Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2019 |
Entity File Number | 0-24790 |
Entity Registrant Name | TOWER SEMICONDUCTOR LTD. |
Entity Incorporation, State or Country Code | IL |
Entity Address, Address Line One | Ramat Gavriel Industrial Park |
Entity Address, Address Line Two | P.O. Box 619 |
Entity Address, City or Town | Migdal Haemek |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 2310502, |
Title of 12(b) Security | Ordinary Shares, par value New Israeli Shekels 15.00 per share |
Trading Symbol | TSEM |
Name of Exchange on which Security is Registered | NASDAQ |
Entity Common Stock, Shares Outstanding | 106,808,072 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0000928876 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Business Contact [Member] | |
Contact Personnel Name | Nati Somekh |
Entity Address, Address Line One | P.O. Box 619 |
Entity Address, City or Town | Migdal Haemek |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 2310502 |
City Area Code | 972 |
Local Phone Number | 4-6506109 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 355,561 | $ 385,091 | |
Short-term interest-bearing deposits | 215,609 | 120,079 | |
Marketable securities | 176,070 | 135,850 | |
Trade accounts receivable | 126,966 | 153,409 | |
Inventories | 192,256 | 170,778 | |
Other current assets | 22,019 | 22,752 | |
Total current assets | 1,088,481 | 987,959 | |
LONG-TERM INVESTMENTS | 40,085 | 35,945 | |
PROPERTY AND EQUIPMENT, NET | 681,939 | 657,234 | |
INTANGIBLE ASSETS, NET | 10,281 | 13,435 | |
GOODWILL | 7,000 | 7,000 | |
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET | 105,047 | 88,404 | |
TOTAL ASSETS | 1,932,833 | 1,789,977 | |
CURRENT LIABILITIES | |||
Current maturities of long-term debt | 65,932 | 10,814 | |
Trade accounts payable | 119,199 | 104,329 | |
Deferred revenue and customers' advances | 10,322 | 20,711 | |
Employee related liabilities | 50,302 | 50,750 | |
Other current liabilities | 7,301 | 17,117 | |
Total current liabilities | 253,056 | 203,721 | |
LONG-TERM DEBT | |||
Debentures | 94,552 | 120,170 | |
Other long-term debt | 151,269 | 136,499 | |
LONG-TERM CUSTOMERS' ADVANCES | 28,196 | 28,131 | |
EMPLOYEE RELATED LIABILITIES | 13,285 | 13,898 | |
DEFERRED TAX LIABILITY | [1] | 45,238 | 50,401 |
OTHER LONG-TERM LIABILITIES | 514 | 952 | |
TOTAL LIABILITIES | 586,110 | 553,772 | |
Ordinary shares of NIS 15 par value: 150,000 authorized as of December 31, 2019 and 2018 106,895 and 106,808 issued and outstanding, respectively, as of December 31, 2019 105,066 and 104,979 issued and outstanding, respectively, as of December 31, 2018 | 426,111 | 418,492 | |
Additional paid-in capital | 1,395,376 | 1,380,396 | |
Capital notes | 20,758 | ||
Cumulative stock based compensation | 107,774 | 93,226 | |
Accumulated other comprehensive loss | (18,244) | (23,388) | |
Accumulated deficit | (547,398) | (637,446) | |
SHAREHOLDERS' EQUITY, before treasury stock | 1,363,619 | 1,252,038 | |
Treasury stock, at cost - 87 shares | (9,072) | (9,072) | |
THE COMPANY'S SHAREHOLDERS' EQUITY | 1,354,547 | 1,242,966 | |
Non-controlling interest | (7,824) | (6,761) | |
TOTAL SHAREHOLDERS' EQUITY | 1,346,723 | 1,236,205 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,932,833 | $ 1,789,977 | |
[1] | Deferred tax assets and liabilities relating to Tower for the years 2019 and 2018 are computed based on the Israeli preferred enterprise tax rate of 7.5%. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares shares in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value | ₪ 15 | ₪ 15 |
Ordinary shares, authorized | 150,000 | 150,000 |
Ordinary shares, issued | 106,895 | 105,066 |
Ordinary shares, outstanding | 106,808 | 104,979 |
Treasury stock, shares | 87 | 87 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
REVENUES | $ 1,234,003 | $ 1,304,034 | $ 1,387,310 |
COST OF REVENUES | 1,004,332 | 1,011,087 | 1,033,005 |
GROSS PROFIT | 229,671 | 292,947 | 354,305 |
OPERATING COSTS AND EXPENSES: | |||
Research and development | 75,579 | 73,053 | 67,664 |
Marketing, general and administrative | 67,376 | 64,951 | 66,799 |
TOTAL OPERATING COSTS AND EXPENSES | 142,955 | 138,004 | 134,463 |
OPERATING PROFIT | 86,716 | 154,943 | 219,842 |
FINANCING INCOME (EXPENSE), NET | 12 | (13,184) | (15,447) |
OTHER INCOME (EXPENSE), NET | 4,293 | (2,442) | (2,627) |
PROFIT BEFORE INCOME TAX | 91,021 | 139,317 | 201,768 |
INCOME TAX BENEFIT (EXPENSE), NET | (2,948) | (5,938) | 99,888 |
NET PROFIT | 88,073 | 133,379 | 301,656 |
Net loss (income) attributable to non-controlling interest | 1,975 | 2,200 | (3,645) |
NET PROFIT ATTRIBUTABLE TO THE COMPANY | $ 90,048 | $ 135,579 | $ 298,011 |
BASIC EARNINGS PER ORDINARY SHARE: | |||
Earnings per share | $ 0.85 | $ 1.35 | $ 3.08 |
Weighted average number of ordinary shares outstanding | 106,256 | 100,399 | 96,647 |
DILUTED EARNINGS PER ORDINARY SHARE: | |||
Earnings per share | $ 0.84 | $ 1.32 | $ 2.90 |
Net profit used for diluted earnings per share | $ 90,048 | $ 135,579 | $ 306,905 |
Weighted average number of ordinary shares outstanding used for diluted earnings per share | 107,438 | 102,517 | 105,947 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net profit | $ 88,073 | $ 133,379 | $ 301,656 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustment | 3,478 | 3,599 | 5,681 |
Change in employees plan assets and benefit obligations, net of taxes | (1,118) | 269 | 511 |
Unrealized gain (loss) on derivatives | 3,696 | (2,704) | 1,796 |
Comprehensive income | 94,129 | 134,543 | 309,644 |
Comprehensive loss (income) attributable to non-controlling interest | 1,063 | 407 | (6,565) |
Comprehensive income attributable to the Company | $ 95,192 | $ 134,950 | $ 303,079 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Ordinary shares [Member] | Additional paid-in capital [Member] | Capital notes [Member] | Unearned compensation [Member] | Accumulated other comprehensive income (loss) [Member] | Foreign currency translation adjustments [Member] | Accumulated deficit [Member] | Treasury stock [Member] | Comprehensive income [Member] | Noncontrolling interest [Member] | Total |
BALANCE at Dec. 31, 2016 | $ 369,057 | $ 1,318,725 | $ 41,264 | $ 68,921 | $ (544) | $ (27,283) | $ (1,071,036) | $ (9,072) | $ (7,418) | $ 682,614 | |
BALANCE, SHARES at Dec. 31, 2016 | 93,071 | ||||||||||
Issuance of shares | $ 12,128 | 4,247 | 16,375 | ||||||||
Issuance of shares, shares | 2,914 | ||||||||||
Conversion of debentures and exercise of warrants into share capital | |||||||||||
Conversion of debentures and exercise of warrants into share capital, shares | |||||||||||
Exercise of options | $ 6,750 | 8,180 | 14,930 | ||||||||
Exercise of options, shares | 1,629 | ||||||||||
Capital notes converted into share capital | $ 3,792 | 16,714 | (20,506) | ||||||||
Capital notes converted into share capital, shares | 930 | ||||||||||
Employee stock-based compensation | 11,644 | 11,644 | |||||||||
Stock-based compensation related to the Facility Agreement with the Banks | |||||||||||
Dividend to Panasonic | (5,501) | (5,501) | |||||||||
Other comprehensive income: | |||||||||||
Profit | 298,011 | $ 298,011 | 3,645 | 301,656 | |||||||
Foreign currency translation adjustments | 2,761 | 2,761 | 2,920 | 5,681 | |||||||
Change in employees plan assets and benefit obligations | 511 | 511 | 511 | ||||||||
Unrealized gain (loss) on derivatives | 1,796 | 1,796 | 1,796 | ||||||||
Comprehensive income | 303,079 | 303,079 | |||||||||
BALANCE at Dec. 31, 2017 | $ 391,727 | 1,347,866 | 20,758 | 80,565 | 1,763 | (24,522) | (773,025) | (9,072) | (6,354) | 1,029,706 | |
BALANCE, SHARES at Dec. 31, 2017 | 98,544 | ||||||||||
Conversion of notes into share capital | $ 23,722 | 34,864 | 58,586 | ||||||||
Conversion of notes into share capital, shares | 5,790 | ||||||||||
Exercise of options and RSUs | $ 3,043 | (2,334) | 709 | ||||||||
Exercise of options and RSUs, shares | 732 | ||||||||||
Employee stock-based compensation | 12,661 | 12,661 | |||||||||
Other comprehensive income: | |||||||||||
Profit | 135,579 | 135,579 | (2,200) | 133,379 | |||||||
Foreign currency translation adjustments | 1,806 | 1,806 | 1,793 | 3,599 | |||||||
Change in employees plan assets and benefit obligations | 269 | 269 | 269 | ||||||||
Unrealized gain (loss) on derivatives | (2,704) | (2,704) | (2,704) | ||||||||
Comprehensive income | 134,950 | 134,950 | |||||||||
BALANCE at Dec. 31, 2018 | $ 418,492 | 1,380,396 | 20,758 | 93,226 | (672) | (22,716) | (637,446) | (9,072) | (6,761) | 1,236,205 | |
BALANCE, SHARES at Dec. 31, 2018 | 105,066 | ||||||||||
Exercise of options and RSUs | $ 2,727 | (886) | 1,841 | ||||||||
Exercise of options and RSUs, shares | 648 | ||||||||||
Capital notes converted into share capital | $ 4,892 | 15,866 | (20,758) | ||||||||
Capital notes converted into share capital, shares | 1,181 | ||||||||||
Employee stock-based compensation | 14,548 | 14,548 | |||||||||
Other comprehensive income: | |||||||||||
Profit | 90,048 | 90,048 | (1,975) | 88,073 | |||||||
Foreign currency translation adjustments | 2,566 | 2,566 | 912 | 3,478 | |||||||
Change in employees plan assets and benefit obligations | (1,118) | (1,118) | (1,118) | ||||||||
Unrealized gain (loss) on derivatives | 3,696 | 3,696 | 3,696 | ||||||||
Comprehensive income | $ 95,192 | 95,192 | |||||||||
BALANCE at Dec. 31, 2019 | $ 426,111 | $ 1,395,376 | $ 107,774 | $ 1,906 | $ (20,150) | $ (547,398) | $ (9,072) | $ (7,824) | $ 1,346,723 | ||
BALANCE, SHARES at Dec. 31, 2019 | 106,895 | ||||||||||
OUTSTANDING SHARES, NET OF TREASURY STOCK AS OF DECEMBER 31, 2019 at Dec. 31, 2019 | 106,808 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS - OPERATING ACTIVITIES | |||
Net profit | $ 88,073 | $ 133,379 | $ 301,656 |
Income and expense items not involving cash flows: | |||
Depreciation and amortization | 214,474 | 214,391 | 208,411 |
Effect of exchange rate differences on debentures | 10,294 | (9,791) | 12,865 |
Other expense (income), net | (4,293) | 2,442 | 2,627 |
Changes in assets and liabilities: | |||
Trade accounts receivable | 27,317 | (3,096) | (6,564) |
Other current assets | (4,600) | 11,260 | (8,321) |
Inventories | (21,021) | (26,344) | (4,277) |
Trade accounts payable | (339) | (3,562) | (8,649) |
Deferred revenue and customers' advances | (10,331) | 2,625 | (21,803) |
Employee related liabilities and other current liabilities | (9,435) | (867) | (8,219) |
Long-term employee related liabilities | (310) | (795) | (3,247) |
Deferred tax, net and other long-term liabilities | 1,491 | (6,745) | (108,844) |
Net cash provided by operating activities | 291,320 | 312,897 | 355,635 |
CASH FLOWS - INVESTING ACTIVITIES | |||
Investments in property and equipment | (191,396) | (210,192) | (187,676) |
Proceeds related to sale and disposal of property and equipment | 19,230 | 40,451 | 20,038 |
Investment grants received | 2,921 | ||
Investments in other assets | (413) | (14,536) | |
Deposits and marketable securities, net | (132,515) | (143,940) | (80,643) |
