Includes an increase of $282,582 in customers' advances, net. 0000928876 2026-01-01 2026-06-30 0000928876 2025-01-01 2025-06-30 0000928876 2025-04-01 2025-06-30 0000928876 2026-04-01 2026-06-30 0000928876tsem:NuvotonTechnologyCorporationJapanMember 2026-03-01 2026-03-25 0000928876us-gaap:CommonStockMember 2026-01-01 2026-06-30 0000928876us-gaap:AdditionalPaidInCapitalMember 2026-01-01 2026-06-30 0000928876us-gaap:DeferredCompensationShareBasedPaymentsMember 2026-01-01 2026-06-30 0000928876us-gaap:RetainedEarningsMember 2026-01-01 2026-06-30 0000928876us-gaap:ComprehensiveIncomeMember 2026-01-01 2026-06-30 0000928876us-gaap:CommonStockMember 2025-12-31 0000928876us-gaap:AdditionalPaidInCapitalMember 2025-12-31 0000928876us-gaap:DeferredCompensationShareBasedPaymentsMember 2025-12-31 0000928876tsem:AccumulatedOtherComprehensiveIncomeExcludingForeignCurrencyMember 2025-12-31 0000928876us-gaap:AccumulatedTranslationAdjustmentMember 2025-12-31 0000928876us-gaap:RetainedEarningsMember 2025-12-31 0000928876us-gaap:TreasuryStockCommonMember 2025-12-31 0000928876us-gaap:NoncontrollingInterestMember 2025-12-31 0000928876 2025-12-31 0000928876us-gaap:CommonStockMember 2026-06-30 0000928876tsem:AccumulatedOtherComprehensiveIncomeExcludingForeignCurrencyMember 2026-01-01 2026-06-30 0000928876us-gaap:AccumulatedTranslationAdjustmentMember 2026-01-01 2026-06-30 0000928876 2026-06-30 0000928876us-gaap:NoncontrollingInterestMember 2026-06-30 0000928876us-gaap:TreasuryStockCommonMember 2026-06-30 0000928876us-gaap:RetainedEarningsMember 2026-06-30 0000928876us-gaap:AccumulatedTranslationAdjustmentMember 2026-06-30 0000928876tsem:AccumulatedOtherComprehensiveIncomeExcludingForeignCurrencyMember 2026-06-30 0000928876us-gaap:DeferredCompensationShareBasedPaymentsMember 2026-06-30 0000928876us-gaap:AdditionalPaidInCapitalMember 2026-06-30 0000928876us-gaap:NoncontrollingInterestMember 2026-01-01 2026-06-30 0000928876 2024-12-31 0000928876 2025-06-30 0000928876tsem:TowerPartnersSemiconductorCoLimitedMember 2026-06-30 0000928876tsem:NuvotonTechnologyCorporationJapanMember 2026-06-30 xbrli:pure xbrli:shares iso4217:USD iso4217:USDxbrli:shares
Exhibit 99.1
 
TOWER SEMICONDUCTOR LTD.
AND SUBSIDIARIES
 
UNAUDITED CONDENSED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2026
 
 
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
 
INDEX TO UNAUDITED CONDENSED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2026

 

