Core Insights - Tower Semiconductor is hosting its annual Technical Global Symposium (TGS) for 2024, focusing on "Empowering the Future: Analog Technology Innovations Shaping Our World" [1][2] Event Details - The TGS will take place in two locations: Shanghai, China on September 24, 2024, and Santa Clara, California on November 20, 2024 [5] - The event will feature a keynote session by CEO Russell Ellwanger and technology sessions led by company experts [3] Key Topics - The symposium will cover AI's impact on industries, technology megatrends, and Tower's solutions in connectivity, power applications, and digital imaging [2] - Invited talks will be presented by industry leaders such as Innolight and Nvidia, focusing on optical communication and AI innovations [4] Networking Opportunities - TGS events will provide opportunities for in-person networking and engagement between current and prospective customers and Tower's executives and technical experts [5] Company Overview - Tower Semiconductor is a leading foundry for high-value analog semiconductor solutions, serving markets like consumer, industrial, automotive, mobile, infrastructure, medical, and aerospace [6] - The company operates multiple facilities globally, including two in Israel, two in the U.S., and two in Japan, with access to additional capacity in Italy and New Mexico [6]

Financial Performance - Net profit for the six months ended June 30, 2024, was $99,797 thousand, a decrease from $130,074 thousand for the same period in 2023[20] - Comprehensive income attributable to the company for the six months ended June 30, 2024, was $78,228 thousand, down from $107,232 thousand for the same period in 2023[20] - Revenues for the six months ended June 30, 2024, were $678,419, down 4.8% from $712,802 in the same period of 2023[28] - Gross profit for the six months ended June 30, 2024, was $159,528, representing a gross margin of 23.5%, compared to $182,234 and a margin of 25.6% in 2023[28] - Operating profit decreased to $89,133 for the six months ended June 30, 2024, from $139,941 in the same period of 2023, reflecting a decline of 36.2%[28] - Basic earnings per share for the six months ended June 30, 2024, were $0.88, down from $1.11 in the same period of 2023, a decrease of 20.7%[28] - The company reported a restructuring expense of $6,270 for the six months ended June 30, 2024, compared to a gain of $17,776 in the same period of 2023[28] Assets and Liabilities - Total current assets as of June 30, 2024, increased slightly to $1,710,702 thousand from $1,709,158 thousand as of December 31, 2023[3] - Total liabilities decreased to $449,454 thousand as of June 30, 2024, from $491,478 thousand as of December 31, 2023[3] - Total shareholders' equity increased to $2,512,713 thousand as of June 30, 2024, compared to $2,427,039 thousand as of December 31, 2023[3] - Long-term debt decreased significantly to $126,715 thousand as of June 30, 2024, from $172,611 thousand as of December 31, 2023[3] Cash Flow - Cash provided by operating activities increased to $223,123 for the six months ended June 30, 2024, compared to $148,221 in the same period of 2023, marking a significant increase of 50.5%[22] - Net cash used in investing activities was $194,303 for the six months ended June 30, 2024, compared to $127,869 in the same period of 2023, indicating an increase of 52.0%[22] - Cash and cash equivalents increased to $265,313 thousand as of June 30, 2024, from $260,664 thousand as of December 31, 2023[3] - Cash and cash equivalents at the end of the period were $265,313, a decrease from $318,195 at the end of June 30, 2023[22] Inventory and Receivables - Trade accounts receivable increased to $165,161 thousand as of June 30, 2024, from $154,067 thousand as of December 31, 2023[3] - Inventories decreased slightly to $276,082 thousand as of June 30, 2024, from $282,688 thousand as of December 31, 2023[3] - Deferred revenue and customers' advances increased to $23,988 thousand as of June 30, 2024, from $18,418 thousand as of December 31, 2023[3] Investment Activities - The company invested $68,901 in property and equipment during the six months ended June 30, 2024, compared to $67,967 in the same period of 2023[23]