Net cash used in investing activities | (305,094) | (328,217) | (245,360) |
CASH FLOWS - FINANCING ACTIVITIES | |||
Exercise of warrants and options, net | 1,842 | 714 | 31,315 |
Proceeds from loans | 98,990 | ||
Loans repayment | (142,285) | (43,259) | |
Principal payments on account of capital lease obligation | (19,402) | (5,554) | (781) |
Debentures repayment | (6,215) | ||
Dividend paid to Panasonic | (4,378) | ||
Net cash used in financing activities | (17,560) | (48,135) | (23,318) |
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGE | 1,804 | 2,585 | 3,720 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (29,530) | (60,870) | 90,677 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 385,091 | 445,961 | 355,284 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 355,561 | 385,091 | 445,961 |
NON-CASH ACTIVITIES: | |||
Investments in property and equipment | 39,184 | 28,052 | 28,419 |
Conversion of notes into share capital | 22,600 | 58,586 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Cash received during the period from interest | 14,436 | 8,818 | 3,870 |
Cash paid during the period for interest | 7,456 | 11,835 | 14,068 |
Cash paid during the period for income taxes, net | $ 13,026 | $ 5,768 | $ 17,668 |
DESCRIPTION OF BUSINESS AND GEN
DESCRIPTION OF BUSINESS AND GENERAL | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND GENERAL | NOTE 1 - DESCRIPTION OF BUSINESS AND GENERAL The consolidated financial statements of Tower Semiconductor Ltd. (“Tower”) include the financial statements of Tower, and (i) its wholly-owned subsidiary Tower US Holdings Inc., the sole owner of: (1) Jazz US Holdings Inc. and its wholly-owned subsidiary, Jazz Semiconductor, Inc., an independent semiconductor foundry focused on specialty process technologies for the manufacture of analog intensive mixed-signal semiconductor devices (Jazz US Holdings Inc. and Jazz Semiconductor, Inc. collectively referred to herein as “Jazz”); and (2) TowerJazz Texas Inc. (“TJT”); and (ii) its 51% owned subsidiary, TowerJazz Panasonic Semiconductor Co., Ltd. (“TPSCo”), an independent semiconductor foundry which includes three semiconductor manufacturing facilities located in Tonami, Uozu and Arai, in Hokuriku Japan. TPSCo’s other 49% shares are held by Panasonic Semiconductor Solution Co., Ltd (“PSCS”), a fully owned subsidiary of Panasonic Corporation as of December 31, 2019. On November 28, 2019, Panasonic Corportaion announced it will sell PSCS to Nuvoton Technology Corporation, a Taiwan-based semiconductor company, which is an affiliate of Winbond Electronics Corporation, in a transaction that is targeted by Panasonic to close on June 2020 Tower and its subsidiaries are collectively referred to as the “Company”. The Company is a global specialty foundry leader manufacturing integrated circuits, offering a broad range of customizable process technologies including: SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, integrated power management and MEMS. The Company also provides a world-class design enablement platform for a quick and accurate design cycle, as well as Transfer Optimization and development Process Services (“TOPS”) to integrated device manufacturers (“IDMs”) and fabless companies that require capacity. To provide multi-fab sourcing and expanded capacity for its customers, the Company operates two manufacturing facilities in Israel (150mm and 200mm), two in the U.S. (200mm) and three in Japan through TPSCo (two 200mm and one 300mm), which provide 45nm CMOS, 65nm RF CMOS and 65nm advanced image sensor technologies. Tower’s ordinary shares are traded on the NASDAQ Global Select Market and on the Tel-Aviv Stock Exchange (“TASE”) under the symbol TSEM. The Company’s consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“US GAAP”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Use of Estimates in Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, affect the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. F - 9 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. Principles of Consolidation The Company’s consolidated financial statements include the financial statements of Tower and its subsidiaries. The Company’s consolidated financial statements are presented after elimination of inter-company transactions and balances. C. Cash and Cash Equivalents Cash and cash equivalents consist of cash, bank deposits and short-term investments with original maturities of three months or less. D. Short-Term Interest-Bearing Deposits Short-term deposits include bank deposits with original maturities greater than three months and less than one year. Such deposits presented at cost, including accrued interest, which approximates their fair value. E. Marketable securities The Company accounts for investments in debt securities in accordance with ASC 320 “Investments - Debt and Equity Securities” Marketable securities classified as "available-for-sale" are carried at fair value, based on quoted market prices. Unrealized gains and losses are reported in a separate component of shareholders' equity in accumulated other comprehensive income (“OCI”). Gains and losses are recognized when realized, on a specific identification basis, in the Company's consolidated statements of income. The Company's securities are reviewed for impairment in accordance with ASC 320-10-35. If such assets are considered to be impaired, the impairment charge is recognized in earnings when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company's intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities with an unrealized loss that the Company intends to sell, or it is more likely than not that the Company will be required to sell before recovery of their amortized cost basis, the entire difference between amortized cost and fair value is recognized in earnings. For securities that do not meet these criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while declines in fair value related to other factors are recognized in OCI. F - 10 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) E. Marketable securities (Cont.) If quoted prices for identical instruments are available in an active market, marketable securities are classified within Level 1 of the fair value hierarchy. If quoted prices for identical instruments in active markets are not available, fair values are estimated using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy. F. Trade Accounts Receivables - Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts, based on specific analysis of the account receivable’s aging, assessment of its related risk and ability of the customer to make the required payment.. As of December 31, 2019 and 2018, the allowance for doubtful accounts was $10,925 and $4,208, respectively, of which $10,000 and $3,000, respectively, relates to a customer located in the Far East region. G. Accounts Receivable Factoring From time to time, the Company uses non-recourse factoring arrangements, to sell accounts receivable to third-party financial institutions. The sale of the receivables in these arrangements are accounted for as a true sale, under ASC 860. H. Inventories Inventories are stated at the lower of aggregate cost or net realizable value. If inventory costs exceed expected net realizable value, the Company records reserves for the difference between the cost and the expected net realizable value. Cost of raw materials is determined mainly on the basis of the weighted average moving price per unit. I. Investments in Privately-Held Companies Long-term investments include equity investments in privately-held companies without readily determinable fair values. In accordance with ASC 321 - “Investments - Equity Securities” J. Property and Equipment The Company accounts for property and equipment in accordance with Accounting Standards Codification ASC 360 “Accounting for the Property, Plant and Equipment” F - 11 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) J. Property and Equipment (cont.) Maintenance and repairs are charged to expenses as incurred. Property and equipment are presented net of investment grants received, and less accumulated depreciation. Depreciation is calculated based on the straight-line method over the Company’s estimated useful lives of the assets, as follows: Buildings and building improvements, including facility infrastructure 10-25 years Machinery and equipment, software and hardware 3-15 years Impairment charges, if needed, are determined based on the policy outlined in L below. Property and equipment includes also assets under capital leases and are depreciated according to their applicable useful life. K. Intangible Assets and Goodwill The Company accounts for intangible assets and goodwill in accordance with ASC 350 “Intangibles-Goodwill and Other”. Intangible assets include the values assigned to the intangible assets as part of the purchase price allocation made at the time of acquisition. Intangible assets are amortized over the expected estimated economic life of the intangible assets commonly used in the industry. Goodwill is not amortized and subject to impairment test. Impairment charges on intangibles or goodwill, if needed, are determined based on the policy outlined in L below. L. Impairment of Assets Impairment of Property, Equipment and Intangible Assets The Company reviews long-lived assets and intangible assets on a periodic basis, as well as when such review is required based upon relevant circumstances, to determine whether events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, considering the undiscounted cash flows expected from it. If applicable, the Company recognizes an impairment loss based upon the difference between the carrying amount and the fair value of such assets, in accordance with ASC 360-10 “Property, Plant and Equipment”. Impairment of Goodwill The Company tests goodwill for impairment by performing a qualitative assessment process, or using a two-step quantitative assessment process. If the Company chooses to perform a qualitative assessment process and determines it is more likely than not (that is, a likelihood of more than 50 percent) that the carrying value of the net assets is more than the fair value of the reporting unit, the two-step quantitative assessment process is then performed; otherwise, no further testing is required. The Company may elect not to perform the qualitative assessment process and, instead, proceed directly to the two-step quantitative assessment process. F - 12 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) L. Impairment of Assets (cont.) Impairment of Goodwill (Cont.) The first step identifies potential impairment by comparing the fair value of a reporting unit with its carrying amount, including the goodwill. The fair value of the reporting units is determined using a discounted cash flow analysis (income approach). This fair value approach requires significant management judgment and estimations. The determination of fair value using a discounted cash flow analysis requires the use of key judgments, estimates and assumptions including revenue growth rates, projected operating margins, changes in working capital, terminal values, and discount rates. If the fair value exceeds the carrying amount of a reporting unit, goodwill is not considered impaired and the second step of the test is unnecessary. If the carrying amount exceeds the fair value of a reporting unit, the second step measures the impairment loss, if any. The second step compares the implied fair value of goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The implied fair value of the reporting unit’s goodwill is calculated by creating a hypothetical balance sheet as if the reporting unit had just been acquired. This balance sheet contains all assets and liabilities recorded at fair value (including any intangible assets that may not have any corresponding carrying value in the balance sheet). The implied value of the reporting unit’s goodwill is calculated by subtracting the fair value of the net assets from the fair value of the reporting unit. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. M. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method. Results for the reporting period beginning January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with historical accounting under ASC 840, “Leases” F - 13 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) M. Leases (cont.) For all leases that commenced before the effective date of ASC 842, the permitted “practical expedients” as stipulated in the ASC was elected and accordingly, the Company did not reassess: (1) whether any expired or existing contracts contain leases; (2) the lease classification for any expired or existing leases; and (3) initial direct costs for any existing leases. The determination if an arrangement is a lease is to be made at inception of a lease contract. ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Whenever leases do not provide an implicit interest rate, incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Certain lease agreements require payments for lease and non-lease components and the Company elected to account for these as a single lease component related to other operating facilities. For additional information, please see Notes 11D and 11E. N. Revenue Recognition ASC Topic 606 “Revenue from Contracts with Customers” “Revenue Recognition” Under the modified retrospective method, prior period financial positions and results are not adjusted. There was no transition adjustment to the company’s retained earnings upon adoption. The Company’s revenues are generated principally from sales of semiconductor wafers. The Company, to a much lesser extent, also derives revenues from design support and other technical and support services incidental to the sale of semiconductor wafers. The vast majority of the Company’s sales are achieved through the effort of its direct sales force. Wafer sales are recognized at a point in time, which is upon shipment or upon delivery of the Company’s products to unaffiliated customers, depending on shipping terms. Accordingly, control of the products transfers to the customer in accordance with the transaction's shipping terms. Sales revenue is recognized for the amount of consideration that the Company expects to be entitled to in exchange for its products. Taxes imposed by governmental authorities, such as sales taxes or value-added taxes, are excluded from net sales. The Company’s contracts typically contain a single performance obligation that is fulfilled on the date of delivery based on shipping terms stipulated in the contract. F - 14 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. Revenue Recognition (cont.) The Company provides for sales returns allowance relating to specified yield or quality commitments as a reduction of revenues, based on past experience and specific identification of events necessitating an allowance, which has been in immaterial amounts. The Company provides its customers with other services that are less significant in scope and amount and for which recognition is over time when customer receives the services. O. Research and Development Research and development costs are charged to operations as incurred. Amounts received or receivable from the government of Israel and others, as participation in research and development programs, are offset against research and development costs. The accrual for grants receivable is determined based on the terms of the programs, provided that the criteria for entitlement have been met. P. Income Taxes The Company accounts for income taxes using an asset and liability approach as prescribed in ASC 740-10 “Income Taxes” The Company evaluates the potential realization of its deferred tax assets for each jurisdiction in which the Company operates at each reporting date and establishes valuation allowances when it is more likely than not that all or a part of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the same character and in the same jurisdiction. The Company considers all available positive and negative evidence in making this assessment, including, but not limited to, the scheduled reversal of deferred tax liabilities and projected future taxable income. In circumstances where there is sufficient negative evidence indicating that the Company's deferred tax assets are not more-likely-than-not realizable, the Company establishes a valuation allowance, see Note 19. F - 15 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) P. Income Taxes (cont.) ASC 740-10 prescribes a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate tax positions taken or expected to be taken in a tax return by assessing whether they are more-likely-than-not sustainable, based solely on their technical merits, upon examination and including resolution of any related appeals or litigation process. The second step is to measure the associated tax benefit of each position as the largest amount that the Company believes is more-likely-than-not realizable. Differences between the amount of tax benefits taken or expected to be taken in its income tax returns and the amount of tax benefits recognized in its financial statements, represent the Company's unrecognized income tax benefits. The Company's policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense. Q. Earnings per Ordinary Share Basic earnings per share are calculated in accordance with ASC 260, “Earnings Per Share” R. Comprehensive Income In accordance with ASC 220 “Comprehensive Income” S. Functional Currency and Exchange Rate Income (Loss) The currency of the primary economic environment in which Tower, TJT and Jazz conduct their operations is the U.S. Dollar (“dollar”). Thus, the dollar is their functional and reporting currency. Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with ASC 830-10 “ Foreign Currency Matters The statements of operations of TPSCo has been translated using the average exchange rate for the reported period. The resulting translation adjustments are charged or credited to OCI. F - 16 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) T. Stock-Based Compensation The Company applies the provisions of ASC Topic 718 “ Compensation - Stock Compensation Accordingly, stock-based compensation granted to employees and directors is measured at the grant date, based on the fair value of the grant. The compensation costs are recognized using the graded vesting attribution method based on the vesting terms of each unit included in the award resulting in an accelerated recognition of compensation costs. U. Fair value of Financial Instruments and Fair Value Measurements ASC 820, "Fair Value Measurements and Disclosures" ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company's financial instruments of cash, bank deposits, marketable securities, account receivable and payables, accrued liabilities, loans and leases approximate their current fair values because of their nature and respective maturity dates or durations. The Company had no financial assets or liabilities carried and measured on a non-recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. F - 17 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) V. Derivatives and hedging Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, the gains (losses) are recognized in earnings in the periods of change together with the offsetting losses (gains) on the hedged items attributed to the risk being hedged. For derivative instruments designated as cash flow hedges, the effective portion of the gains (losses) on the derivatives is initially reported as a component of OCI and is subsequently recognized in earnings when the hedged exposure is recognized in earnings. Gains (losses) on derivatives are recognized in earnings, representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness. For derivative instruments that are not designated as hedges, gains (losses) from changes in fair values are primarily recognized in the same line of the item economically hedged. W. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, " Income Taxes - Simplifying the Accounting for Income Taxes In August 2018, the FASB issued ASU No. 2018-13 “ Fair Value Measurement In June 2018, the FASB issued ASU No. 2018-07 “ Compensation - Stock Compensation F - 18 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) W. Recently Issued Accounting Pronouncements (Cont.) In January 2017, the FASB issued ASU 2017-04 “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment” In June 2016, the FASB issued ASU 2016-13 “Financial Instruments Credit Losses” |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 - INVENTORIES Inventories consist of the following: As of December 31, 2019 2018 Raw materials $ 90,605 $ 72,144 Work in process 91,537 92,047 Finished goods 10,114 6,587 $ 192,256 $ 170,778 Work in process and finished goods are presented net of aggregate write-downs to net realizable value of $649 and $1,206 as of December 31, 2019 and 2018, respectively. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
OTHER CURRENT ASSETS | NOTE 4 - OTHER CURRENT ASSETS Other current assets consist of the following: As of December 31, 2019 2018 Tax receivables $ 8,156 $ 3,997 Prepaid expenses 8,265 14,170 Accrued interest on bank deposits and other receivables 5,598 4,585 $ 22,019 $ 22,752 |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
