A. [RESERVED.] B. CAPITALIZATION AND INDEBTEDNESS Not applicable. C. REASONS FOR THE OFFER AND USE OF PROCEEDS Not applicable. D. RISK FACTORS Our business faces many risks. Any of the risks discussed below may have an adverse impact on our business, financial condition and operating results. RISKS AFFECTING OUR BUSINESS Reliance on acquisitions, establishing new fabs and/or gaining additional capacity for growth involves risks and uncertainties that may adversely affect our future revenues, business and operating results and may require raising funds in such amounts that we cannot assure you we will be able to obtain, or may be on unfavorable terms as far as dilution and/or other financing cost or covenants, which could adversely affect our financial position business and operations. We may decide to try to attract new customers and expand our business with existing customers and/or enter into new markets by expanding our capacity footprint and business, as we have done during the past two years, with regards to our capacity expansion plans, or through acquisitions of, or joint ventures with, existing facilities or establishing new facilities, or through acquiring access to additional capacity or capacity enhancement in advanced technologies, which may be obtained independently, through capital lease transactions or through third-party collaborations. Our success at such expansion is dependent, in part, on finding suitable partners and targets for acquisitions of existing or new fabs and/or capacity through capacity arrangements with companies that already own fabs, successfully negotiating with the seller and/or partner a reasonable price for the acquisition or engagement, securing financing and completing the expansion plans, obtaining approvals for grants and subsidies, integrating the acquired facilities into our business efficiently and effectively achieving desired synergies and anticipated benefits, and loading the facilities with customer engagements sufficient to cover their operating and other costs. The activities related to expanding our manufacturing sites involve potential liabilities and numerous complex steps, including qualification and duration thereof, developing advanced technologies, procuring equipment necessary for production, process qualification, and facility operational ramp-up. We cannot assure you that we will be successful in executing this business strategy or that we will succeed in increasing our market presence and attracting new customers and business and/or expanding our business with our current customers, in order to operate any such additional capacity profitably. 1 This strategy involves many risks, each of which may negatively affect our profitability and financial position, including, but not limited to, the following: • Other foundries may bid against us to acquire potential targets. This competition may result in decreased availability of, or increased prices for, suitable acquisition candidates; • We may not be able to obtain the necessary regulatory or other approvals, and as a result, or for other reasons, we may fail to consummate certain acquisitions; • Potential acquisitions and execution of an expansion plan may require the dedication of substantial management effort, time and resources which may divert management from our existing business operations or other strategic opportunities; • We may not be able to retain experienced management and skilled employees from the businesses we acquire and, if we cannot retain such personnel, we may not be able to attract new skilled employees and experienced management to replace them; • We may purchase a company with excessive unknown contingent liabilities and/or a cost structure that is not as beneficial as anticipated from the preliminary evaluation or that includes high cost that may result in losses incurred by us if we do not succeed in maintaining high utilization levels to cover the cost; • We may not be able to obtain sufficient financing in a timely manner or financing on favorable terms, which could limit our ability to engage in certain acquisitions and strategic engagements; • The amount or terms of financing actually required before and after acquisitions considering our current liquidity and cash position may vary from our expectations, resulting in a need for more funding that may not be available to us in order to finance the acquisitions and/or the operations of the target acquired and/or the acquisition of additional equipment that may be required to increase and/or adjust the target’s operations to address our customer demand and specific technology flows; • Delays or other issues may impact our ability to timely and successfully ramp up the capacity in such fabrication facilities, including delays in the supply of equipment and/or parts by vendors, delays in equipment installation and/or the qualification schedule, and/or delays in technology process qualification and/or new products’ qualifications; and • Partners with whom we enter into agreements to provide additional capacity may not perform in accordance with their obligations. During the last two years, we have initiated plans to invest an aggregate of $920 million in capital expenditures (primarily machinery and facilities), mainly to expand our silicon photonics (SiPho) and silicon germanium (SiGe) capacity and capabilities, as well as to enhance our power, next-generation and other capacity. There is no assurance that we will be able to complete the installation and qualification of all such machinery in a timely manner to satisfy our customers’ demand, due to reasons such as the conflicts between the United States and Iran, Israel and Iran and Israel and Hezbollah that commenced in February 2026 which has prevented vendors from arriving in Israel and to our fab to install the tools, and there is no assurance that, by the time all such machinery is installed and qualified, customer demand will require the full or high utilization of such machinery tools. In March 2026, we signed an agreement for the strategic restructuring of our Japan operations, which are currently organized under TPSCo (a Japanese company held 51% by Tower and 49% by Nuvoton Technology Corporation Japan (NTCJ), a wholly owned subsidiary of Nuvoton Technology Corporation, under which Tower will take full ownership of Fab 7, which will be organized under a wholly owned Japanese subsidiary of Tower, while NTCJ will take full ownership of Fab 5. As part of this restructuring, the companies will enter into mutual long-term supply agreements to ensure continued support for existing customers of both companies. Accordingly, Tower customers currently served through Fab 5 and Nuvoton customers currently served through Fab 7 are not expected to experience disruption to supply or operations. The transaction is targeted to close on April 1, 2027, subject to the satisfaction of customary closing conditions and receipt of applicable regulatory approvals. There is no assurance that the transaction will close on that timeline, if at all, or that our customers will not experience disruption, which could impact their relationship with us. 2 In addition, contingent upon subsidy approval from Japan’s Ministry of Economy, Trade and Industry (METI) following the formal application, and subject to other considerations such as funding, permits and the engagement of contractors and equipment vendors, Tower’s Japanese subsidiary may purchase the adjacent land on pre-agreed terms between Tower and NTCJ, which would be used for a potential new fab shell build-out in order to significantly expand its 300mm capacity and capabilities, through the purchase of machinery and cleanroom facilities, and related investments, with the necessary capital to be funded in part by us, METI and other cash sources, which may consist of equity investments and/or debt vehicles, or a combination thereof. There is no assurance that METI will grant the subsidy approval, that any subsidies will be in the amount and/or percentage of capital-expenditures as currently expected and needed by the Company to fund part of the cost, that the Company will execute the planned build-out to its fullest extent (if at all), the period it will take to complete this build-out and funding plan, that customer demand will ramp up to levels sufficient to substantially utilize the new capacity following the build-out phase, that future selling prices per wafer and/or costs per wafer will be at the levels currently expected, or that the Company will have sufficient funds to execute such plan, including its related fundraising activities. An inability to make acquisitions, establish new fabs and/or gain additional capacity for growth, such as the potential new 300mm fab shell that may be build-out in Japan described above, as well as the $920 million capital expenditure plans (primarily machinery and facilities) to (among other things) expand our SiPho and SiGe capacity and capabilities, may require raising funds in amounts that we cannot assure you we will be able to obtain, or which funding may be on unfavorable terms as far as dilution and/or other financing costs or covenants, which may have an adverse impact on our business, financial position and operations. Over-demand for our foundry services and/or products may result in operational bottlenecks and a loss of customers and revenues, which may adversely affect our profitability and business. From time to time, in periods during which demand for our foundry services exceeds our capacity and capabilities and we experience high utilization rates in certain of our facilities, we may (i) be unable to fulfill customer demand in whole or in part, in a timely manner or at all, despite commitments to satisfy such demand under supply agreements and customer prepayment arrangements; (ii) be unable to assure next generation customers’ products; or (iii) experience operational bottlenecks, which may cause low or slow performance and/or halt operations or prevent us from being able to manufacture to committed customer contracts and customer prepayment arrangements, and may adversely affect our cycle time, yield and delivery schedule. As a result, we could lose certain of our current and/or potential customers, and/or we may be required to pay penalties and/or repay advances received from customers and/or manage customers’ potential