-term supply agreements to ensure continued support for the existing customers of both companies.
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Source: 20-F · Period ended December 31, 2025 · View report
Latest results
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Original excerpts. Reporting periods, units and comparisons are retained in the text.
Revenue
Our customers and/or our customers’ customers use our wafers in their end products, which are sold to and/or used in diverse markets, including consumer applications, personal computers, wireless and wired communication (including data centers), imaging, automotive, industrial, aerospace and medical devices. The technology platforms we offer are focused on the mega trends of seamless connectivity, green initiatives and interactive smart systems. For the year ended December 31, 2025, our revenues were derived from customers located around the globe, of which 42% were located in the United States, 13% in Japan, 39% in Asia (excluding Japan) and 6% in Europe, as compared to 42%, 16%, 33% and 9%, respectively, for the year ended December 31, 2024.
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For the year ended December 31, 2025, 11% of our revenues were derived from NTCJ, 39% of our revenues were derived from an additional seven customers, each comprising between 4% to 7% of our revenues, and the remaining 50% of our revenues were derived from many other smaller customers, as compared to 13% derived from NTCJ, 27% derived from an additional four customers, each comprising between 3% to 11% of our revenues, and the remaining 60% derived from many other smaller customers for the year ended December 31, 2024. In order to attract and retain our customers, in 2025 and 2024, we made gross investments of $444 million and $436 million, respectively, in property and equipment across the fabs in Israel, Italy, the United States and Japan.
Cash flow & liquidity
During the year ended December 31, 2025, the USD appreciated against the Euro by 12.8%, compared to a 5.9% depreciation during the year ended December 31, 2024. 44 B. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2025, we had an aggregate of $235.4 million in cash and cash equivalents, as compared to $271.9 million as of December 31, 2024. The principal cash flow items for the year ended December 31, 2025 were as follows: $395.5 million of net cash provided by operating activities; $436.5 million invested in property and equipment, net; comprised of $444.4 million total investments and $7.9 million of proceeds related to sale and disposal of property and equipment $38.5 million received from sales of short-term deposits, net; and $33.4 million of net cash used in financing activities.
Management commentary
OPERATING AND FINANCIAL REVIEW AND PROSPECTS The information contained in this section should be read in conjunction with our audited consolidated financial statements and the related notes thereto contained in this annual report. Our financial statements have been prepared in accordance with U.S. GAAP. The following discussion and analysis may contain forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D.
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Risk Factors” and elsewhere in this annual report. 39 A. OPERATING RESULTS OVERVIEW We are a pure-play independent specialty foundry dedicated to providing wafers and engineering services based on the design specifications of our customers. As a pure-play foundry, we do not offer products of our own. We currently offer process technology geometries mainly consisting of 0.35, 0.18, and 0.13-micron on 200-mm wafers and 65 nanometer on 300-mm wafers. We also provide design support and complementary technical services.
Our customers and/or our customers’ customers use our wafers in their end products, which are sold to and/or used in diverse markets, including consumer applications, personal computers, wireless and wired communication (including data centers), imaging, automotive, industrial, aerospace and medical devices. The technology platforms we offer are focused on the mega trends of seamless connectivity, green initiatives and interactive smart systems. For the year ended December 31, 2025, our revenues were derived from customers located around the globe, of which 42% were located in the United States, 13% in Japan, 39% in Asia (excluding Japan) and 6% in Europe, as compared to 42%, 16%, 33% and 9%, respectively, for the year ended December 31, 2024.
For the year ended December 31, 2025, 11% of our revenues were derived from NTCJ, 39% of our revenues were derived from an additional seven customers, each comprising between 4% to 7% of our revenues, and the remaining 50% of our revenues were derived from many other smaller customers, as compared to 13% derived from NTCJ, 27% derived from an additional four customers, each comprising between 3% to 11% of our revenues, and the remaining 60% derived from many other smaller customers for the year ended December 31, 2024. In order to attract and retain our customers, in 2025 and 2024, we made gross investments of $444 million and $436 million, respectively, in property and equipment across the fabs in Israel, Italy, the United States and Japan.
KEY FACTORS AFFECTING OUR RESULTS The following are key factors that impact our results of operations: Ability to attract and retain customers. We are a trusted, customer-oriented service provider that has built a solid reputation in the foundry industry for over thirty years. We have built strong relationships with our customers. Our consistent focus on providing high-quality, value-add services, including engineering and design support, has allowed us to attract customers seeking to work with a proven provider of foundry solutions. Our emphasis on close collaboration with customers, and on accelerating time-to-market and the performance of their next-generation products, has enabled us to maintain a high customer retention rate while increasing the number of new customers and products.