LONG-TERM INVESTMENTS | NOTE 5 - LONG-TERM INVESTMENTS Long-term investments consist of the following: As of December 31, 2019 2018 Severance-pay funds $ 11,860 $ 13,615 Long-term bank deposit 12,500 12,500 Investments in privately- held companies 15,725 9,830 $ 40,085 $ 35,945 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 6 - PROPERTY AND EQUIPMENT, NET Composition: As of December 31, 2019 2018 Original cost: Land and Buildings (including facility infrastructure) $ 363,133 $ 347,798 Machinery and equipment (*) 2,684,980 2,482,609 $ 3,048,113 $ 2,830,407 Accumulated depreciation: Buildings (including facility infrastructure) $ (239,241 ) $ (224,796 ) Machinery and equipment (2,126,933 ) (1,948,377 ) $ (2,366,174 ) $ (2,173,173 ) $ 681,939 $ 657,234 (*) Original cost of machinery and equipment includes ROU assets under capital lease in the amount of $86,087 and $54,873 as of December 31, 2019 and 2018, respectively. The depreciation expense of such assets amounted to $9,941 and $2,102 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the original cost of land, buildings, machinery and equipment was reflected net of investment grants in the aggregate amount of $285,615 and $285,636, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 7 - INTANGIBLE ASSETS, NET Intangible assets consist of the following as of December 31, 2019: Useful Life (years) Cost Accumulated Amortization Net Technologies 4;5;9 $ 111,108 $ (110,730 ) $ 378 Facilities lease 19 33,500 (24,241 ) 9,259 Trade name 9 7,702 (7,702 ) -- Customer relationships 15 2,600 (1,956 ) 644 Total identifiable intangible assets $ 154,910 $ (144,629 ) $ 10,281 Intangible assets consist of the following as of December 31, 2018: Useful Life (years) Cost Accumulated Amortization Net Technologies 4;5;9 $ 110,835 $ (108,888 ) $ 1,947 Facilities lease 19 33,500 (22,953 ) 10,547 Trade name 9 7,671 (7,547 ) 124 Customer relationships 15 2,600 (1,783 ) 817 Total identifiable intangible assets $ 154,606 $ (141,171 ) $ 13,435 |
DEFERRED TAX AND OTHER LONG-TER
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET | NOTE 8 - DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET Deferred tax and other long-term assets, net consist of the following: As of December 31, 2019 2018 Deferred tax asset (see Note 19) $ 66,362 $ 73,460 Right of use - assets under operating leases 17,828 -- Prepaid long-term land lease, net 3,175 3,296 Fair value of cross currency interest rate swap (see Note 12D) 12,625 6,722 Long-term prepaid expenses and others 5,057 4,926 $ 105,047 $ 88,404 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities, Current [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 9 - OTHER CURRENT LIABILITIES Other current liabilities consist of the following: As of December 31, 2019 2018 Tax payables $ 282 $ 12,096 Interest payable 1,057 986 Others 5,962 4,035 $ 7,301 $ 17,117 |
DEBENTURES
DEBENTURES | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable [Abstract] | |
DEBENTURES | NOTE 10 - DEBENTURES A. Composition by Repayment Schedule: As of December 31, 2019 Interest rate 2020 2021 2022 2023 Total Debentures Series G (see B below) 2.79 % $ 38,690 $ 38,690 $ 38,690 $ 19,347 $ 135,417 Accretion of carrying amount to principal amount (3,134 ) Carrying amount $ 132,283 As of December 31, 2018 Interest rate 2019 2020 2021 2022 2023 Total Debentures Series G (see B below) 2.79 % $ -- $ 35,676 $ 35,676 $ 35,676 $ 17,839 $ 124,867 Accretion of carrying amount to principal amount (4,697 ) Carrying amount $ 120,170 B. Debentures Series G In June 2016, Tower raised approximately $115,000 through the issuance of long-term unsecured non-convertible debentures (“Series G Debentures”). The Series G Debentures are payable in seven semi-annual consecutive equal installments from March 2020 to March 2023 and carrying an annual interest rate of 2.79%, payable semi-annually. The principal and interest amounts are denominated in NIS and are not linked to any index or to any other currency. The Company entered into hedging transactions to mitigate the foreign exchange rate differences on the principal and interest using a cross currency swap. As of December 31, 2019 and 2018, the outstanding principal amount of Series G Debentures was NIS 468,000 (approximately $135,000 and $125,000 as of December 31, 2019 and December 31, 2018, respectively), with related hedging transactions net asset fair value of approximately $16,000 and $5,000, respectively. The changes in the fair value of outstanding principal amount of the debentures and in the fair value of the hedging transaction, are attributed to the corresponding changes in the exchange rates during the reported periods (see Note 12D). The Series G Debentures’ indenture includes customary financial and other terms and conditions, including a negative pledge and financial covenants. As of December 31, 2019, the Company was in compliance with all of the financial covenants under the indenture. |
OTHER LONG-TERM DEBT
OTHER LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2019 | |
Loans Payable [Abstract] | |
OTHER LONG-TERM DEBT | NOTE 11 - OTHER LONG-TERM DEBT A. Composition: As of December 31, 2019 2018 Long-term JPY bank loan - principal amount, see B and C below $ 101,365 $ 100,118 Capital leases - see D below 60,277 47,195 Operating leases – see E below 17,828 -- Less - current maturities of long-term debt (28,201 ) (10,814 ) $ 151,269 $ 136,499 B. Composition by Repayment Schedule of Loans: As of December 31, 2019 Interest rate 2020 2021 2022 2023 2024 and on Total In JPY 1.95 % $ -- $ 22,526 $ 22,526 $ 22,526 $ 33,787 $ 101,365 Total outstanding principal $ -- $ 22,526 $ 22,526 $ 22,526 $ 33,787 $ 101,365 As of December 31, 2018 Interest rate 2019 2020 2021 2022 2023 and on Total In JPY 1.95 % $ -- $ -- $ 22,248 $ 22,248 $ 55,622 $ 100,118 Total outstanding principal $ -- $ -- $ 22,248 $ 22,248 $ 55,622 $ 100,118 C. Loans to TPSCo from Financial Institutions In June 2018, TPSCo refinanced its two then outstanding loans with 11 Billion JPY (approximately $100,000) new asset-based loan agreements with a consortia of financial institutes comprised of JA Mitsui Leasing, Ltd., Sumitomo Mitsui Trust Bank, Limited (SMTB), Sumitomo Mitsui Banking Corporation (SMBC) and China trust Commercial Bank Corporation (CTBC) (“JP Loan”). The JP Loan carries a fixed interest rate of 1.95% per annum with principal payable in nine semiannual payments from 2021 and until 2025. The JP Loan is secured mainly by a lien over the machinery and equipment of TPSCo located in Uozu and Tonami manufacturing facilities. Outstanding principal amount was approximately $101,000 as of December 31, 2019. The JP Loan also contains certain financial ratios and covenants, as well as customary definitions of events of default and acceleration of the repayment schedule. TPSCo’s obligations pursuant to the JP Loan are not guaranteed by Tower, Panasonic Corporation, PSCS, or any of its affiliates. F - 23 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 11 - OTHER LONG-TERM DEBT (Cont.) C. Loans to TPSCo from Japanese Financial Institutions (Cont.) As of December 31, 2019, TPSCo was in compliance with all of the financial ratios and covenants under this JP Loan. D. Capital Lease Agreements Certain of the Company’s subsidiaries enter, from time to time, into capital lease agreements for certain machinery and equipment it operates in some of its fabrication facilities, usually for a period of four years, with an option to buy the machinery and equipment after a period of between three As of December 31, 2019 and 2018, the outstanding capital lease liabilities for fixed assets was $60,277 and $47,195, respectively, of which $21,070 and $10,814 respectively, were included under current maturities of long-term debt. The following presents the maturity of capital lease liabilities as of December 31, 2019: Fiscal Year 2020 $ 21,070 2021 16,332 2022 14,386 2023 7,684 2024 805 Total $ 60,277 F - 24 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 11 - OTHER LONG-TERM DEBT (Cont.) E. Operating Leases In 2019, the Company adopted ASU No. 2016-02, " Leases" (Topic 842). The Company enters from time to time into operating leases for office space, operating facilities and vehicles. Operating lease cost for the years ended December 31, 2019, 2018 and 2017 was $8,045, $8,773 and $8,809, respectively. During 2019, cash paid for operating lease liabilities was $8,113. The following presents the composition of operating lease: Classification in Consolidated Balance Sheets December 31, 2019 Right of use - assets under operating leases Deferred tax and other long-term assets, net $ 17,828 Lease liabilities: Current operating leases liabilities Current maturities of long-term debt $ 7,131 Long-term operating lease liabilities Other long-term debt 10,697 Total operating lease liabilities $ 17,828 Weighted average remaining lease term (years) 4.9 Weighted average discount rate 1.95 % The following presents the maturity of operating lease liabilities as of December 31, 2019: Fiscal Year 2020 $ 7,131 2021 6,304 2022 2,064 2023 645 2024 645 Thereafter 1,667 Total 18,456 Less – imputed interest (628 ) Total $ 17,828 F - 25 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 11 - OTHER LONG-TERM DEBT (Cont.) F. Wells Fargo Credit Line In December 2013, Jazz entered into an agreement with Wells Fargo Capital Finance, part of Wells Fargo & Company (“Wells Fargo”), for a five-year secured asset-based revolving credit line in the total amount of up to $70,000, maturing in December 2018 In February 2018, Jazz and Wells Fargo signed an amendment to the credit line, under which the line is extended by five years, to mature in 2023, and the total amount remained at up to $70,000 (the “Jazz Credit Line Agreement”). The applicable interest on the loans is at a rate equal to, at lender’s option, either the lender’s prime rate plus a margin ranging from 0.0% to 0.5% or the LIBOR rate plus a margin ranging from 1.25% to 1.75% per annum. The outstanding borrowing availability varies from time to time based on the levels of Jazz’s eligible accounts receivable, eligible equipment, eligible inventories and other terms and conditions described in the Jazz Credit Line Agreement. The obligations of Jazz under the Jazz Credit Line Agreement are secured by a security interest on all the assets of Jazz. The Jazz Credit Line Agreement contains customary covenants and other terms, including customary events of default. If any event of default will occur, Wells Fargo may declare all borrowings under the facility due immediately and foreclose on the collateral. Jazz’s obligations pursuant to the Jazz Credit Line Agreement are not guaranteed by Tower or any of its affiliates. As of December 31, 2019, Jazz was in compliance with all of the covenants under the Jazz Credit Line Agreement. As of December 31, 2019, borrowing availability under the Jazz Credit Line Agreement was approximately $70,000, of which approximately $1,000 was utilized through letters of credit. As of December 31, 2019 and 2018, no loan amounts were outstanding under the Jazz Credit Line Agreement. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS The Company makes certain disclosures as detailed below with regard to financial instruments, including derivatives. These disclosures include, among other matters, the nature and terms of derivative transactions, information about significant concentrations of credit risk and the fair value of financial assets and liabilities. A. Non-Designated Exchange Rate Transactions As the functional currency of Tower is the USD and part of Tower's expenses are denominated in NIS, Tower enters from time to time into exchange rate agreements to protect against the volatility of future cash flows caused by changes in foreign exchange rates on NIS denominated expenses. F - 26 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cont.) A. Non-Designated Exchange Rate Transactions (Cont.) As of December 31, 2019, the fair value amounts of such exchange rate agreements were $167 in an asset position, presented in other current assets with a face value of $48,000. As of December 31, 2018, the fair value amounts of such exchange rate agreements were $379 in a liability position, presented in current liabilities with a face value of $92,000. Changes in the fair values of such derivatives are presented in cost of revenues in the statements of operations. As the functional currency of TPSCo is the JPY and part of TPSCo revenues are denominated in USD, TPSCo enters from time to time into exchange rate agreements to protect against the volatility of future cash flows caused by changes in foreign exchange rates on USD denominated amounts. As of December 31, 2019 and 2018, the fair value amounts of such exchange rate agreements were $318 and $16, respectively, in a liability position, presented in other current liabilities with a face value of $36,000 and $42,000, respectively. Changes in the fair value of such derivatives are presented in the statements of operations. B. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, bank deposits, marketable securities, derivative, trade receivables and government and other receivables. The Company's cash, deposits, marketable securities and derivative are maintained with large and reputable banks and investment banks. The composition and maturities of investments are regularly monitored by the Company. Generally, these securities may be redeemed upon demand and bear minimal risk. The Company generally does not require collateral for insurance of receivables; however, in certain circumstances, the Company obtains credit insurance or may require advance payments. An allowance for doubtful accounts is determined with respect to those amounts the collection of which is determined to be doubtful. The Company performs ongoing credit evaluations of its customers. C. Fair Value of Financial Instruments The estimated fair values of the Company’s financial instruments, excluding debentures do not materially differ from their respective carrying amounts as of December 31, 2019 and 2018. The fair value of debentures, based on quoted market prices as of December 31, 2019 and 2018, was approximately $140,000 and $127,000, respectively, compared to carrying amounts of approximately $132,000 and $120,000, for the above dates, respectively. F - 27 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cont.) D. Cash Flow Hedge Gains (Losses) The Company entered into cash flow hedging transactions to mitigate the foreign exchange rate differences on principal and interest using a cross currency swap to mitigate the risk arising from Series G Debentures denomination in NIS. As of December 31, 2019, the fair value of the swap was $15,642 in an asset, net position, of which $3,017 was presented in other current assets and $12,625 was presented in long-term assets. As of December 31, 2018, the fair value of the swap was $4,951 in an asset, net position, of which $1,771 was presented in other current liabilities and $6,722 was presented in long-term assets. As of December 31, 2019 and December 31, 2018, the effective portions of $1,504 and $1,329, respectively, were recorded in OCI, of which a loss of $719 is expected to be reclassified into earnings during the twelve months ending December 31, 2020. For the years ended December 31, 2019 and December 31, 2018, the hedging effect on the Company’s results of operations was $8,816 income and $11,787 loss, respectively, and was recognized as financing expense, net, to offset the effect of the rate difference related to Series G Debentures. E. Fair Value Measurements Valuation Techniques In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to the Company’s Level 1 assets and liabilities. If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology applies to the Company’s Level 2 and Level 3 assets and liabilities. Level 1 Measurements Assets held for sale - securities classified as available for sale are reported at fair value on a recurring basis. These securities are classified as Level 1 of the valuation hierarchy where quoted market prices from reputable third-party brokers are available in an active market. Changes in fair value of securities available for sale are recorded in other comprehensive income. Level 2 Measurements If quoted market prices are not available, the Company obtains fair value measurements from an independent pricing service. These securities are reported using Level 2 inputs and the fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, U.S. government and agency yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information, and the security’s terms and conditions, among other factors. F - 28 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cont.) E. Fair Value Measurements (Cont.) Level 3 Measurements For cross currency swap measured under level 2 - the Company uses the market approach using quotations from banks and other public information. Equity Securities without Readily Determinable Fair Values - Investments in privately-held companies are measured using the measurement alternatives, see Note 2I above. The Company reviews these investments for impairment and observable price changes on a quarterly basis, and adjusts the carrying value accordingly. For the year ended December 31, 2019, the Company recorded an increase of $5,270 in the value of such investments, and for the year ended December 31, 2018, the Company recorded a decrease of $5,000 in the value of such investments, presented in other income (expense), net in the statements of operations. The fair value of these investments represents a Level 3 valuation as the assumptions used in valuing these investments are not directly or indirectly observable. Recurring fair value measurements using the indicated inputs: December 31, 2019 Quoted prices in active market for identical liability (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cross currency swap - net asset position $ 15,642 $ -- $ 15,642 $ -- Privately-held companies 15,725 -- 15,725 Marketable securities held for sale 175,305 175,305 -- -- Foreign exchange forward and cylinders - liability position (151 ) -- (151 ) -- $ 206,521 $ 175,305 $ 15,491 $ 15,725 December 31, 2018 Quoted prices in active market for identical liability (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cross currency swap - net asset position $ 4,951 $ -- $ 4,951 $ -- Privately-held companies 9,830 -- 9,830 Marketable securities held for sale 135,227 135,227 -- -- Foreign exchange forward and cylinders - liability position (395 ) -- (395 ) -- $ 149,613 $ 135,227 $ 4,556 $ 9,830 F - 29 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cont.) F. Short-Term and Long-Term Deposits and Marketable Securities Short-term and long-term deposits and marketable securities as of December 31, 2019 included short term deposits in the amount of $215,609, marketable securities in the amount of $176,070 and a long-term bank deposit in the amount of $12,500; as of December 31, 2018, short-term and long-term deposits and marketable securities included short term deposits in the amount of $120,079, marketable securities in the amount of $135,850 and a long-term bank deposit in the amount of $12,500. The following table summarizes amortized costs, gross unrealized gains and losses and estimated fair values of available-for-sale marketable securities as of December 31, 2019: Amortized cost (*) Gross unrealized Gains Gross Unrealized losses Estimated fair value Corporate bonds $ 154,167 $ 1,273 $ (214 ) $ 155,226 U.S government bonds 1,977 26 -- 2,003 Non-U.S government bonds 992 11 -- 1,003 Municipal bonds 1,208 21 -- 1,229 Money market fund 15,225 366 -- 15,591 Certificate of deposits 248 5 -- 253 $ 173,817 $ 1,702 $ (214 ) $ 175,305 * Excluding accrued interest of $765. The scheduled maturities of available-for-sale marketable securities as of December 31, 2019, were as follows: Amortized cost Estimated fair value Due within one year $ 37,845 $ 37,818 Due after one year through five years 135,972 137,487 $ 173,817 $ 175,305 F - 30 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cont.) F. Short-Term and Long-Term Deposits and Marketable Securities (Cont.) The following table summarizes amortized costs, gross unrealized gains and losses and estimated fair values of available-for-sale marketable securities as of December 31, 2018: Amortized cost (*) Gross unrealized gains Gross Unrealized losses Estimated fair value Corporate bonds $ 111,639 $ 29 $ (2,029 ) $ 109,639 U.S government bonds 5,444 21 -- 5,465 Non-U.S government bonds 2,456 -- (33 ) 2,423 Municipal bonds 2,248 -- (13 ) 2,235 Money market fund 15,225 -- -- 15,225 Certificate of deposits 248 -- (8 ) 240 $ 137,260 $ 50 $ (2,083 ) $ 135,227 * Excluding accrued interest of $623. The scheduled maturities of available-for-sale marketable securities as of December 31, 2018, were as follows: Amortized cost Estimated fair value Due within one year $ 16,686 $ 16,661 Due after one year through five years 120,574 118,566 $ 137,260 $ 135,227 Investments with continuous unrealized losses for less than twelve months and twelve months or more and their related fair values as of December 31, 2019 and December 31, 2018, were as indicated in the following tables: December 31, 2019 Investment with continuous unrealized losses for less than twelve months Investments with continuous unrealized losses for twelve months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate bonds $ 8,562 $ (56 ) $ 23,022 $ (158 ) $ 31,584 $ (214 ) Non-U.S government bonds -- -- -- -- -- -- Municipal bonds -- -- -- -- -- -- Certificate of deposits -- -- -- -- -- -- Total $ 8,562 $ (56 ) $ 23,022 $ (158 ) $ 31,584 $ (214 ) F - 31 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cont.) F. Short-Term and Long-Term Deposits and Marketable Securities (Cont.) December 31, 2018 Investment with continuous unrealized losses for less than twelve months Investments with continuous unrealized losses for twelve months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate bonds $ 19,716 $ (140 ) $ 79,609 $ (1,889 ) $ 99,325 $ (2,029 ) Non-U.S government bonds 963 -- 1,460 (33 ) 2,423 (33 ) Municipal bonds 2,235 (13 ) -- -- 2,235 (13 ) Certificate of deposits -- -- 240 (8 ) 240 (8 ) Total $ 22,914 $ (153 ) $ 81,309 $ (1,930 ) $ 104,223 $ (2,083 ) |
EMPLOYEE RELATED LIABILITIES
EMPLOYEE RELATED LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Postemployment Benefits [Abstract] | |