claims, which may adversely affect our reputation, revenues, profitability, business and operations. We may experience difficulty achieving acceptable operational metrics and indices in the future as a result of operational, technological or process-related problems. The semiconductor wafer process technology is highly complex, requires advanced and costly direct and indirect materials as well as equipment, and is constantly being modified in an effort to improve operational metrics and indices such as device yields, wafer performance and delivery times. Microscopic impurities such as dust and other contaminants, difficulties in the operational processes, defects in the key materials and tools used to process wafers and other factors can cause wafers to be rejected as non-functional or partially non-functional. Although we continuously enhance our process capabilities and efficiency, from time to time we have experienced operational, technological and process-related problems that have caused extended production time or quality control issues. Operational issues we may face include difficulties in upgrading or expanding existing facilities and in establishing new fabs; unexpected breakdowns in our equipment and/or related facility systems; unexpected events, such as an electricity outage; difficulties in changing or upgrading our process technologies; raw material shortages or impurities; delays in delivery or shortages of spare parts; and difficulties in maintenance and upgrade of our equipment. Should such problems occur to a material degree, we may suffer loss of income, loss of reputation and/or a loss of customers, any of which may adversely impact our business, revenues, financial results and financial condition. 3 If we do not maintain and develop our technology processes and services, we may lose customers and may be unable to attract new ones. The semiconductor market is characterized by rapid change, including rapid technological developments, evolving industry standards, changes in customer and end-user requirements, frequent new product introductions and enhancements, and short product life cycles with declining prices as products mature. Our ability to maintain our current customer base and attract new customers is dependent in part on our ability to continuously develop advanced specialized process technologies that can be processed in our fabs and purchase the appropriate equipment, and to keep pace with new technology, including artificial intelligence, evolving standards, changing customer and end-user requirements, new product introductions and shorter product life cycles. If we are unable to successfully develop such process technologies and provide our services in a timely manner or at all, or if we are unable to purchase the appropriate equipment required for such processes and services, we may be unable to maintain our current customer base and may be unable to attract new customers. The foundry business is highly competitive, and our competitors may have competitive advantages over us. Many of our competitors may have one or more of the following competitive advantages over us: greater capacity and/or availability of same; a more diverse and established customer base; greater financial, sales, marketing, distribution and other resources; governmental funding or support (such as receipt of financial incentives under the Chips and Science Act of 2022); better cost structure; and/or better operational performance, including cycle time and yields. If we do not compete successfully, our business and financial results may be adversely affected. We compete most directly in specialty segments with certain independent dedicated foundries. We also compete with pure play advanced technology node driven foundry service providers, as they each have some capacity for specialty process technologies, and with integrated device manufacturers (“IDMs”) that allocate a portion of their capacity to foundry operations. As our competitors continue to expand their capacity, there could be an increase in specialty foundry capacity. To the extent specialty capacity increases, there may be more competition and pricing pressure on our services, which may result in underutilization of our capacity, decreased profit margins, reduced earnings or increased losses. In addition, some semiconductor companies have advanced their complementary metal oxide semiconductor (“CMOS”) designs to smaller than 10 nanometer process geometries. These smaller process geometries may provide customers with performance and integration features that may be comparable to, or exceed, features offered by our specialty process technologies. The smaller process geometries may also be more cost-effective at higher wafer volumes for certain applications. We are not currently capable, and do not currently plan to become capable, of providing CMOS processes at these smaller process geometries. If our potential or existing customers choose to design their products in a manner whereby the percentage of digital content in specialty designs increases significantly and requires these advanced CMOS processes, our business may be negatively impacted. 4 Risks relating to the Fab 3 lease could harm our business, operations and financial results. NPB Co. operates our Fab 3 facility and its offices under an operating lease agreement that expires in 2030. The landlord has made claims that NPB Co.’s noise abatement efforts are not adequate under the terms of the amended lease and has sought a judicial declaration that NPB Co. committed a material non-curable breach of the lease. The landlord is party to an option agreement pertaining to the Newport Beach site with a third-party, under which such third party believes it has certain collateral or other rights with respect to the site, and has stated that it is considering filing claims against the landlord and/or the Company. The landlord and the Company dispute the third-party’s claims. To mitigate possible revenue reduction from Fab 3 customers toward the end of the lease period, we initiated cross-qualification of process technologies at our other fabs. The process equipment tools needed to increase capacity and capabilities at certain of our other fabs are costly and require significant investment and qualification time for the new processes and customer specific product qualifications. Failure to complete these activities in a timely manner may materially and adversely affect our long-term overall business, revenues and profitability, at least until all such process equipment tools and technologies are installed and fully qualified for volume production at our other fabs. Our financial results may fluctuate from quarter to quarter, making it difficult to forecast our future performance. Our revenues, expenses and operating results may fluctuate significantly from quarter to quarter due to a number of factors which may be beyond our control. These factors include, among others: the cyclical nature of the semiconductor industry and the volatility of the markets served by our customers; changes in the economic conditions of geographical regions where our customers and their markets are located (including global recession, credit crises, export control limitations, banned areas and countries and/or tariffs); increasing energy costs, inventory and supply chain management of our customers; the loss of a key customer, not attracting new designs from key customers, postponement of an order from a key customer or the rescheduling or cancellation of large orders; the occurrence of accounts receivable write-offs, failure of a key customer to pay accounts receivable in a timely manner, the financial condition of certain of our customers and regulatory or other tariffs or charges that may be imposed in a region in which customers reside; the occurrence of an unexpected event, such as environmental events, an epidemic or pandemic, industrial accidents such as fire or explosions, or electricity outage, that may affect the manufacturing process or shipment of quality products without charging our customers significant additional costs; the timing and volume of orders from customers; regulations applicable to us preventing business engagement with sanctioned entities and embargoes that may restrict our customers and vendors from engaging with us; increased tariffs; our ability to obtain raw materials and equipment on a timely and cost-effective basis; price erosion in the industry and our ability to negotiate prices with our current and new customers; our susceptibility to intellectual property rights’ disputes; our dependency on export licenses and other permits required for our operations and the sale of our services; our ability to maintain existing partners and customers; interest, price index and currency rate fluctuations that were not hedged; and changes in accounting rules affecting our results. These factors and risks make it difficult to predict our future performance and may ultimately negatively affect our operating results and financial position. 