We continuously aim to expand our capacity footprint and business by addressing the future needs of our existing customers and attracting new customers that will utilize our existing facilities, some of which have recently undergone additional capacity expansion projects. We seek to acquire external capacity through acquisitions of existing fabs or by establishing new fabs, as we have done in the past, independently or through third-party collaborations, utilizing existing resources or additional funding (which may include cash, equity or in-kind investment). We also offer a wide range of support services for the establishment of new facilities or the ramp-up of existing facilities owned by third parties, using our technological, operational and integration expertise.
For these services, we receive payments based on the achievement of pre-defined milestones and may also be entitled to certain capacity allocation and other rights. 40 Design wins with new and existing customers. We work with our customers and potential customers to understand their product roadmaps and strategies. We consider design wins to be critical to our future success. We define a design win as the successful completion of the evaluation stage, where a customer has verified that our platform process meets its requirements and has qualified our libraries and IP for its products. The revenue generated from each design win can vary significantly.
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Annual report details
Read annual management analysis & tone analysis
Annual MD&A Tone Analysis
+100.0
2 · 100.0%Positive terms
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747Analyzed annual MD&A words
Only the extracted annual management discussion is evaluated using dictionary version 1.1. Score = (positive − negative) ÷ matched terms × 100. Quarterly reports and current filings are excluded. This lexical measure does not assess financial health and may not fully capture context or negation.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS The information contained in this section should be read in conjunction with our audited consolidated financial statements and the related notes thereto contained in this annual report. Our financial statements have been prepared in accordance with U.S. GAAP. The following discussion and analysis may contain forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D.
Risk Factors” and elsewhere in this annual report. 39 A. OPERATING RESULTS OVERVIEW We are a pure-play independent specialty foundry dedicated to providing wafers and engineering services based on the design specifications of our customers. As a pure-play foundry, we do not offer products of our own. We currently offer process technology geometries mainly consisting of 0.35, 0.18, and 0.13-micron on 200-mm wafers and 65 nanometer on 300-mm wafers. We also provide design support and complementary technical services.
Our customers and/or our customers’ customers use our wafers in their end products, which are sold to and/or used in diverse markets, including consumer applications, personal computers, wireless and wired communication (including data centers), imaging, automotive, industrial, aerospace and medical devices. The technology platforms we offer are focused on the mega trends of seamless connectivity, green initiatives and interactive smart systems. For the year ended December 31, 2025, our revenues were derived from customers located around the globe, of which 42% were located in the United States, 13% in Japan, 39% in Asia (excluding Japan) and 6% in Europe, as compared to 42%, 16%, 33% and 9%, respectively, for the year ended December 31, 2024.
For the year ended December 31, 2025, 11% of our revenues were derived from NTCJ, 39% of our revenues were derived from an additional seven customers, each comprising between 4% to 7% of our revenues, and the remaining 50% of our revenues were derived from many other smaller customers, as compared to 13% derived from NTCJ, 27% derived from an additional four customers, each comprising between 3% to 11% of our revenues, and the remaining 60% derived from many other smaller customers for the year ended December 31, 2024. In order to attract and retain our customers, in 2025 and 2024, we made gross investments of $444 million and $436 million, respectively, in property and equipment across the fabs in Israel, Italy, the United States and Japan.
KEY FACTORS AFFECTING OUR RESULTS The following are key factors that impact our results of operations: Ability to attract and retain customers. We are a trusted, customer-oriented service provider that has built a solid reputation in the foundry industry for over thirty years. We have built strong relationships with our customers. Our consistent focus on providing high-quality, value-add services, including engineering and design support, has allowed us to attract customers seeking to work with a proven provider of foundry solutions. Our emphasis on close collaboration with customers, and on accelerating time-to-market and the performance of their next-generation products, has enabled us to maintain a high customer retention rate while increasing the number of new customers and products.
We continuously aim to expand our capacity footprint and business by addressing the future needs of our existing customers and attracting new customers that will utilize our existing facilities, some of which have recently undergone additional capacity expansion projects. We seek to acquire external capacity through acquisitions of existing fabs or by establishing new fabs, as we have done in the past, independently or through third-party collaborations, utilizing existing resources or additional funding (which may include cash, equity or in-kind investment). We also offer a wide range of support services for the establishment of new facilities or the ramp-up of existing facilities owned by third parties, using our technological, operational and integration expertise.
For these services, we receive payments based on the achievement of pre-defined milestones and may also be entitled to certain capacity allocation and other rights. 40 Design wins with new and existing customers. We work with our customers and potential customers to understand their product roadmaps and strategies. We consider design wins to be critical to our future success. We define a design win as the successful completion of the evaluation stage, where a customer has verified that our platform process meets its requirements and has qualified our libraries and IP for its products. The revenue generated from each design win can vary significantly.
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