 
Page
  
F - 2
  
F - 3
  
F - 4
  
F - 5
  
F - 6 - F - 7
  
F - 8 - F - 9
 

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
 
   
June 30,
    
December 31,
  
   
2026
    
2025
  
ASSETS
            
             
CURRENT ASSETS
            
Cash and cash equivalents
  
$
231,188
    
$
235,369
  
Short-term deposits
    
1,250,225
      
916,541
  
Trade accounts receivable
    
202,871
      
222,795
  
Inventories
    
244,356
      
256,855
  
Other current assets
    
57,330
      
78,062
  
                 
Total current assets
    
1,985,970
      
1,709,622
  
                 
PROPERTY AND EQUIPMENT, NET
    
1,649,600
      
1,463,056
  
INTANGIBLE ASSETS, NET
    
886
      
1,530
  
GOODWILL
    
7,000
      
7,000
  
OTHER LONG-TERM ASSETS, NET
    
127,980
      
141,082
  
                 
TOTAL ASSETS
  
$
3,771,436
    
$
3,322,290
  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                
                 
CURRENT LIABILITIES
                
Current maturities of long-term debt
  
$
16,921
    
$
28,112
  
Trade accounts payable
    
122,605
      
123,915
  
Deferred revenue and customers' advances
    
176,038
      
25,581
  
Employee related liabilities
    
74,398
      
70,299
  
Other current liabilities
    
14,249
      
15,840
  
                 
Total current liabilities
    
404,211
      
263,747
  
                 
LONG-TERM DEBT
    
124,775
      
133,406
  
LONG-TERM CUSTOMERS' ADVANCES
    
145,368
      
1,932
  
EMPLOYEE RELATED LIABILITIES
    
10,186
      
6,448
  
OTHER LONG-TERM LIABILITIES 
    
15,524
      
12,174
  
                 
TOTAL LIABILITIES
    
700,064
      
417,707
  
                 
TOTAL SHAREHOLDERS' EQUITY
    
3,071,372
      
2,904,583
  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
3,771,436
    
$
3,322,290
  
 
See notes to the consolidated financial statements.
        
 
F - 2

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars and shares in thousands, except per share data)
 
   
Six months ended June 30,
    
Three months ended June 30,
  
   
2026
    
2025
    
2026
    
2025
  
REVENUE
  
$
873,710
    
$
730,231
    
$
460,079
    
$
372,061
  
                                 
COST OF REVENUE
    
624,987
      
577,034
      
322,307
      
292,035
  
GROSS PROFIT
    
248,723
      
153,197
      
137,772
      
80,026
  
                                 
OPERATING COSTS AND EXPENSES:
                                
Research and development
    
47,099
      
39,590
      
23,569
      
19,418
  
Marketing, general and administrative
    
46,769
      
40,844
      
23,913
      
20,743
  
     
93,868
      
80,434
      
47,482
      
40,161
  
                                 
OPERATING PROFIT
    
154,855
      
72,763
      
90,290
      
39,865
  
                                 
FINANCING AND OTHER INCOME, NET
    
25,420
      
24,985
      
15,902
      
14,387
  
PROFIT BEFORE INCOME TAX
    
180,275
      
97,748
      
106,192
      
54,252
  
                                 
INCOME TAX EXPENSE, NET
    
(22,091
)
    
(12,439
)
    
(15,573
)
    
(8,660
)
NET PROFIT
    
158,184
      
85,309
      
90,619
      
45,592
  
                                 
Net loss (income) attributable to non-controlling interest
    
(2,383
)
    
1,384
      
150
      
959
  
                                 
NET PROFIT ATTRIBUTABLE TO THE COMPANY
  
$
155,801
    
$
86,693
    
$
90,769
    
$
46,551
  
                                 
BASIC EARNINGS PER SHARE:
                                
Earnings per share
  
$
1.38
    
$
0.78
    
$
0.80
    
$
0.42
  
Weighted average number of shares
    
112,738
      
111,693
      
112,910
      
111,810
  
                                 
DILUTED EARNINGS PER SHARE:
                                
Earnings per share
  
$
1.36
    
$
0.77
    
$
0.79
    
$
0.41
  
Weighted average number of shares
                                
   used for diluted earnings per share
    
114,340
      
113,218
      
114,427
      
113,282
  
 
See notes to the consolidated financial statements.
              
 
F - 3

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(dollars in thousands)
 
   
Six months ended June 30,
  
   
2026
    
2025
  
Net profit
  
$
158,184
    
$
85,309
  
                 
Other comprehensive income, net of tax:
                
Foreign currency translation adjustment
    
(9,162
)
    
17,087
  
Unrealized gain (loss) on derivatives
    
(1,097
)
    
11,660
  
Change in employees plan assets and benefit obligations
    
(8
)
    
43
  
                 
Comprehensive income
    
147,917
      
114,099
  
                 
Comprehensive loss (income) attributable to non-controlling interest
    
57
      
(4,436
)
Comprehensive income attributable to the Company
  
$
147,974
    
$
109,663
  
 
See notes to the consolidated financial statements.
      