5 If we do not maintain our current key customers, and/or do not attract new key customers, our business and profitability may be adversely affected. Loss or cancellation of business from, or decreases in the sales volume or sales prices to, our significant customers, or our failure to replace lost business with new customers, may seriously harm our financial results, revenues and business. We have relationships with several customers that represent a material portion of our revenues. In 2025, 11% of our revenues were generated from NTCJ, 39% of our revenues were derived from an additional seven customers, each of which generated between 4% to 7% of our revenues, and the remaining 50% of our revenues were derived from many other smaller customers. In 2024, 13% of our revenues were generated from NTCJ, 27% of our revenues were derived from an additional four customers, each of which generated between 3% to 11% of our revenues, and the remaining 60% of our revenues were derived from many other smaller customers. While we renegotiate the terms of our commercial agreements from time to time with our customers, there is no assurance as to the financial impact of any revised terms between us and our customers or the volume of orders they may continue to place based on any revised terms. The loss or reduction in volume or sales price to any of our key customers, whether due to business negotiation, termination or expiration of their signed contract(s), the lack of demand in their markets, their insolvency or their unwillingness or inability to perform their obligations under their respective engagements with us, or our inability to (i) renew our engagements with them on commercially reasonable terms, (ii) fulfill their demand and supply them with wafers with successful performance metrics, or, alternatively, (iii) attract new customers or develop new products and business to replace such lost business, may materially negatively impact our overall business, revenues and profitability. Our financial results may be adversely affected if we are unable to operate our facilities at satisfactory utilization rates necessary to generate and maintain positive and sustainable gross, operating and net profits. As is common in our industry, a large portion of our total cost is comprised of fixed costs. Therefore, while during periods in which we operate at high utilization rates we are able to cover our costs, at times when the utilization rate is low, the reduced revenues may not cover all of the costs since a large portion are fixed costs which remain constant, irrespective of our capacity utilization. In addition, our depreciation costs and capital expenditure investments, as common in our industry, are relatively high. Our financial results, including our gross, operating and net profits, may be adversely impacted if customer demand for our products is not sufficient to enable us to operate our facilities consistently at satisfactory utilization rates necessary to generate and maintain revenue levels that would cover all of our costs. This issue may be further exacerbated with the ramp-up of new capacity, where we incur fixed costs upon the start of operations while gradually ramping up utilization, causing a decrease in our profit margins. If we are unable to purchase equipment and/or raw materials and other supplies, or there are delays in the delivery thereof, we may face delays or a temporary halt in operations or other problems. If we must purchase raw materials beyond our needs as required under committed vendor contracts, we may need to amortize or write such purchases off, which may adversely impact our financial results. In periods of high market demand, the lead times from order to delivery of equipment could be as long as 12 to 18 months. We also procure used equipment, which can take a long time to qualify, potentially causing delays in our operations. There may be delays in the delivery of equipment and/or raw materials and other supplies to us. Delays in the delivery, installation and qualification of equipment may also result from the recent conflicts between the United States and Iran, Israel and Iran, and Israel and Hezbollah that commenced in February 2026, which has prevented vendors from arriving in Israel to install the equipment, which may impact the timely execution of the $920 million SiPho and SiGE capital expenditure plan described above. Such delays may adversely impact our capacity increase plans and/or utilization and qualification and may cause delays or a halt in operations. In addition, our processes use many raw materials, including silicon wafers, chemicals, gases, and various metals, as well as other supplies, and require large amounts of fresh water and electricity. Shortages of equipment, raw materials, and other supplies could occur for various reasons, including an interruption of supply due to an epidemic, pandemic, geopolitical, war or security situation, increased industry demand, or a dispute with a supplier. Any such shortage or delay in delivery could result in operational delays that may lead to the loss of existing and/or potential new customers and/or a halt of operations, which may have a material adverse effect on our business and financial results. 6 In addition, although most of the raw materials used in our processes are available from multiple suppliers, certain materials are purchased through sole-sourced vendors under pre-committed volume contracts for specified pre-defined quantities that must be purchased on a monthly, quarterly or annual basis. If such predefined quantities are not required for our operations at any given time, this may result in excess payment and/or expenses write-off in the financial statements which may adversely impact our financial results. Reductions in demand for our foundry services, which are dependent on the demand in our customers’ end markets that are typically cyclical and volatile, may adversely affect our future revenues, business and financial results and position. Our customers use our wafers in a wide variety of applications, in markets which are typically cyclical, e.g., artificial intelligence, communications market, consumer devices and applications, personal computers, handsets, smartphones and other types of devices. Any significant decrease in the demand for these applications, devices or products may significantly decrease our revenue and margins due to lower demand for our wafers and/or lower selling prices per wafer. As demonstrated in the past by downturns in demand in high technology markets, market conditions can change rapidly, without warning or advance notice. In such instances, our customers may experience inventory buildup and/or difficulties in selling their products and, in turn, may reduce or cancel orders for wafers from us and/or ask for a reduced selling price, which may harm our revenue, business and profitability. The timing, severity and recovery of these downturns cannot be predicted. During the last two years, we have initiated plans to invest an aggregate of $920 million in capital expenditures (mainly machinery and facilities), to expand our SiPho, SiGe, power, next generation and other capacity, primarily in the SiPho and SiGe processes used across a wide range of our customers’ products, including devices for artificial intelligence (AI) applications. However, as with many emerging applications, the selling price per wafer and demand for semiconductors used in AI may be volatile and difficult to forecast. In a downturn in high-technology markets, the selling price per wafer and demand for our SiPho and SiGe processes may decline, and we may experience oversupply and price pressure. If the selling price per wafer and demand for AI-related products decline, or if demand shifts to process technologies we do not manufacture, our revenues and margins could be adversely affected and may not be sufficient to cover our costs, and we may incur impairment or underutilization charges, which may adversely affect our financial results and financial position. Our continued operations and our operational performance metrics and business could be significantly harmed, including stopping operations of our fabs for certain periods of time, by natural disasters, particularly earthquakes, floods and fires, or due to power outages, water leaks, chemical leaks, supply chain or other issues, which may cause our profitability and financial position to be adversely affected. Our fabs in Israel, Southern California and Japan are located in areas which are generally susceptible to seismic activity. Due to the complex and delicate nature of our technological processes, our facilities are particularly sensitive to the effects of vibrations associated with even minor earthquakes. We cannot be certain that precautions that any of our fabs have taken to seismically upgrade the fabs will be adequate to protect our facilities in the event of an earthquake. Earthquakes may lead to fire in the fabs or other material damage. Also, we use highly flammable materials such as silane and hydrogen in our technological processes and are therefore subject to risk arising from fire, which cannot be completely eliminated. We are also subject to risk of floods, mostly in our Japan facilities. 7 Any damage resulting from earthquakes, floods, fires and other natural disasters could seriously disrupt our continued operations, cause a loss of wafers, deterioration of our fab yield and substantial downtime to reset equipment before resuming operations, which could cause a material adverse effect on our business, revenue and profits. In addition, a power outage, even of very limited duration, and/or water leaks, chemical leaks, shortages of parts or other materials which are required for our supply chain, or other issues, may result in a loss of wafers, deterioration of our fab yield, cycle time and substantial downtime to reset equipment before resuming operations, thereby potentially causing an immediate loss of revenue and profitability in a particular period, which may cause our profitability and financial position to be adversely affected. Affected customers may elect to transfer their purchase orders to other foundries. While we try to mitigate any potential damage caused by such events and maintain insurance policies for coverage of any potential losses, including business interruption insurance, which may compensate us partially or fully against certain types of damages, we cannot ensure that our insurance coverage will compensate us fully for all of the losses we may incur and that such events will not have a negative effect on the Company’s business and financial situation. Possible wafer returns could harm our business. Wafers we deliver to our customers may be returned within specified periods if they are defective or otherwise fail to meet prior agreed upon specifications. Future customer returns may have an adverse effect on our business and financial results. We are subject to risks related to our international operations. We generate revenues from customers located in the United States, Europe and Asia-Pacific. Because of our international operations, we are vulnerable to the following risks: • JPY and NIS fluctuations against the USD – see the risk factor below entitled: “Our exposure to currency exchange and interest rate fluctuations may impact our costs and financial results”; • the burden and cost of compliance with foreign government regulation, as well as compliance with a variety of foreign laws, and the imposition of regulatory requirements, restrictions on data transfer, tariffs, import and export restrictions and other trade barriers and restrictions, including