Financial Data and Key Metrics Changes - Revenue for Q2 2024 reached $351 million, a $24 million increase from the previous quarter, with a net profit of approximately $53 million, resulting in a net margin of about 15% [10][41] - Gross profit for Q2 was $87 million, up $14 million compared to the prior quarter's gross profit of $73 million [41] - Operating profit was $55 million, which included $6 million in restructuring income, marking a $21 million increase from the previous quarter [42][43] - Shareholders' equity reached $2.5 billion at the end of Q2 2024, compared to $2 billion at the same period last year [44] Business Line Data and Key Metrics Changes - RF Infrastructure revenue increased by 50% year-over-year, representing 14% of total quarterly revenue [11] - Silicon Photonics revenue is expected to grow from $30 million in 2023 to above $80 million in 2024, with projections to more than double in 2025 [14] - RF mobile revenue, predominantly RF-SOI, increased approximately 60% year-over-year, representing 31% of total revenue during the quarter [34] - Power IC business revenue increased 60% from Q1, representing 14% of total revenue during the quarter [35] Market Data and Key Metrics Changes - The demand for Silicon Germanium Technology is strongly linked to the growth of AI applications, with expectations for continued high increases in Silicon Photonics revenue due to rising data traffic from AI, cloud computing, and IoT [12][14] - Fab utilization rates for Q2 showed Fab 1 at 75%, Fab 2 at 67%, Fab 3 at 55%, and Fab 7 at 85%, with expectations for substantial increases in Q3 [37] Company Strategy and Development Direction - The company remains focused on driving innovation and enhancing market leadership to deliver sustainable growth [10][11] - Investments are planned for strategic opportunities aligned with the company's vision, including $500 million for the 12-inch factory in Agrate, Italy, and $300 million for equipment in Intel's Fab in New Mexico [53][54] - The company aims to achieve a revenue target of $2.66 billion per annum by optimizing existing facilities and ramping up capacity at new sites [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential quarterly revenue growth throughout 2024, supported by strong demand in the optical space and recovery in mobile [130] - The company anticipates continued growth in Silicon Photonics and RF-SOI, with a robust demand outlook driven by AI and data center needs [12][14][130] Other Important Information - The company released its updated Corporate Sustainability, Environmental, Social, and Governance (ESG) report, highlighting its commitment to environmental stewardship and social responsibility [38] - The company is actively qualifying its Silicon Photonics platform at its San Antonio facility to meet customer demand [32] Q&A Session Summary Question: What is the company's exposure to AI demand? - Management estimates that approximately 50% of current shipments are driven by AI demand, particularly in the context of increased speeds and data center requirements [58][59] Question: How is the transition to 300mm technology progressing? - The transition is going well, with successful sample shipments and ongoing qualification efforts at the Uozu factory in Japan [68] Question: What are the dynamics in the RF-SOI market? - Management noted strong demand for RF-SOI, particularly for advanced platforms, and does not anticipate being impacted by inventory corrections [96][98] Question: What is the expected growth trajectory for the Power IC business? - Management expects to surpass previous revenue levels, with significant growth anticipated from the 300mm platform [90][91] Question: How does the company view its market share in Silicon Photonics? - Management indicated that the company is gaining market share in Silicon Photonics, which is a new market for them, while also maintaining strong relationships with existing customers [72][73]