 
F - 4

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
(dollars and share data in thousands)
 
   
THE COMPANY'S SHAREHOLDERS' EQUITY
                    
                           
Accumulated
    
Foreign
                                
   
Ordinary
    
Ordinary
    
Additional
    
Cumulative
    
other
    
currency
                
Total
    
Non
        
   
shares
    
shares
    
paid-in
    
stock based
    
comprehensive
    
translation
    
Accumulated
    
Treasury
    
comprehensive
    
controlling
        
   
issued
    
amount
    
capital
    
compensation
    
income
    
adjustments
    
profit
    
stock
    
income
    
interest
    
Total
  
BALANCE AS OF JANUARY 1, 2026
    
112,621
    
$
450,905
    
$
1,373,643
    
$
274,319
    
$
4,704
    
$
(71,161
)
  
$
895,949
    
$
(9,072
)
        
$
(14,704
)
  
$
2,904,583
  
Changes during the period:
                                                                                      
Issuance of ordinary shares upon vesting of RSUs
    
497
      
2,457
      
(2,457
)
                                                          
--
  
Employee stock-based compensation
                            
18,872
                                                    
18,872
  
Comprehensive income:
                                                                                      
Net profit
                                                    
155,801
            
$
155,801
      
2,383
      
158,184
  
Foreign currency translation adjustments
                                            
(6,722
)
                    
(6,722
)
    
(2,440
)
    
(9,162
)
Unrealized loss on derivatives
                                    
(1,097
)
                            
(1,097
)
            
(1,097
)
Change in employees plan
assets and benefit obligations
                      
(8
)
                            
(8
)
            
(8
)
Comprehensive income
                                                                  
$
147,974
                  
BALANCE AS OF JUNE 30, 2026
    
113,118
    
$
453,362
    
$
1,371,186
    
$
293,191
    
$
3,599
    
$
(77,883
)
  
$
1,051,750
    
$
(9,072
)
          
$
(14,761
)
  
$
3,071,372
  
OUTSTANDING SHARES, NET OF TREASURY STOCK
AS OF JUNE 30, 2026
    
113,031
                                                                                  
 
See notes to the consolidated financial statements.

 

F - 5

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
 
   
Six months ended June 30,
  
   
2026
    
2025
  
CASH FLOWS - OPERATING ACTIVITIES
            
                 
Net profit for the period
  
$
158,184
    
$
85,309
  
                 
Adjustments to reconcile net profit for the period
                
to net cash provided by operating activities:
                
Income and expense items not involving cash flows:
                
Depreciation and amortization
    
166,499
      
148,864
  
Other expense, net
    
7,237
      
4,117
  
                 
Changes in assets and liabilities, net:
                
                 
Trade accounts receivable
    
19,186
      
(1,382
)
Other current assets
    
16,797
      
620
  
Inventories
    
9,857
      
(11,873
)
Other long term assets
    
8,978
      
63
  
Trade accounts payable
    
(2,990
)
    
(2,959
)
Deferred revenue
    
11,311
      
1,179
  
Employee related liabilities and other current liabilities
    
2,229
      
9,298
  
Long-term employee related liabilities
    
3,722
      
607
  
Other long-term liabilities
    
3,342
      
(4,414
)
Increase (decrease) in customers' advances, net
    
282,582
      
(12,908
)
                 
Net cash provided by operating activities
    
686,934
 (1)    
216,521
  
                 
(1) Includes an increase of $282,582 in customers' advances, net.
                
                 
CASH FLOWS - INVESTING ACTIVITIES
                
Investments in property and equipment, net
    
(342,953
)
    
(222,093
)
Deposits and other investments, net
    
(330,000
)
    
16,470
  
                 
Net cash used in investing activities
    
(672,953
)
    
(205,623
)
                 
CASH FLOWS - FINANCING ACTIVITIES
                
Proceeds from loans
    
--
      
13,808
  
Loans repayment
    
--
      
(19,819
)
Principal payments on account of capital lease obligation
    
(15,693
)
    
(15,759
)
                 
Net cash used in financing activities
    
(15,693
)
    
(21,770
)
                 
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGE
    
(2,469
)
    
4,271
  
                 
DECREASE IN CASH AND CASH EQUIVALENTS
    
(4,181
)
    
(6,601
)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
    
235,369
      
271,894
  
CASH AND CASH EQUIVALENTS - END OF PERIOD
  
$
231,188
    
$
265,293
  
 
See notes to the consolidated financial statements.
      
 
F - 6

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
 
   
Six months ended June 30,
  
   
2026
    
2025
  
NON-CASH ACTIVITIES:
            
Investments in property and equipment
  
$
51,111
    
$
38,518
  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                
Cash received from interest, net during the period
  
$
20,170
    
$
12,365
  
Cash paid for income tax, net during the period
  
$
8,603
    
$
8,461
  
 
See notes to the consolidated financial statements.
      