the timing and availability of export licenses and permits and the ability to sell products to or buy materials from sanctioned entities; • general geopolitical risks, such as political and economic instability, international terrorism, potential hostilities and changes in diplomatic and trade relationships – see the risk factor below entitled: “Political, economic and military instability in Israel and the Middle East region may harm our business”; • adverse foreign and international tax rules and regulations, such as withholding taxes deducted from amounts due to us and not refunded to us by the tax authorities and Pillar Two model rules issued by the OECD, introducing a 15% global minimum tax applicable on a jurisdiction-by-jurisdiction basis to multinational corporations, which will result in significant additional income tax expenses for years 2026 and beyond; 8 • weak protection of our intellectual property rights in certain foreign countries; • delays in wafer shipments due to local customs restrictions; • laws and business practices favoring local companies; • difficulties in collecting accounts receivable; and • difficulties and costs of staffing and managing foreign operations. The geographical distance between Israel, the United States, Japan, and the rest of Asia and Europe also creates certain logistical and communication challenges. In addition, there has recently been a significant increase, and subsequent uncertainty, in the number of tariffs and other trade restrictions globally. Uncertainty surrounding the duration, severity, scope, and timing of these trade actions may disrupt international trade and may increase the inability or unwillingness of customers to purchase our products. The escalation or broadening of these trade actions could also significantly increase our costs or impede our ability to sell our products, which could materially and adversely affect our business. We cannot assure you that we will be able to sufficiently mitigate all risks related to our international operations. Our financial position and operations may be adversely affected by our long-term debt. As of December 31, 2025, we had approximately $161 million in consolidated principal amount of outstanding debt, comprised as follows: (1) a TPSCo loan in a principal amount of approximately $92 million, which carries a fixed interest rate of 2% per annum, with principal scheduled to be repaid between 2027 and 2030; (2) Tower’s subsidiaries’ capital lease agreements for machinery and equipment with JA Mitsui Leasing, with aggregate outstanding lease liabilities of approximately $29 million, carrying a fixed interest rate of approximately 2% per annum, payable between 2026 and 2029; and (3) Tower and its subsidiaries’ other capital and operating leases, with aggregate outstanding lease liabilities of approximately $40 million, payable between 2026 and 2032. Debt may have negative consequences on our business, including: • limiting our ability to fulfill our debt obligations and other liabilities; • requiring the use of a portion of our cash to service our indebtedness rather than investing our cash to fund our strategic growth opportunities and plans, working capital and capital expenditures; • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; • placing us at a competitive disadvantage with respect to less leveraged competitors and competitors that have better access to capital resources; • volatility in our non-cash financing expenses due to increases in the fair value of our debt obligations; • fluctuations of the payable amounts in USD of the JPY-denominated loans and capital lease agreements or other expenses denominated in JPY; and • potential enforcement by the lenders of their liens against our respective assets, as applicable, if an event of default occurs. 9 In order to service our debt, the applicable interest it carries and other liabilities and obligations and/or to improve its terms and conditions and/or to invest in strategic opportunities for growth and/or business development activities (including the $920 million SiPho and SiGe capital expenditure plan and the abovementioned 300mm potential new fab shell build-out and capacity expansion in Uozu, Japan), we may decide to obtain funds to finance such activities, in part or in whole, from sources including debt vehicles and/or refinancing, the sale of new securities, the sale of intellectual property and/or intellectual property licensing, as well as additional financing alternatives. However, there is no assurance that we will be able to obtain sufficient funding, if at all, from the financing sources detailed above or other sources in a timely manner (or on commercially reasonable terms) to allow us to fund our growth plans and/or cover, in a timely manner, all our costs, capital expenditure investments, and all of our scheduled debt detailed above, liabilities, and obligations, which may adversely affect our financial position and operations. If we are unable to manage fluctuations in cash flow, our business and financial position may be adversely affected. Our working capital requirements and cash flows are subject to quarterly and yearly fluctuations, depending on a number of factors. If we are unable to manage fluctuations in cash flow, our business, operating results and financial condition may be materially adversely affected. Factors which may lead us to suffer cash flow fluctuations include: • fluctuations in the level of revenues from our operating activities; • fluctuations in the collection of receivables; • timing and size of payables; • the timing and size of capital expenditure; • the net impact of JPY/ USD fluctuations on our JPY income and JPY cost; • the repayment schedules of our debt obligations; • our ability to fulfill our obligations and meet performance milestones under our agreements; • fluctuations in the USD to NIS and USD to JPY exchange rates; and • the inflation rates in Israel, Japan, Italy and the United States. Changes in our effective tax rate may impact our net income and increase our tax payments. A number of factors can impact our future effective tax rate or tax payments, which could cause fluctuation in our net margins and our financial results, including: • Adoption and implementation of a global minimum corporate tax rate under Pillar Two of the Organization for Economic Cooperation and Development (“OECD”) Base Erosion and Profit Shifting (“BEPS”) framework by any of the jurisdictions in which the Company operates, without suspension or changes, will esult in significant additional income tax expense for the years 2026 and beyond, mainly with respect to our Israeli operations. changes, reduction, cancellation or discontinuation of the tax benefits provided to a “Preferred Enterprise” and its applicability to Tower’s income under the Israeli Law for the Encouragement of Capital Investments, 5719-1959 (the “Investment Law”) (see “Item 10. Additional Information—E. Taxation—Israeli Taxation—Law for the Encouragement of Capital Investments, 5719-1959”); • changes in the volume and mix of profits earned across jurisdictions with varying tax rates; • changes in our business or legal entity operating model; 10 • the resolution of issues, including transfer pricing implementation, arising from tax audits; • changes in the valuation of our deferred tax assets and liabilities, and in deferred tax valuation allowances; • increases in expenses not deductible for tax purposes or deductible over a longer period of time than expected, or changes in available tax credits, including research and development credits; and • changes in income tax codes or foreign tax laws or their interpretation. Our business could suffer if we are unable to retain and recruit qualified personnel. We depend on the continued services of our senior executive officers, senior managers and skilled technical and other personnel, and there is intense competition for the services of these personnel in the semiconductor industry. Our business could suffer if we lose the services of some of these senior executives and key personnel due to resignation, medical absence, illness or other reasons, and cannot find, hire and integrate adequate replacement senior executives and key personnel in a timely manner. We do not typically operate with any significant backlog, which makes it difficult for us to forecast our revenues and margins in future periods. Our customers generally do not place purchase orders far in advance, partly due to the cyclical nature of the semiconductor industry. Since our expense levels are based in part on our expectations of future revenues, we may be unable to adjust costs in a timely manner to compensate for revenue shortfalls caused by cancellations, rescheduling of orders or lower actual orders than quantities forecasted. Rescheduling may relate to quantities or delivery dates, and, sometimes, to the specifications of the products we are shipping. Consequently, we cannot be certain that orders on backlog will be shipped when expected or at all. We expect that, in the future, our revenues in any quarter will continue to be substantially dependent upon purchase orders received in the immediately preceding quarter or two. We cannot assure you that any of our customers will continue to place orders with us in the future at the same levels as in prior periods. For these reasons, our backlog at any given date may not be a reliable indicator of our future revenues and, as a result, revenue and margins’ forecasts, targets and guidance that we provide from time to time, may fall short of expectations. We may be left with excess inventory because we may start processing wafers in the absence of a matching purchase order. While our business model is to start processing wafers in an amount matching each customer’s specific purchase order, on occasion, we may start processing wafers in excess of a customer’s orders based on forecasted customer demand, because we may forecast future excess demand or because of future capacity constraints. If such wafers will eventually not be covered by matching customer purchase orders, we may be left with excess inventory that may ultimately become obsolete and must be scrapped or sold at a significant discount. Significant amounts of obsolete inventory may have a negative impact on our financial results. 