Financial Results and Projections - Tower Semiconductor's presentation includes forward-looking statements based on current expectations and beliefs, subject to risks and uncertainties[1, 11] - The presentation contains non-GAAP financial measures such as EBITDA, Cash, debt and Net Cash, consistent with previous filings[12] Technology and Applications - Tower Semiconductor utilizes 200mm and 300mm wafer sizes with multiple facilities[5] - Tower RF SOI Technology ranges from 180nm to 65nm nodes[14] - Tower SiPho serves various applications including Quantum Applications and Artificial Intelligence[15, 16] - Tower BCD offers solutions by voltages up to 1500V for Industrial & Automotive applications[21] Market Segments and Revenue Breakdown (Q4 2023 vs Q1 2024) - In Q1 2024, RF Mobile accounted for 37% of revenue, while in Q4 2023 it was 32%[13] - Sensors & Display accounted for 15% of revenue in Q1 2024, compared to 19% in Q4 2023[13] - RF Infrastructure contributed 14% of revenue in Q1 2024, versus 10% in Q4 2023[13] - Power segment accounted for 10% of revenue in Q1 2024, while it was 17% in Q4 2023[13] - Discrete segment contributed 14% of revenue in Q1 2024, compared to 13% in Q4 2023[13]

Financial Data and Key Metrics Changes - Revenue for Q1 2024 was $327 million, a decrease from $352 million in Q4 2023, but within the upper range of guidance [5][19] - Net profit was $45 million, reflecting a net margin of 14%, down from a net profit of $54 million and a margin of 15% in the previous quarter [33] - Gross profit for Q1 was $73 million, compared to $84 million in the prior quarter [41] Business Line Data and Key Metrics Changes - RF Mobile, predominantly RF SOI, represented 37% of revenue in Q1 2024, showing strong demand and capacity utilization [9] - RF Infrastructure business increased to 14% of revenue from 10% in Q4 2023, driven by strong performance in optical transceiver components [27] - Power IC business, excluding Power Discrete, represented 10% of revenue, with expectations for substantial increases in Q2 [15] - Power Discrete business remained stable at 14% of revenue, while Mixed Digital CMOS business accounted for 8% [17] Market Data and Key Metrics Changes - Silicon Photonics currently represents 5% of revenue, with strong momentum driven by AI adoption [29] - The company is experiencing renewed demand in the Silicon Germanium segment due to new high data rate products [30] - Sensors and Displays accounted for 15% of total revenue in Q1, with ongoing development and manufacturing activities [31] Company Strategy and Development Direction - The company plans to invest up to $300 million over the next two and a half years to enhance capacity and capabilities in its New Mexico facility [21] - A revenue target of $2.66 billion per annum is outlined, achievable by loading existing facilities at 85% utilization [22] - The company is focusing on expanding its 5G and Silicon Photonics capabilities to enhance flexibility and support customer needs [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about quarter-over-quarter growth for the remainder of 2024, with guidance for Q2 revenue set at $350 million, plus or minus 5% [5] - The company anticipates a notable increase in imaging revenue from Q1 to Q2, maintaining strong levels throughout the year [15] - Management noted that Q1 was viewed as the low point for the Power business, with expectations for long-term growth thereafter [15][64] Other Important Information - The company received an updated corporate credit rating from Standard & Poor's, reaffirming its rating at ilAA with a stable outlook [34] - As of the end of Q1 2024, total assets reached $2.98 billion, up from $2.58 billion a year earlier [20] Q&A Session Summary Question: Clarification on CapEx expectations - Management indicated that CapEx for 2024 is expected to be around $40 million to $50 million per quarter for Agrate, with additional spending on SiPho and 5G [46][48] Question: Impact of customer forecasts on orders - Management confirmed that customer forecasts have translated into improving orders, particularly in data centers and RF SOI markets [62] Question: Pricing pressure and market recovery - Management noted that while pricing pressure exists, it is manageable through technological advancements and partnerships with customers [131] Question: Contribution of Silicon Photonics to revenue - Management stated that Silicon Photonics is expected to contribute significantly to revenue growth, particularly as the market for 800G and 1.6T systems expands [86][97] Question: Expectations for revenue growth in 2024 - Management expressed confidence in achieving notable growth throughout 2024, with Q2 expected to show substantial increases compared to Q1 [105][171]

MIGDAL HAEMEK, Israel, May 02, 2024 – Tower Semiconductor (NASDAQ/TASE: TSEM), the leading foundry of high-value analog semiconductor solutions, today announced that its President, Dr. Marco Racanelli, will attend the 52nd Annual TD Cowen Technology, Media & Telecom Conference on Wednesday, May 29 and Thursday May 30, 2024. The conference will take place at the InterContinental New York Barclay Hotel in New York. At the conference, there will be an opportunity for investors to meet one-on-one with managemen ...