 
F - 7

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2026
(dollars in thousands, except per share data)

 

NOTE 1     -     GENERAL
 
Basis for Presentation
 
The unaudited condensed interim consolidated financial statements of Tower Semiconductor Ltd. (“Tower” or the “Company”) as of June 30, 2026 and for the three and six months ended June 30, 2026 and June 30, 2025 include the financial statements of Tower and (i) its wholly-owned subsidiary Tower US Holdings Inc., the sole owner of: (1) Tower Semiconductor NPB Holdings, Inc., Tower Semiconductor Newport Beach, Inc., an independent semiconductor foundry, and its wholly-owned subsidiary Newport Fab LLC (Tower Semiconductor NPB Holdings, Inc., Tower Semiconductor Newport Beach, Inc. and Newport Fab LLC, collectively referred to herein as “TSNB”); and (2) Tower Semiconductor San Antonio, Inc. (“TSSA”); (ii) its 51% owned subsidiary, Tower Partners Semiconductor Co., Ltd. (“TPSCo”), an independent semiconductor foundry which operates two semiconductor facilities located in Tonami and Uozu in Hokuriku Japan), with the other 49% of TPSCo’s shares held by Nuvoton Technology Corporation Japan (“NTCJ”); and (iii) its wholly-owned subsidiary, Tower Semiconductor Italy S.r.l. (“TSIT”), incorporated in 2021 following the collaborative arrangement signed in 2021 with ST Microelectronics S.r.l (“ST”) with regards to ST’s 300 mm facility in Agrate, Italy.
 
The Company’s unaudited condensed interim consolidated financial statements are presented after elimination of inter-company transactions and balances and are presented in accordance with U.S. generally accepted accounting principles (“US GAAP”).
 
The unaudited condensed interim consolidated financial statements of the Company should be read in conjunction with the audited consolidated financial statements of the Company as of December 31, 2025 and for the year then ended, including the notes thereto.
 
In the opinion of the Company's management, the unaudited condensed interim consolidated financial statements include all adjustments necessary for a fair presentation of the Company’s financial position as of the dates presented and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected on a full-year basis.

 

F - 8

 

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2026
(dollars in thousands, except per share data)

 

NOTE 2     -     INVENTORY
 
Inventories consist of the following as of June 30, 2026 and December 31, 2025:
 
Details
  
June 30,
2026
    
December 31,
2025
  
Raw materials
  
$
76,443
    
$
105,301
  
Work in process
    
154,876
      
144,373
  
Finished goods
    
13,037
      
7,181
  
   
$
244,356
    
$
256,855
  

 

NOTE 3     -     RECENT DEVELOPMENTS
 
On March 25, 2026, the Company and NTCJ entered into a framework agreement to implement a strategic restructuring of TPSCo’s business operations, under which Tower will acquire full ownership and operational control of the Uozu fab while the Tonami fab will remain within TPSCo, which will become a wholly owned subsidiary of NTCJ, for consideration of a $25,000 payment by NTCJ to Tower to be made on the closing date.  The transaction is expected to close on April 1, 2027, subject to the satisfaction of customary closing conditions and receipt of applicable regulatory approvals. Under the new structure, Tower’s new wholly owned subsidiary in Japan (“TSJPN”) will own all Fab 7 (300mm) manufacturing production tools, and manage all Fab 7 operations, employees and business activities.
 
In March 2026, GlobalFoundries Inc. filed three lawsuits against the Company in the U.S. International Trade Commission (ITC) and the United States District Court for the Western District of Texas alleging infringement of certain of its patents.  Thereafter, an additional lawsuit has been filed by GlobalFoundries in China with respect to alleged infringement of a Chinese patent which is a counterpart of one of the patents in the ITC case.  The Company disputes these claims.
 
In July 2026, the Company announced its intention to expand its 300mm Silicon Photonics (SiPho) and Silicon Germanium (SiGe) capacity and capabilities in Japan with the support of the Government of Japan through cash grants that are expected to be received from its Ministry of Economy, Trade and Industry (METI). The plan consists of repurposing the Arai facility, formerly Fab 6 (a 200mm fab that ceased its operations in 2022), for 300mm Silicon Photonics manufacturing, maximizing the existing Fab 7 300mm output in Uozu, and a planned additional 300mm manufacturing facility that may be built adjacent to Fab 7, following signing and closing of related agreements with contractors and other service and equipment providers, obtaining necessary permits, finalizing METI grants terms and covenants thereto and other consents that may be required.

 

F - 9