11 Our sales cycles are typically long, and orders ultimately received may not meet our expectations, which may adversely affect our operating results. Our sales cycles, which we measure from first contact with a customer to first shipment of wafers ordered, vary substantially, and may last longer than two years, particularly for new technologies. In addition, even after we make initial shipments of prototypes, it may take several more months to reach the targeted maximum quantities. As a result of these long sales cycles, we may be required to invest substantial time and incur significant expenses and investments before receiving any purchase orders and related revenue. If orders ultimately received are significantly lower than our expectations, we will have excess capacity that we may not be able to fill within a short period of time, resulting in lower utilization of our facilities. In addition to the revenue loss, we may be unable to adjust our costs in a timely manner to align with the lower revenue, since a large portion of our cost is fixed cost, which remains constant irrespective of the number of wafers, which may adversely affect our operating results and financial condition. If we are unable to successfully identify and negotiate with third-party buyers for the sale of any excess and/or unused equipment, inventory and/or other assets, including as a result of cessation of operations in any of our fabs, our financial results may be harmed. From time to time, we may decide to cease operations at a certain facility or discontinue developing certain technology flows due to factors such as changes in company strategy, low margins, low utilization or low customer demand. This may result in unused equipment, inventory and/or other assets that are no longer required to support our customers’ needs, which may be sold to third-party buyers. We also have obsolete equipment or inventory from time to time that we sell in order to streamline our production processes and enhance our overall efficiency. If we are unable to successfully identify and negotiate with potential buyers and sell excess equipment in a timely manner for satisfactory consideration, we may incur losses and additional liabilities and contingencies, which may have a negative effect on our financial results. Our exposure to currency exchange and interest rate fluctuations may impact our costs and financial results. We currently operate our fabs 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 and NIS. Our revenues are denominated mainly in USD and JPY. Our cash from operations, investing and financing activities are denominated mainly in USD, JPY and NIS. We are, therefore, exposed to the risk of currency exchange rate fluctuations in Japan, Israel and Italy, which may have a material effect on our costs and financial results due to the periodic evaluation or revaluation of assets, liabilities, costs and income in these currencies. The majority of TPSCo’s revenues are denominated in JPY, and the majority of its expenses are denominated in JPY, which reduces the net exposure to fluctuations of the USD/JPY exchange rate on TPSCo’s gross, operating and net profits, as the impact on revenues is offset to a large extent by the impact on expenses. In order to mitigate a portion of the net exposure to the USD/JPY exchange rate on profit margins, we have entered into hedging transactions that partially hedge our exposure to currency fluctuations, to contain such fluctuations within a predefined fixed range. The cost of our operations in Israel, when measured in USD, is influenced by changes in the USD-to-NIS exchange rate, particularly with respect to expenses and costs denominated in NIS. Appreciation of the NIS may increase the costs of the Israeli facility in USD, such as increases in the cost of utilities, taxes, and labor costs that are denominated in NIS, which may lead to the erosion of profit margins. We use foreign currency cylinder and forward transactions to hedge a portion of this currency exposure and maintain such exposure within a predefined fixed range. 12 We depend on intellectual property to succeed in our business, including intellectual property owned by us as well as intellectual property of third parties and we may be party to infringement claims by others. We depend on intellectual property in order to provide certain foundry services and design support to our customers. We cannot assure you that patents will be issued for pending or future applications or that, if patents are issued, they will not be challenged, invalidated or circumvented or that the rights granted under the patents will provide us with meaningful protection or any commercial advantage. In addition, we cannot assure you that other countries in which we market our services and products will respect our intellectual property rights to the same extent as the United States. We cannot assure you that we will, at all times, be able to enforce our patents or other intellectual property rights, and it may be difficult for us to protect our intellectual property from misuse or infringement by other companies. Further, we cannot assure you that courts will uphold our intellectual property rights or enforce the contractual arrangements that we have entered into to protect our proprietary technology, which may reduce our opportunities to generate revenues. In the event that we are unable to enforce our intellectual property rights, our business may be harmed. In March 2026, GlobalFoundries filed three lawsuits against the Company in the U.S. International Trade Commission and the U.S. District Court for the Western District of Texas, alleging infringement of certain of its patents. The Company disputes these claims. We may in the future be party to other infringement claims. In the event any third-party asserts infringement claims against us or our customers, we may have to consider alternatives including, but not limited to: • attempting to negotiate cross-license agreements, which we might not succeed in negotiating or consummating; • acquiring licenses to the allegedly infringed patents, which may not be available on commercially reasonable terms, if at all; • discontinuing use of certain process technologies, architectures, or designs, which could cause us to halt a portion of our operations if we are unable to design around the allegedly infringed patents; • litigating the matter in court, which may result in substantial legal fees and paying substantial monetary damages in the event we lose; or • developing non-infringing technologies, which may be costly or may not be feasible. If we determine it is necessary to adopt one or several of these alternatives, it may place substantial financial and other burdens on us and hinder our business. If we fail to obtain certain licenses, or if we are involved in litigation relating to alleged patent infringement or other intellectual property matters, it may halt our operations with regards to particular product technologies, which may adversely impact our business and revenues. From time to time, we are a party to litigation that may require management time and effort. From time to time, we are a party to litigation incidental to the conduct of our ongoing business, including class actions, disputes with customers, suppliers, employees, landlords, or other third parties. Litigation requires a certain amount of management time and effort which may adversely affect our business by diverting management focus from business needs. In addition, our ability to compete successfully depends in part on our ability to operate without infringing on the proprietary rights of others and defending our intellectual property rights. Because of the complexity of the technologies used and the multitude of overlapping patents, copyrights and other intellectual property rights, it is often difficult for semiconductor companies to determine infringement. As a result, the semiconductor industry is characterized by frequent litigation regarding patent, trade secret and other intellectual property rights. We have been subject to intellectual property claims from time to time, some of which have been resolved through license agreements, the terms of which have not had a material effect on our business. The Company is currently party to three infringement claims brought by GlobalFoundries in the U.S. International Trade Commission and the U.S. District Court for the Western District of Texas alleging infringement of certain of its patents. The Company disputes these claims. Failure to prevail in such claims may negatively impact our business. 13 We could be harmed by failure to comply with environmental regulations. Our business is subject to a variety of laws and governmental regulations in Israel, the United States, Japan and Italy relating to the use, storage, discharge and disposal of toxic or otherwise hazardous materials used in our factories. If we fail to use, store, discharge or dispose of hazardous materials appropriately in accordance with applicable environmental laws or regulations, or if such laws change in the future, we may be subject to substantial liability or may be required to suspend or significantly modify our operations, which may adversely impact our business and revenues. Our business strategy is premised on the increasing use of outsourced foundry services on specialty process technologies, which may change in the future. We operate as an independent semiconductor foundry focused primarily on specialty process technologies. Our business model assumes that demand for these processes within the semiconductor industry, both by fabless semiconductor companies and IDMs, will grow and follow the broader trend towards outsourcing foundry operations. If our assumption does not prove applicable, our business and financial results may be adversely impacted. If we are unable to collaborate successfully with design automation vendors and third-party design service companies to meet our customers’ design needs, our business may be harmed. We have established relationships with design automation vendors and third-party design service companies to develop complete design kits that our customers can use to meet their design needs using our process technologies. Our ability to meet our customers’ design needs successfully, including their schedule and budget requirements, depends in part on the