MIGDAL HAEMEK, Israel – April 24, 2024 – Tower Semiconductor (NASDAQ/ TASE: TSEM), the leading foundry of high-value analog semiconductor solutions, will issue its first quarter 2024 earnings release on Thursday, May 9, 2024. The Company will hold a conference call to discuss its first quarter 2024 financial results and second quarter 2024 guidance on Thursday, May 9, 2024, at 10:00 a.m. Eastern Time (09:00 a.m. Central, 08:00 a.m. Mountain, 07:00 a.m. Pacific and 05:00 p.m. Israel time). This call will be ...

MIGDAL HAEMEK, Israel – April 24, 2024 – Tower Semiconductor (NASDAQ/ TASE: TSEM), the leading foundry of high-value analog semiconductor solutions, will issue its first quarter 2024 earnings release on Thursday, May 9, 2024. The Company will hold a conference call to discuss its first quarter 2024 financial results and second quarter 2024 guidance on Thursday, May 9, 2024, at 10:00 a.m. Eastern Time (09:00 a.m. Central, 08:00 a.m. Mountain, 07:00 a.m. Pacific and 05:00 p.m. Israel time). This call will be ...

Merger and Acquisition Activities - In August 2023, Intel and Tower mutually agreed to terminate the merger agreement, resulting in a reverse termination fee of $353 million paid to Tower[24]. - The company entered into a merger agreement with Intel for $53 per share, which was terminated in August 2023, resulting in a reverse termination fee of $353 million paid to the company[139]. - The company has a history of mergers and acquisitions, including the merger with Jazz Technologies in 2008, which expanded its operational capabilities[20]. - The company acquired a 51% equity stake in TowerJazz Panasonic Semiconductor Co., Ltd. in March 2014, which operates two factories in Toyama, Japan[21]. - The company has a history of strategic acquisitions, including Fab 9 in Texas and a 51% stake in TPSCo from Panasonic, to expand its operational capabilities[136][137]. Operational Changes and Challenges - The company announced a re-organization of its Israeli operations, ceasing Fab 1 operations within approximately one year to optimize operations[26]. - The company operates under a lease for its Fab 3 facility, which is subject to disputes that could adversely impact operations and financial results[55]. - The company has faced operational challenges that could impact delivery times and quality control, affecting revenue and customer retention[43]. - The company may experience excess inventory if wafers are processed without matching purchase orders, potentially leading to obsolete inventory and financial losses[77]. - Delays in purchasing equipment and raw materials could lead to operational halts, impacting capacity increase plans and overall business performance[79]. Financial Performance and Risks - The company had approximately $232 million of consolidated principal amount of debt outstanding as of December 31, 2023, including $102 million in JPY loans and $80 million in capital lease agreements[67]. - The company faces risks from fluctuations in cash flow, which may adversely affect its ability to fulfill debt obligations and invest in strategic growth opportunities[69]. - The company’s financial results may fluctuate significantly due to the cyclical nature of the semiconductor industry and other uncontrollable factors[51]. - The company does not expect to pay dividends in the foreseeable future, as it intends to retain earnings for growth and acquisition strategies[114]. - The company may need to secure additional financing for capacity acquisition and strategic growth, which could be challenging under current market conditions[59]. Market Dynamics and Demand - The semiconductor foundry services market is characterized by cyclical demand, which can significantly impact revenue and margins due to lower demand for wafers[39]. - Demand forecasting is difficult due to the variety of applications for foundry services, which may lead to excess capacity and financial strain if demand is lower than expected[40]. - Future revenues are expected to depend heavily on purchase orders received in the preceding quarter or two, leading to uncertainty in revenue forecasts[76]. - The company generates revenues from international customers, exposing it to risks such as currency fluctuations and geopolitical instability[65]. - The company is a pure-play independent specialty foundry, providing processed wafers with geometries ranging from 0.35 to 0.13-micron on 200-mm wafers and 65 