availability and quality of the relevant services, tools and intellectual property provided by these vendors and providers. Difficulties or delays in these areas may adversely affect our ability to meet our customers’ needs, thereby potentially harming our business. In addition, with respect to third-party intellectual property that is required for our technology development and operations, if problems or delays arise with respect to the timely development, quality and provision thereof to us, our customers’ products may be delayed, resulting in underutilization of our capacity. If any of our intellectual property vendors goes out of business, liquidates, merges with, or is acquired by, another company that discontinues the vendor’s previous line of business, or if we fail to maintain or acquire licenses to such intellectual property for any other reason, our business may be adversely affected. Compliance with existing or future governmental export regulations may reduce our sales or increase our operational costs. The export of wafers from our foundries to the destinations requested by our customers may be subject to U.S., Israeli, Italian and/or Japanese export control and other regulations established by other countries. Compliance with existing or evolving U.S., Israeli, Italian, Japanese or other applicable governmental regulations or obtaining timely domestic or foreign regulatory approvals or certificates may materially disrupt our business such as by reducing our sales or requiring extensive modifications to processes that we use, which could require extensive modifications to our customers’ products and/or increase our operational costs. We may not export products using or incorporating controlled technology without obtaining an export license, which may not always be granted. Similarly, we may be required to obtain export licenses for equipment we may seek to sell, and such licenses may not be granted in a timely manner or at all. These restrictions may make foreign competitors who are subject to less stringent controls on the export of their products more competitive in the global market. In addition, within our compliance procedures and export control assessments, we use certain software tools to flag sanctioned entities and require our customers to complete certain forms to provide required information. If such software tools fail to identify sanctioned entities, or information provided by customers is inaccurate or insufficient, we may unknowingly violate applicable regulations, which could expose us to fines, penalties, or restrictions on our export activities. 14 If certain of our wafers are defective, we may be subject to end customers’ product liability claims or other claims which could damage our reputation and harm our business. If our wafers are defective, we may be subject to product liability claims, as well as possible recall requests, safety alerts or advisory notices, despite our customary terms and conditions stating that we have no such liability for any such failures that may be caused to the end users. We cannot assure you that our terms and conditions will not prevent end users or other customers from filing charges against us or seeking damages from us or that our insurance policies will compensate us fully for claims that may be made against us. In addition, we may be unable to obtain insurance in the future at satisfactory rates, with adequate coverage, or at all. Product liability claims or product recalls in the future, regardless of their ultimate outcome, may have a material adverse effect on our business, reputation, financial condition and our ability to attract and retain customers. A workforce that is unionized may have an adverse impact on our costs, may disrupt our operations by potential work stoppages, strikes or other collective actions and adversely affect our operational and financial results. Significant portions of the employees at Fab 3 and at TPSCo’s fabs in Japan are represented by unions and covered by collective bargaining agreements. We cannot predict the effect that union representation or future organizational activities will have on our operational costs and business. We cannot assure you that our fabs will not experience a material work stoppage, strike or other collective action in the future, or incur increased costs in connection with the renewal of such bargaining agreements or other potential union activities, which may disrupt our fabs’ continued operations, their costs, operational performance metrics, and our operational and financial results. In addition, there have been attempts, including recently, by the General Federation of Labor in Israel (“Histadrut”) to organize and establish a representative labor union for our Israeli employees. Under Israeli law, establishing a representative labor union requires that at least one-third of the Israeli employees join the Histadrut, and in such a case, all employees would be liable to pay its membership fees. While the Histadrut’s attempts have not succeeded to date, if a representative labor union were to be established in the future, we would need to conduct negotiations with the representative labor union and the Histadrut regarding the terms of employment and benefits of the employees, which could result in the incurrence of additional labor costs and/or work stoppages, which in turn could adversely affect our business and financial results. Climate change may negatively affect our business. There is significant concern regarding climate change and its potential dramatic effects on human activity if no aggressive remediation steps are taken. Legislative developments with respect to reductions in greenhouse gas emissions may result in increased energy, transportation and raw material costs. Scientific examination of, political attention to, and rules and regulations on, issues surrounding the existence and extent of climate change may result in increased operational costs due to increase in the prices of energy and introduction of energy or carbon tax. A variety of regulatory developments have been introduced that focus on restricting or managing emissions of carbon dioxide, methane, tetrafluoromethane (CF4), hexafluoroethane (C2F6), octafluororopane (C3F8), octafluorobutane (c-C4F8), suflur hexafluoride (SF6), nitrogen trifluoride (NF3), trifluoromethane (CHF3) and other greenhouse gases. Enterprises may need to purchase new equipment at higher costs or raw materials with lower carbon footprints. In addition, there are restrictions and limited quota imposed by the Israeli government that restrict the import of certain of such materials and we may be unable to obtain all material required for our operations. These developments and further legislation that is likely to be enacted, such as changes in environmental regulations on the use of per fluorinated compounds, may increase our operational costs, which may adversely affect our results of operation and financial condition. 15 Compliance with U.S. rules and regulations concerning conflict minerals may affect our ability or the ability of our suppliers to purchase raw materials at an effective cost and may adversely affect our business. Our industry relies on raw materials that consist of, contain or incorporate certain minerals sourced from the Democratic Republic of Congo (“DRC”) or adjoining countries that are subject to regulation. These minerals are commonly referred to as conflict minerals. Conflict minerals that may be used by our suppliers include Columbite-tantalite (derivative of tantalum [Ta]), Cassiterite (derivative of tin [Sn]), gold [Au], Wolframite (derivative of tungsten [W]), and Cobalt [Co]. We are currently subject to the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that require due diligence and disclosure as to whether our products contain conflict minerals. Any regulatory changes concerning the use of conflict minerals could adversely affect the sourcing, availability and pricing of the materials used in the manufacturing process of our products. In addition, we will likely incur additional costs to comply with any new conflict minerals rules, including costs related to potential additional disclosure requirements and conducting additional diligence procedures to provide additional information with respect to the sources of conflict minerals that may be used in, or necessary to the production of, our products and, if applicable, potentially making changes to our products, processes or sources of supply as a consequence of such verification activities. It is also possible that we may face reputational harm and/or may lose customers if we determine that certain of our products, processes or sources of supply use conflict materials from countries directly or indirectly financing or benefitting armed groups, which would require us to ensure that such source responsibly sources minerals in conformance with applicable standards or change the source of supply and may adversely impact our revenue and business. Security, cyber and privacy breaches may harm our business and operations. Any security breach, including those resulting from a cybersecurity attack or any unauthorized access, unauthorized usage, virus or similar breach or disruption could result in the loss of confidential information, damage to our fab operations, damage to our reputation, early termination of our contracts, litigation, regulatory investigations or other liabilities. If our security measures are breached as a result of third‑party action, employee error, malfeasance or otherwise and, as a result, someone obtains unauthorized access to our, our customers’, our employees’ or any other third-party’s confidential information, our reputation may be damaged, we may face potential disruption and loss, especially due to the possible substantial damage if operations cannot be quickly restored, our business may suffer, and we could incur significant liability. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Techniques used to obtain unauthorized access or to sabotage systems change frequently and may not be recognized until launched against a target. The rapid expansion in the availability and sophistication of AI and ML driven tools is significantly reshaping the cyber threat landscape. These tools are increasingly being leveraged by malicious actors to automate, scale and refine cyberattacks, making them more targeted, convincing and difficult to detect. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. Although we have invested in measures to reduce these risks, we cannot assure you that these measures will be successful in preventing compromise and/or disruption of our information technology systems and related data. If an actual or perceived material security breach occurs, the market’s perception of our security measures may be harmed and we could lose sales and customers as well as incur operational damage to our equipment and/or products. 16 Environmental, social, and governance (“ESG”) initiatives could increase our costs or negatively impact our reputation, which may adversely impact our public image, operations, business and/or financial condition. There has been varying focus across industries on companies’ ESG and sustainability practices. Expectations regarding voluntary ESG initiatives and disclosures and consumer demand for alternative forms of energy, which are continuing to evolve, may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), changes in demand for certain products, enhanced compliance or disclosure obligations, or other adverse impact to our business, financial condition or results of operations. While we engage in voluntary initiatives (such as disclosures, certifications, and improvement goals, among others) to increase our company’s contribution to society and our environment, such initiatives may be costly and may not generate the desired impact. Actions that we may take or statements that we may make based on expectations, assumptions, or third-party information that we currently believe to be reasonable, may subsequently be determined to be erroneous or subject to other interpretations. Our current actions may subsequently be determined to be insufficient by various stakeholders, and we may be requested to adjust or improve certain ESG initiatives and/or disclosures. Certain market participants, including major institutional investors and capital providers, have used third-party benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions. Unfavorable ESG ratings could lead to negative investor sentiment towards us or our industry, which could negatively impact our share price as well as our access to and cost of capital. ESG-related regulation may also result in increased compliance costs or scrutiny. There can be no certainty that we will successfully navigate or manage ESG issues or that we will successfully meet investors or others’ expectations. Any failure, or perceived failure, by us in this regard could have a material adverse effect on our reputation with customers, employees, other third parties and the communities and industries in which we operate, as well as on our business, share price, financial condition, access to capital or results of operations. If we are unable to successfully deploy artificial intelligence (“AI”) and/or machine learning (“ML”), we may suffer a competitive disadvantage. AI and ML are increasingly being adopted across the semiconductor industry and the broader markets in which we and our customers operate, and the development, deployment and integration of AI and ML capabilities may become an increasingly important factor in our ability to compete effectively, improve operational efficiency, support our research and development efforts and meet evolving customer expectations. We are evaluating AI and ML tools across our products, services and internal business operations. If we are unable to successfully deploy AI and/ or ML across our products and services and our business operations and adequately anticipate and keep pace with developments in the AI and ML space, and if our peers are successful in doing so, we may suffer a competitive disadvantage, which could have a material adverse effect on our business, financial condition and results of operations. 17 In addition, the rapid growth of AI and ML tools expands both the scope and complexity of the risk environment, including cyber risks, and requires continuous governance and organizational awareness. In the event that AI and/ or ML is not used responsibly in our products and services, it may result in reputational or financial harm and liability and may cause us to incur costs to resolve such issues. The use of AI and ML poses emerging legal, social, and ethical issues and presents risks and challenges that could affect its adoption, and therefore our business. Leveraging AI and ML capabilities to potentially improve our internal functions and operations may present further risks, costs, uncertainties and challenges. RISKS RELATED TO OUR SECURITIES Fluctuations in the market price of our traded securities may significantly affect our ability to raise new capital. The capital markets, in general, have experienced volatility that often has been unrelated to the operating performance of the traded companies. The share price of many companies in the semiconductor industry has experienced wide fluctuations, which has often been unrelated to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the market price of our securities, regardless of our actual operating performance. In addition, it is possible that our operating results may differ from the expectations of public market analysts and investors, which may adversely affect the price of our securities. Adverse impact to the market price of our securities may negatively impact our ability to raise new capital in order to finance our growth plans, obligations and liabilities and/or re-finance our debt, and/or may cause us to receive less favorable terms than expected to the extent we will decide to raise any capital. We are a foreign private issuer and, as a result, the public reporting and disclosure rules to which we are subject, and the corporate governance practices that we are permitted to follow, may provide less protection to our investors than is accorded to investors under rules applicable to domestic U.S. issuers. We report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as a foreign private issuer, which means we are exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including the proxy rules and the rules requiring the filing with the U.S. Securities and Exchange Commission (“SEC”) of quarterly reports on Form 10-Q and current reports on Form 8-K. We furnish and intend to continue furnishing information regarding our quarterly financial results to the SEC on Form 6-K for so long as we are subject to the reporting requirements of Section 13(g) or 15(d) of the Exchange Act, although the information we furnish may not be the same as the information that is required in quarterly reports on Form 10-Q for U.S. domestic issuers. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD (Fair Disclosure), aimed at preventing issuers from making selective disclosures of material information. In addition, our principal shareholders are not subject to Section 16(a) of the Exchange Act, which requires disclosure with respect to trading activity in the issuer’s securities, and our officers, directors and principal shareholders are exempt from the “short-swing” profit recovery provisions of Section 16(b) of the Exchange Act. As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of those otherwise required under the Listing Rules of the Nasdaq Stock Market for domestic U.S. issuers, provided that we disclose the requirements we are not following and describe the home country practices we are following (see “Item 16G. Corporate Governance”). The public reporting and disclosure rules to which we are subject under the Exchange Act, and the corporate governance practices that we are permitted to follow, may provide less protection to our investors than is accorded to investors under rules applicable to domestic U.S. issuers. 18 We do not expect to pay dividends in the foreseeable future. We currently intend to use our future cash and earnings, along with our existing cash balance and deposits, to finance our growth and acquisition strategy, capacity expansion, ongoing operations, and other business and operational needs, including the $920 million capital expenditure plan in order to support our SiPho and SiGe capability and capacity growth at Fabs 2, 3, 7, and 9, the possible expansion of the 300mm capacity and capabilities build-out in a new shell in Uozu, Japan, adjacent to Fab 7 (subject to METI subsidies and other considerations), and the additional equipment for the Agrate facility. Therefore, we do not anticipate paying dividends in the foreseeable future. We may, however, use our existing cash balance and/or future cash earnings to execute share repurchases. Our board of directors has sole discretion regarding whether to pay dividends or adopt a share repurchase program. If our board of directors decides in the future to pay dividends or adopt a share repurchase program, the form, timing, frequency and amount will depend on several factors, including our future growth and acquisition strategy, our capacity growth plans, future operations and earnings, capital requirements and surplus, general financial condition, contractual and legal restrictions, the trading price of our ordinary shares, and other factors that our directors may deem relevant. The Israeli Companies Law, 1999 (the “Companies Law”) and regulations thereunder impose conditions on our ability to declare and pay dividends and/or execute share repurchases. Payment of dividends and share repurchases may also be subject to Israeli withholding taxes. See Exhibit 2.1 “Description of Securities—Dividend and Liquidation Rights” and “Item 10. Additional Information—E. Taxation—Israeli Taxation” for more information. If you are considering investing in our ordinary shares, you should not rely on future dividend income and/or share repurchases, and any gains from the investment will likely depend on the price performance of our traded ordinary shares, which may or may or may not be favorable. RISKS RELATED TO OUR OPERATIONS IN ISRAEL Political, economic and military instability in Israel and the Middle East region may harm our business. Our Fab 2 facility, our design center and certain of our corporate and sales offices are located in Israel. In addition, most our officers and directors are residents of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business. Since the establishment of the State of Israel in 1948, Israel has been subject to armed conflicts with neighboring countries, as well as terrorist activities, with varying levels of severity. Since the October 7, 2023 attacks by Hamas terrorists on Israel’s citizens in areas in the south of Israel, which resulted in extensive deaths, injuries and kidnapping of civilians and soldiers, there have been ongoing hostilities between Israel and Hamas, Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through Iranian proxies, such as the Houthi movement in Yemen. Most recently, in February 2026, hostilities escalated across the region, involving Iran attacks on Israel, renewed conflicts between Israel and Hezbollah, and Iranian strikes against U.S. and other targets in the Gulf region. While temporary ceasefires between the United States, Israel, and Iran, and between Israel and Hezbollah, were reached in April 2026 and remain in effect as of the date hereof, there can be no assurance that the temporary ceasefire agreements will be upheld or that permanent ceasefires will be reached, and the situation in Israel and the region remains highly volatile. The intensity and duration of attacks by Hamas, Hezbollah, Iran, and other neighboring countries against Israel is difficult to predict, as are economic implications on our business and operations and on Israel’s economy, in general. 