nanometer on 300-mm wafers[130]. Competitive Landscape - The foundry business is highly competitive, with competitors potentially having advantages in capacity, customer base, and operational performance[47]. - The competitive landscape includes foundries like GlobalFoundries and TSMC, with competition based on technology offering, wafer performance, and customer support[198][201]. - The company may face pricing pressure and underutilization of capacity due to increased competition in the specialty foundry market[48]. - The company is not currently capable of providing CMOS processes at smaller than 10 nanometer process geometries, which may impact its competitiveness if customers shift towards these technologies[49]. Technological Advancements - The company has developed specialized technologies including CMOS image sensors, MEMS, and RFID technologies to enhance its service offerings[131]. - The company is advancing its CMOS image sensor technology with BSI and wafer stacking, which allows for improved performance in mobile devices and other applications[174]. - The company has developed innovative stitching technology for X-ray sensors, enabling the production of large sensors on 8" and 12" wafers, which enhances capabilities in medical and industrial applications[171]. - The company has developed GaN technologies for sensor applications and is integrating MEMS devices with CMOS technology[187]. - The company is developing advanced SiGe BiCMOS technologies, which provide higher speed and lower noise for RF and high-performance analog applications, with ongoing development of 65nm SiGe BiCMOS technology[181]. Customer Relationships and Sales Cycle - The company emphasizes customer service and engineering support, which has led to a high customer retention rate and an increase in new customers and products[161]. - The sales cycle for new customers typically ranges from 9 to 24 months, while existing customers can have a cycle as short as 6 to 12 months[190]. - In 2023, 14% of the company's revenues were generated from NTCJ, with an additional four customers contributing 30% of revenues, and the remaining 56% from smaller customers[53]. - In 2023, four significant customers contributed between 9% to 14% of revenues, compared to five customers contributing between 5% to 14% in 2022[190]. Geopolitical and Environmental Factors - The ongoing conflict in Israel has led to military drafts, which may disrupt operations if a significant number of employees are absent for military service[119]. - The current war in Israel has not materially impacted operations to date, but future escalation could adversely affect business and financial conditions[120]. - Economic boycotts and restrictive laws against Israel may hinder business operations and expansion efforts, impacting financial results[122]. - Climate change concerns may result in increased operational costs due to higher energy prices and potential carbon taxes, adversely affecting financial results[100]. Inventory and Supply Chain Management - The company maintains a general inventory policy to ensure sufficient stock of principal raw materials, including silicon wafers, to meet operational needs[211]. - The company has established long-term relationships with wafer suppliers to ensure a sufficient supply of silicon wafers[212]. - Compliance with export regulations may reduce sales or increase operational costs, potentially disrupting business operations[96]. Security and Compliance Risks - Security breaches, including cyber-attacks, could lead to significant operational disruptions and reputational damage, affecting business performance[103]. - Compliance with U.S. conflict minerals regulations may increase sourcing costs and impact the availability of raw materials, potentially harming revenue[101]. - Defective wafers could lead to product liability claims, damaging the company's reputation and financial condition[97].

MIGDAL HAEMEK, Israel, March 21, 2024 – Tower Semiconductor (NASDAQ/TASE: TSEM), the leading foundry of high-value analog semiconductor solutions, today announced its participation at upcoming 2024 OFC conference to be held March 26th - 28th in the San Diego Convention Center, California. The company will showcase its advanced Silicon Germanium and Silicon Photonics platforms, as well as recent technology developments providing cutting-edge solutions supporting the growing demands of AI, quantum computing, ...