19 In connection with the ongoing war and hostilities, several hundred thousand Israeli military reservists were drafted to perform military service. While we have not been materially adversely impacted to date by any absences of our personnel, the absence of a significant number of our employees (including key employees) related to their, or their spouse’s, active military reserve duty, which may be for extended periods of time, could disrupt our operations and materially and adversely affect our Israeli operations, as well as our business and results of operations. We have robust business continuity procedures in place, including multi-site qualification of certain process flows and information technology safeguards. However, with regard to our capacity expansion plans involving equipment installation by foreign vendors and others in Israel, and ongoing tool maintenance, there is no assurance that we will be able to complete the installation and qualification of all such equipment in a timely manner to satisfy customer demand, due to the inability of such vendors to travel to Israel and arrive to the fab to install and/or repair tools due to the abovementioned war. Further, there is no assurance that, by the time all such machinery is installed and qualified, customer demand will require full or high utilization of such machinery tools and there is no assurance that the renewal or continuation of the US/Iran/Israel/Hezbollah conflict will not negatively impact our ability to install the machinery in our Israeli fab located in the northern part of Israel, as a result of vendors’ inability to arrive to Israel, damage to the fab or otherwise. These events could lead to increased costs, loss of business opportunities, a slower-than-expected installation schedule, lower-than-expected margins, loss of customers, risks to employee safety, and challenges to business continuity, potentially resulting in business and financial losses. Our property and business interruption insurance may not adequately compensate us for losses that we may incur, and any losses or damages incurred by us may have a material adverse effect on our business. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for all damages incurred. The continuation of the war also led to a deterioration in certain indicators of Israel’s economic standing, for instance, a downgrade in Israel’s credit rating by rating agencies such as Moody’s, S&P Global, and Fitch. The global perception of Israel and Israeli companies is influenced by the actions of international judicial bodies, which may lead to increased sanctions and other negative measures against Israel and Israeli companies, including boycotts of Israeli goods and services or restrictions on doing business with Israel and Israeli companies. These restrictions may materially limit our ability to obtain raw materials from these countries or sell our products to companies in these countries. In addition, the political and security environment in Israel may result in parties with whom we have agreements claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions. Any hostilities involving Israel, or the interruption or curtailment of trade between Israel and its trading partners, may adversely affect our operations and make it more difficult for us to do business and raise capital, and may adversely affect the share price of publicly traded companies with operations in Israel, such as us. In addition, political conditions within Israel may affect our operations. Prior to the October 2023 war and again recently, the Israeli government has pursued changes to Israel’s judicial system. In response to these developments, certain individuals, organizations, and institutions, both within and outside of Israel, voiced concerns that such proposed changes, if adopted, may negatively impact the business environment in Israel. Such proposed changes may also lead to political instability and/or civil unrest. Actual or perceived political instability in Israel, or any negative changes in the political environment, may adversely affect the Israeli economy and, in turn, our business, financial condition, and results of operations. 20 If the exemption allowing us to operate our Israeli factories seven days a week or our business license is not renewed, our business may be adversely affected. We operate our Israeli factories seven days a week pursuant to an exemption (which we need to timely renew) from the law that requires businesses in Israel to be closed from sundown on Friday through sundown on Saturday. In addition, our business license certificate issued by municipality of Migdal Ha’emek, Israel is required to be renewed periodically. If such exemption or our business license are not renewed in the future, our financial results and business may be harmed. It may be difficult to enforce a U.S. judgment against us, our officers and directors, or to assert U.S. securities law claims in Israel or serve process on our non-U.S. resident officers and directors. Tower is incorporated in Israel and most of its executive officers and directors are not residents of the United States (excluding the employees of its U.S. subsidiaries), and a majority of its assets (excluding its U.S. subsidiaries and their assets) and the assets of its non-U.S. resident directors and officers are located outside the United States. Service of process upon us and/or our non-U.S. resident directors and/or officers may be difficult to obtain within the United States. Additionally, a judgment obtained in the United States against Tower and/or any of our non-U.S. executive officers and/or directors, including one based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States (except to the extent that it relates to Tower’s U.S. subsidiaries, its assets or employees). Additionally, Israeli courts might not enforce judgments obtained in the United States against us or our non-U.S. directors and executive officers, which may make it difficult to collect on judgments rendered against us or our non-U.S. officers and directors. In addition, it may be difficult to assert claims under U.S. securities laws or obtain a judgment based on civil liability provisions under U.S. federal securities laws claimed in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws against us or our non-U.S. officers or directors on the grounds that Israel may not be the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above. Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, all or a significant portion of our shares or assets, which may delay or prevent a change of control, even when the terms of such a transaction are favorable to us and/or our shareholders. Provisions of Israeli law could have the effect of delaying or preventing a change in control and may make it more difficult for a third-party to acquire all or a significant portion of our shares or assets, even if doing so would be considered to be beneficial by some of our shareholders. Among other things, Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares of a public company above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions. Furthermore, Israeli tax considerations may make potential transactions unappealing to Tower or to its shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example, with respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfilment of numerous conditions, including a holding period of two years from the date of the transaction during which certain sales and dispositions of shares of the participating companies are restricted. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable, even if no actual disposition of the shares has occurred. 21 The rights and responsibilities of our shareholders will be governed by Israeli law which differs in some material respects from the rights and responsibilities of shareholders of U.S. corporations. The rights and responsibilities of the holders of our ordinary shares are governed by our articles of association and by Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in typical U.S. registered corporations. In particular, a shareholder of an Israeli company has certain duties to act in good faith and in a customary manner in exercising his or her or its rights and fulfilling his or her or its obligations towards the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on amendments to a company’s articles of association, increases in a company's authorized share capital, and mergers and certain transactions requiring shareholders’ approval under the Companies Law. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or officer of the company or has other powers toward the company has a duty of fairness toward the company. However, Israeli law does not define the substance of this duty of fairness. There is little case law available to assist in understanding the implications of these provisions that govern shareholder behavior. These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S. corporations.