EMPLOYEE RELATED LIABILITIES | NOTE 13 - EMPLOYEE RELATED LIABILITIES A. Employee Termination Benefits Israeli law, labor agreements and corporate policy determine the obligations of Tower to make severance payments to dismissed Israeli employees and to Israeli employees leaving employment under certain circumstances. Generally, the liability for severance pay benefits, as determined by Israeli law, is based upon length of service and the employee’s monthly salary. This liability is primarily covered by regular deposits made each month by Tower into recognized severance and pension funds and by insurance policies maintained by Tower, based on the employee’s salary for the relevant month. The amounts so funded and the liability are included on the balance sheets in long-term investments and employee related liabilities in the amounts of $9,314 and $11,638, respectively, as of December 31, 2019. Commencing January 1, 2005, Tower implemented a labor agreement with regard to most of its Israeli employees, according to which monthly deposits into recognized severance and pension funds or insurance policies will release it from any additional severance obligation in excess of the balance in such accounts to such Israeli employees and, therefore, Tower incurs no liability or asset with respect to such severance obligations and deposits, since that date. Any net severance amount as of such date will be released on the employee’s termination date. Payments relating to Israeli employee termination benefits were $5,597, $5,158 and $5,059 for 2019, 2018 and 2017, respectively. TPSCo established a Defined Contribution Retirement Plan (the “DC Plan”) for its employees through which TPSCo contributes approximately 9% with employee average match of 1% from employee base salary to the DC Plan. Such contribution releases the employer from further obligation to any payments upon termination of employment. The contribution is remitted either to third party benefit funds based on employee preference, or directly, to those employees who elected not to enroll in the DC Plan. Total payments under the DC Plan in 2019, 2018 and 2017 amounted to $6,572, $6,700 and $6,706, respectively. F - 32 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 13 - EMPLOYEE RELATED LIABILITIES (Cont.) B. Jazz Employee Benefit Plans The following information provides the changes in 2019, 2018 and 2017 periodic expenses and benefit obligations due to the bargaining agreement signed between Jazz with its collective bargaining unit employees. Post-Retirement Medical Plan The components of the net periodic benefit cost and other amounts recognized in other comprehensive income for post-retirement medical plan expense are as follows: Year ended December 31, 2019 2018 2017 Net periodic benefit cost: Service cost $ 7 $ 10 $ 9 Interest cost 72 73 69 Amortization of prior service costs -- -- -- Amortization of net loss (gain) (298 ) (262 ) (361 ) Total net periodic benefit cost (219 ) $ (179 ) $ (283 ) Other changes in plan assets and benefits obligations recognized in other comprehensive income: Prior service cost for the period $ -- $ -- $ -- Net loss (gain) for the period (1 ) (376 ) 317 Amortization of prior service costs -- -- -- Amortization of net gain (loss) 298 262 361 Total recognized in other comprehensive income (loss) $ 297 $ (114 ) $ 678 Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 78 $ (293 ) $ 395 Weighted average assumptions used: Discount rate 4.50 % 3.80 % 4.50 % Expected return on plan assets N/A N/A N/A Rate of compensation increases N/A N/A N/A Assumed health care cost trend rates: Health care cost trend rate assumed for current year (Pre-65/Post-65 Medicare Advantage) 6.90%/13.10 % 8.30%/11.10 % 7.20%/10.00 % Health care cost trend rate assumed for current year (Pre-65/Post-65 Non Medicare Advantage) 6.90%/7.90 % N/A N/A Ultimate rate (Pre-65/Post-65) 4.50%/4.50 % 4.50%/4.50 % 4.50%/4.50 % Year the ultimate rate is reached (Pre-65/Post-65) 2029/2029 2027/2027 2025/2025 Measurement date December 31, 2019 December 31, 2018 December 31, 2017 F - 33 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 13 - EMPLOYEE RELATED LIABILITIES (Cont.) B. Jazz Employee Benefit Plans (Cont.) Post-Retirement Medical Plan (Cont.) Impact of one-percentage point change in assumed health care cost trend rates as of December 31, 2019: Increase Decrease Effect on service cost and interest cost $ 2 $ (2 ) Effect on post-retirement benefit obligation $ 33 $ (25 ) The components of the change in benefit obligation, change in plan assets and funded status for post-retirement medical plan are as follows: Year ended December 31, 2019 2018 2017 Change in medical plan related benefit obligation: Medical plan related benefit obligation at beginning of period $ 1,628 $ 1,936 $ 1,550 Service cost 7 10 9 Interest cost 72 73 69 Benefits paid (17 ) (15 ) (9 ) Change in medical plan provisions -- -- -- Actuarial loss (gain) (1 ) (376 ) 317 Benefit medical plan related obligation end of period $ 1,689 $ 1,628 $ 1,936 Change in plan assets: Fair value of plan assets at beginning of period $ -- $ -- $ -- Employer contribution 16 15 9 Benefits paid (16 ) (15 ) (9 ) Fair value of plan assets at end of period $ -- $ -- $ -- Medical plan related net funding $ (1,689 ) $ (1,628 ) $ (1,936 ) F - 34 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 13 - EMPLOYEE RELATED LIABILITIES (Cont.) B. Jazz Employee Benefit Plans (Cont.) Post-Retirement Medical Plan (Cont.) As of December 31, 2019 2018 2017 Amounts recognized in statement of financial position: Current liabilities $ (50 ) $ (65 ) $ (58 ) Non-current liabilities (1,639 ) (1,563 ) (1,878 ) Net amount recognized $ (1,689 ) $ (1,628 ) $ (1,936 ) Weighted average assumptions used: Discount rate 3.40 % 4.50 % 3.80 % Rate of compensation increases N/A N/A N/A Assumed health care cost trend rates: Health care cost trend rate assumed for next year (pre 65/ post 65 Medicare Advantage) 6.20%/(5.00 )% 6.90%/13.10 % 8.30%/11.10 % Health care cost trend rate assumed for next year (pre 65/ post 65 Non Medicare Advantage) 6.20%/6.10 % 6.90%/7.90 % 8.30%/11.10 % Ultimate rate (pre 65/ post 65) 4.50%/4.50 % 4.50%/4.50 % 4.50%/4.50 % Year the ultimate rate is reached (pre 65/ post 65) 2029/2029 2029/2029 2027/2027 The following benefit payments are expected to be paid in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter: Fiscal Year Other Benefits 2020 $ 50 2021 54 2022 54 2023 55 2024 61 2025-2029 $ 365 Jazz Pension Plan Jazz has a pension plan that provides for monthly pension payments to eligible employees upon retirement. The pension benefits are based on years of service and specified benefit amounts. Jazz uses a December 31 measurement date. Jazz’s funding policy is to make contributions that satisfy at least the minimum required contribution for IRS qualified plans. F - 35 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 13 - EMPLOYEE RELATED LIABILITIES (Cont.) B. Jazz Employee Benefit Plans (Cont.) Jazz Pension Plan (Cont.) The components of the change in benefit obligation, the change in plan assets and funded status for Jazz’s pension plan are as follows: Year ended December 31, 2019 2018 2017 Net periodic benefit cost: Interest cost $ 817 $ 749 $ 831 Expected return on plan assets (930 ) (1,427 ) (1,236 ) Expected Administrative Expenses 100 -- -- Amortization of prior service costs 3 3 3 Amortization of net loss (gain) -- -- 55 Total net periodic benefit cost $ (10 ) $ (675 ) $ (347 ) Other changes in plan assets and benefits obligations recognized in other comprehensive income: Prior service cost for the period $ -- $ -- $ -- Net loss (gain) for the period 1,158 (231 ) (1,303 ) Amortization of prior service costs (3 ) (3 ) (3 ) Amortization of net gain (loss) -- -- (55 ) Total recognized in other comprehensive income (loss) $ 1,155 $ (234 ) $ (1,361 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 1,145 $ (909 ) $ (1,708 ) Weighted average assumptions used: Discount rate 4.40 % 3.70 % 4.30 % Expected return on plan assets 4.20 % 6.20 % 6.20 % Rate of compensation increases N/A N/A N/A Year ended December 31, 2019 2018 2017 Estimated amounts that will be amortized from accumulated other comprehensive income in the next fiscal year ending : Prior service cost $ 3 $ 3 $ 3 Net actuarial loss $ 27 $ -- $ -- F - 36 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 13 - EMPLOYEE RELATED LIABILITIES (Cont.) B. Jazz Employee Benefit Plans (Cont.) Jazz Pension Plan (Cont.) The components of the change in benefit obligation, change in plan assets and funded status for Jazz’s pension plan are as follows: Year ended December 31, 2019 2018 2017 Change in benefit obligation: Benefit obligation at beginning of period $ 18,979 $ 20,629 $ 19,672 Interest cost 817 749 831 Benefits paid (688 ) (607 ) (548 ) Change in plan provisions -- -- -- Actuarial loss (gain) 2,800 (1,792 ) 674 Benefit obligation end of period $ 21,908 $ 18,979 $ 20,629 Change in plan assets: Fair value of plan assets at beginning of period $ 22,669 $ 23,235 $ 19,871 Actual return on plan assets 2,544 (133 ) 3,212 Employer contribution -- 175 700 Expenses paid (71 ) -- -- Benefits paid (688 ) (607 ) (548 ) Fair value of plan assets at end of period $ 24,454 $ 22,670 $ 23,235 Funded status $ 2,546 $ 3,691 $ 2,606 Amounts recognized in statement of financial position: Non-current assets $ 2,546 $ 3,691 $ 2,606 Non-current liabilities -- -- -- Net amount recognized $ 2,546 $ 3,691 $ 2,606 Weighted average assumptions used: Discount rate 3.20% 4.40% 3.70% Rate of compensation increases N/A N/A N/A The following benefit payments are expected to be paid in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter: Fiscal Year Other Benefits 2020 $ 859 2021 932 2022 1,017 2023 1,085 2024 1,142 2025-2029 $ 6,144 F - 37 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 13 - EMPLOYEE RELATED LIABILITIES (Cont.) B. Jazz Employee Benefit Plans (Cont.) Jazz Pension Plan (Cont.) The plan’s assets measured at fair value on a recurring basis consisted of the following as of December 31, 2019: Level 1 Level 2 Level 3 Investments in mutual funds $ -- $ 24,454 $ -- Total plan assets at fair value $ -- $ 24,454 $ -- The plan’s assets measured at fair value on a recurring basis consisted of the following as of December 31, 2018: Level 1 Level 2 Level 3 Investments in mutual funds $ -- $ 22,670 $ -- Total plan assets at fair value $ -- $ 22,670 $ -- Jazz’s pension plan weighted average asset allocations on December 31, 2019, by asset category are as follows: Asset Category December 31, 2019 Target allocation 2020 Equity securities 23 % 20 % Debt securities 77 % 80 % Total 100 % 100 % Jazz’s primary policy goals regarding the plan’s assets are cost-effective diversification of plan assets, competitive returns on investment and preservation of capital. Plan assets are currently invested in mutual funds with various debt and equity investment objectives. The target asset allocation for the plan assets is 80% debt, or fixed income securities, and 20% equity securities. Individual funds are evaluated periodically based on comparisons to benchmark indices and peer group funds and investment decisions are made by Jazz in accordance with the policy goals. Actual allocation to each asset category fluctuates and may not be within the target allocation specified above due to changes in market conditions. The estimated expected return on assets of the plan is based on assumptions derived from, among other things, the historical return on assets of the plan, the current and expected investment allocation of assets held by the plan and the current and expected future rates of return in the debt and equity markets for investments held by the plan. The obligations under the plan could differ from the obligation currently recorded, if management's estimates are not consistent with actual investment performance. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 - COMMITMENTS AND CONTINGENCIES A. Liens (1) Loans, Bonds and Capital Leases For liens relating to Jazz Credit Line Agreement, see Note 11F. For liens under TPSCo 2018 JP Loan agreement, see Note 11C. For liens under the capital lease agreements, see Note11D. For liens under Bond G indenture, see Note 10B. (2) Approved Enterprise Program Floating liens are registered in favor of the State of Israel on substantially all of Tower’s assets under the Investment Center’s approved enterprise status program. B. Renewed contract in relation to TPSCo In March 2019, the Company, PSCS and TPSCo, as applicable, signed three-year agreements renewing their previously signed 2014-2019 agreements, to be in effect from April 2019 for an additional 3 year period. Under the renewed agreements, among others, PSCS will continue to utilize TPSCo’s three manufacturing facilities in Japan for its semiconductor business under a new pricing structure, which is resulting in lower annual and quarterly revenue commencing the second quarter of 2019, as compared to previous periods. C. License Agreements The Company enters into intellectual property and licensing agreements with third parties from time to time. The effect of each of them on the Company’s total assets and results of operations is immaterial. Certain of these agreements call for royalties to be paid by the Company to these third parties. D. Lease Agreement Jazz leases its fabrication facilities under operational lease contracts that may be extended until 2027, through the exercise of an option at Jazz’s sole discretion. In 2015, Jazz exercised its first option to extend the lease term from 2017 to 2022, while maintaining the option to extend the lease term at its sole discretion from 2022 to 2027. In the amendments to its leases, (i) Jazz secured various contractual safeguards designed to limit and mitigate any adverse impact of construction activities on its fabrication operations; and (ii) set forth certain obligations of Jazz and the landlord, including certain noise abatement actions at the fabrication facility. The landlord has made claims that Jazz’s noise abatement efforts are not adequate under the terms of the amended lease. Jazz does not agree and is disputing these claims. F - 39 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 14 - COMMITMENTS AND CONTINGENCIES (Cont.) E. Environmental Affairs The Company’s operations are subject to a variety of laws and state and governmental regulations relating to the use, discharge and disposal of toxic or otherwise hazardous materials used in the production processes. Operating permits and licenses are required for the operation of the Company’s facilities and these permits and licenses are subject to revocation, modification and renewal. Government authorities have the power to enforce compliance with these regulations, permits and licenses. As of the approval date of the financial statements, the Company is not aware of any noncompliance with the terms of said permits and licenses. F. An engagement in relation to a new fabrication facility planned to be built in China In prior years, the Company, Nanjing Development Zone, Tacoma Technology Ltd. and Tacoma (Nanjing) Semiconductor Technology Co., Ltd. (collectively known as “Tacoma”), signed agreements regarding a new 8-inch fabrication facility planned to be established in Nanjing, China. According to the terms therein, it was agreed that the Company will provide technological expertise together with operational and integration consultation, at terms and milestones to be further agreed to by the parties and may invest in the project to be a minority stakeholder. To date, the Company received a total of $27,000 (net of taxes) for technological licenses, consultation and other services it provided, of which $18,000 (net of taxes) during 2017 and the reminder during 2019. G. Other Agreements The Company enters from time to time, in the ordinary course of business, into long-term agreements with various entities for the joint development of products and processes utilizing technologies owned separately by either the other entity or the Company, or owned jointly by both parties, as applicable. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 15 - SHAREHOLDERS’ EQUITY A. Description of Ordinary Shares As of December 31, 2019, Tower had 150 million authorized ordinary shares, par value NIS 15.00 each, of which approximately 106.8 million were outstanding. Holders of ordinary shares are entitled to participate equally in the payment of cash dividends and bonus share (stock dividend) distributions and, in the event of the liquidation of Tower, in the distribution of assets after satisfaction of liabilities to creditors. Each ordinary share is entitled to one vote on all matters to be voted on by shareholders. F - 40 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 15 - SHAREHOLDERS’ EQUITY (Cont.) B. Equity Incentive Plans (1) General The Company has granted to its employees and directors options and Restricted Stock Units (“RSUs”) to purchase ordinary shares under several share incentive plans adopted by the Company. The particular provisions of each plan and grant vary as to vesting period, exercise price, exercise period and other terms. Generally, (i) the exercise price of options will not be lower than the nominal value of the shares and will equal either the closing market price of the ordinary shares immediately prior to the date of grant, or in relation to grants made from September 2013, an average of the closing price during the thirty trading days immediately prior to the date of grant; (ii) vesting is over a one to four year period according to defined vesting schedules, and for performance RSUs include financial performance targets; and (iii) options are not exercisable beyond seven or ten years from the grant date, as applicable. Except for those share incentive plans described below, as of December 31, 2019 and December 31, 2018, respectively, there were approximately 25 thousand and 26 thousand, respectively, options outstanding under the Company’s other share incentive plans (the "Old Plans”). No further options may be granted under the Old Plans. (2) Tower’s 2013 Share Incentive Plan (the "2013 Plan") In 2013, the Company adopted a share incentive plan for directors, officers and employees of the Company which in 2019 was extended to include also third party service providers (“2013 Plan”). Options granted under the 2013 Plan bear an exercise price, which equals an average of the closing price during the thirty trading days immediately prior to the date of grant, vest over up to a three-year period and are not exercisable beyond seven years from the grant date. Under the 2013 Plan, the Company granted, in 2019 and 2018, a total of 1.16 million and 0.98 million, respectively, of RSUs, to its employees and directors (including the below described grants to the CEO and Chairman), with vesting over up to a three-year period. The Company measures compensation expenses of the RSUs based on the closing market price of the ordinary shares immediately prior to the date of grant and amortizes it over the applicable vesting period taking in consideration compliance with performance criteria, if any. In June 2019, the Company's shareholders approved the grant of the following RSUs to the Company's CEO and members of the Board of Directors under the 2013 Plan: (i) 129 thousand time vested RSUs and 129 thousand performance based RSUs to the CEO, which RSUs will vest linearly over a three-year period, 33% at the end of each year of the three years following the grant date, for a compensation value of $3,900; (ii) 20 thousand time vested RSUs to the chairman of the Board of Directors (“the Chairman”) for a total compensation value of $300, to vest linearly over a three-year period, 33% at the end of each year of the three years following the grant date; and (iii) 5 thousand time vested RSUs to each of the 8 members of the Board of Directors (other than to the Chairman and the CEO), for an aggregate compensation value of $600, vesting over a two-year period, with 50% vesting at the end of the first anniversary of the date of grant and 50% on the second anniversary of the date of grant. F - 41 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 15 - SHAREHOLDERS’ EQUITY (Cont.) B. Equity Incentive Plans (Cont.) (2) Tower’s 2013 Share Incentive Plan (the "2013 Plan") (Cont.) In July 2018, the Company's shareholders approved the grant of the following RSUs to the Company's CEO and members of the Board of Directors under the 2013 Plan: (i) 107 thousand time vested RSUs and 72 thousand performance based RSUs to the CEO, which RSUs will vest linearly over a three-year period, 33% at the end of each year of the three years following the grant date, for a compensation value of $3,900; and, in addition, 50 thousand performance based RSUs vesting over three years, with 65% vesting at the first anniversary of the grant, an additional 25% at the second anniversary and the remaining portion at the third anniversary for an additional compensation value of $1,100; (ii) 14 thousand time vested RSUs to the Chairman for a total compensation value of $300, to vest linearly over a three-year period, 33% at the end of each year of the three years following the grant date; and (iii) 3 thousand time vested RSUs to each of the 8 members of the Board of Directors (other than to the Chairman and the CEO), for an aggregate compensation value of $600, vesting over a two-year period, with 50% vesting at the end of the first anniversary of the date of grant and 50% on the second anniversary of the date of grant. In June 2017, the Company’s shareholders approved the following equity awards to the Company’s CEO, chairman of the Board and board directors under the 2013 Plan: (i) 85 thousand time vested RSUs and 97 thousand performance-based RSUs to the CEO, for a total compensation value of $4,500; (ii) 12 thousand time vested RSUs to the chairman of the board of directors for a total compensation value of $300; and (iii) 3 thousand time vested RSUs to each of the members of the board of directors (other than to the Chairman and the CEO), for a total compensation value of $600. As of December 31, 2019, approximately 318 thousand options and approximately 2.0 million RSUs were outstanding under the 2013 Plan. As of December 31, 2018, approximately 483 thousand options and approximately 1.6 million RSUs were outstanding under the 2013 Plan. Further grants may be approved subject to compensation committee, board of directors and shareholders’ approval, as may be required by law. F - 42 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 15 - SHAREHOLDERS’ EQUITY (Cont.) B. Equity Incentive Plans (Cont.) (3) Summary of the Status of all the Company’s Employees’ and Directors’ Share Incentive Plans i. Share Options awards: 2019 2018 2017 Number of share options Weighted average exercise price Number of share options Weighted average exercise price Number of share options Weighted average exercise price Outstanding as of beginning of year 508,493 $ 9.58 580,185 $ 9.64 2,278,089 $ 9.92 Granted -- -- -- -- -- Exercised (163,375 ) 11.28 (70,271 ) 10.19 (1,611,489 ) 9.27 Terminated (667 ) 9.90 (921 ) 9.82 (77,292 ) 25.89 Forfeited (1,000 ) 4.42 (500 ) 4.42 (9,123 ) 8.06 Outstanding as of end of year 343,451 8.79 508,493 9.58 580,185 9.64 Options exercisable as of end of year 343,451 8.79 485,579 $ 9.46 459,662 $ 8.51 ii. RSU awards: 2019 2018 2017 Number of RSU Weighted Average Fair Value Number of RSU Weighted Average Fair Value Number of RSU Weighted Average Fair Value Outstanding as of beginning of year 1,599,296 $ 22.27 1,245,889 $ 21.29 1,009,184 $ 14.62 Granted 1,159,881 18.06 977,667 20.80 818,856 24.88 Converted (484,665 ) 23.91 (602,423 ) 17.86 (553,241 ) 14.71 Forfeited (260,899 ) 21.19 (21,837 ) 22.11 (28,910 ) 16.42 Outstanding as of end of year 2,013,613 $ 19.13 1,599,296 $ 22.27 1,245,889 $ 21.29 F - 43 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 15 - SHAREHOLDERS’ EQUITY (Cont.) B. Equity Incentive Plans (Cont.) (4) Summary of Information about Employees’ Share Incentive Plans The following table summarizes information about employees’ share options outstanding as of December 31, 2019: Outstanding Exercisable Range of exercise prices Number outstanding Weighted average remaining contractual life (in years) Weighted average exercise price Number exercisable Weighted average exercise price $ 4.42 - 17.25 343,451 1.78 $ 8.79 343,451 $ 8.79 Year ended December 31, 2019 2018 2017 The intrinsic value of options exercised $ 1,824 $ 1,416 $ 26,031 The original fair value of options exercised $ 665 $ 302 $ 7,202 Year ended December 31, 2019 2018 2017 The intrinsic value of converted RSUs $ 8,207 $ 15,840 $ 12,996 The original fair value of converted RSUs $ 11,588 $ 10,761 $ 8,138 Stock-based compensation expenses were recognized in the Statement of Operations as follows: Year ended December 31, 2019 2018 2017 Cost of goods $ 4,529 $ 3,141 $ 3,084 Research and development, net 2,900 2,533 2,555 Marketing, general and administrative 7,119 6,987 6,010 Total stock-based compensation expense $ 14,548 $ 12,661 $ 11,649 F - 44 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 15 - SHAREHOLDERS’ EQUITY (Cont.) C. Israeli Bank’s Capital Notes During the first quarter of 2019, approximately 1.2 million ordinary shares were issued following the conversion of the last remaining capital notes. As a result, as of December 31, 2019 no capital notes were outstanding. D. Treasury Stock During 1999 and 1998, the Company funded the purchase by a trustee of an aggregate of approximately 87 thousand Tower’s ordinary shares. These shares are classified as treasury shares. E. Dividend Restriction Tower is subject to limitations under Series G Debentures indenture, which enables distribution of dividends subject to satisfying certain financial ratios. |
INFORMATION ON GEOGRAPHIC AREAS
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS | NOTE 16 - INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS A. Revenues by Geographic Area - as Percentage of Total Revenue Year ended December 31, 2019 2018 2017 USA 52 % 52 % 52 % Japan 29 34 32 Asia * 15 10 12 Europe 4 4 4 Total 100 % 100 % 100 % * Represents revenues from individual countries of less than 10% each. The basis of attributing revenues from external customers to geographic area is based on the headquarter location of the customer issuing the purchase order; actual delivery may be shipped to another geographic area per customer request. B. Long-Lived Assets by Geographic Area Substantially all of Tower’s long-lived assets are located in Israel, substantially all of Jazz’s and TJT’s long-lived assets are located in the United States and substantially all of TPSCo’s long-lived assets are located in Japan. As of December 31, 2019 2018 Israel $ 219,479 $ 215,419 United States 248,453 239,462 Japan 214,007 202,353 Total $ 681,939 $ 657,234 C. Major Customers - as Percentage of Net Accounts Receivable Balance As of December 31, 2019, no customer exceeded 10% of the net accounts receivable balance. As of December 31, 2018, two customers exceeded 10% of the net accounts receivable balance and represented 13% and 10% of such balance. F - 46 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 16 - INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Cont.) D. Major Customers - as Percentage of Total Revenue Year ended December 31, 2019 2018 2017 Customer A 27 % 33 % 30 % Customer B 5 7 12 Other customers * 27 16 15 * Represents aggregated revenue to four customers accounted between 5% and 9% of revenue during 2019, to two customers accounted for 7% and 9% of revenue during 2018, and to two customers accounted for 7% and 8% of revenue during 2017. |
FINANCING EXPENSE (INCOME), NET
FINANCING EXPENSE (INCOME), NET | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
FINANCING EXPENSE, NET | NOTE 17 - FINANCING EXPENSE (INCOME), NET Financing expense (income), net consists of the following: Year ended December 31, 2019 2018 2017 Interest expense $ 6,823 $ 10,610 $ 12,623 Interest income (12,949 ) (10,762 ) (4,783 ) Jazz Notes amortization -- 5,010 4,230 Series G Debentures amortization, related rate differences and hedging results 3,299 3,589 2,738 Exchange rate differences 968 1,064 6 Bank fees and others 1,847 3,673 633 $ (12 ) $ 13,184 $ 15,447 |
RELATED PARTIES BALANCES AND TR
RELATED PARTIES BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES BALANCES AND TRANSACTIONS | NOTE 18 - RELATED PARTIES BALANCES AND TRANSACTIONS A. Balance: The nature of the relationship involved As of December 31, 2019 2018 Long-term investment Equity investment in a limited partnership $ 55 $ 110 B. Transactions: Description of the transactions Year ended December 31, 2019 2018 2017 General and Administrative expense Directors’ fees and reimbursement to directors $ 783 $ 736 $ 719 Other income (expense), net Non-controlling interest income (loss) from a limited Partnership $ (55 ) $ 44 $ 29 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 19 - INCOME TAXES A. Tower Approved Enterprise Status and Statutory Income Rates Substantially all of Tower’s existing facilities and other capital investments made through 2012 have been granted approved enterprise status, as provided by the Law for the Encouragement of Capital Investment (“Investments Law”). Tower, as an industrial company located in Migdal Ha’emek, may elect the Preferred Enterprise regime to apply to it under the Investment Law. The election is irrevocable. Under the Preferred Enterprise Regime, Tower’s entire preferred income is subject to the tax rate of 7.5%. Income not eligible for Preferred Enterprise benefits is taxed at the regular corporate tax rate of 23% for 2019, 23% for 2018 and 24% for 2017. The Company operates in a multinational tax environment and is subject to tax treaty arrangements and transfer pricing guidelines for intercompany transactions. The Company is basing its positions on studies that are customary, acceptable and are in compliance with international tax rules in the jurisdictions the Company operates in. B. Income Tax Provision The Company’s income tax provision is as follows: Year ended December 31, 2019 2018 2017 Current tax expense: Local -- $ 2,164 $ 3,622 Foreign (*) 1,013 9,273 6,070 Deferred tax expense (benefit): Local (see F below) 7,098 9,316 (82,370 ) Foreign(*) (see E below) (5,163 ) (14,815 ) (27,210 ) Income tax expense (benefit) $ 2,948 $ 5,938 $ (99,888 ) Year ended December 31, 2019 2018 2017 Profit (loss) before taxes: Domestic $ 103,432 $ 142,831 $ 198,008 Foreign (*) (12,411 ) (3,514 ) 3,760 Total profit before taxes $ 91,021 $ 139,317 $ 201,768 (*) Foreign are amounts related to Tower’s Japanese and US subsidiaries. F - 48 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 19 - INCOME TAXES (Cont.) C. Components of Deferred Tax Asset/Liability The following is a summary of the components of the deferred tax assets and liabilities reflected in the balance sheets as of the respective dates (*) As of December 31, 2019 2018 Deferred tax asset and liability - long-term: Deferred tax assets: Net operating loss carryforward $ 78,783 $ 87,325 Employees benefits and compensation 4,819 4,914 Accruals and reserves 3,341 4,738 Research and development 15,276 12,292 Others 5,068 3,615 107,287 112,884 Valuation allowance, see F below (7,266 ) (5,834 ) Deferred tax assets $ 100,021 $ 107,050 Deferred tax liabilities- long-term: Depreciation and amortization (77,966 ) (82,001 ) Gain on TPSCo acquisition -- (1,240 ) Others (931 ) (750 ) Deferred tax liabilities $ (78,897 ) $ (83,991 ) Presented in long term deferred tax assets $ 66,362 $ 73,460 Presented in long term deferred tax liabilities $ (45,238 ) $ (50,401 ) (*) Deferred tax assets and liabilities relating to Tower for the years 2019 and 2018 are computed based on the Israeli preferred enterprise tax rate of 7.5%. F - 49 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 19 - INCOME TAXES (Cont.) D. Unrecognized Tax Benefit A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Unrecognized tax benefits Balance at January 1, 2019 $ 14,783 Additions for tax positions of current year 778 Reduction due to statute of limitation of prior years (448 ) Balance at December 31, 2019 $ 15,113 Unrecognized tax benefits Balance at January 1, 2018 $ 15,286 Additions for tax positions of current year 716 Reduction due to statute of limitation of prior years (1,219 ) Balance at December 31, 2018 $ 14,783 Unrecognized tax benefits Balance at January 1, 2017 $ 8,969 Additions for tax positions 8,753 Reduction of prior years’ provision (2,436 ) Balance at December 31, 2017 $ 15,286 E. Effective Income Tax Rates In December 2017, the Tax Cut and Jobs Act (the “Act”) was signed into law, which enacts significant changes to U.S. federal corporate tax and related laws. Some of the provisions of the Act affecting corporations include, but are not limited to: (i) a reduction of the U.S. Federal corporate income tax rate from 35% to 21%; (ii) limiting the interest expense deduction; (iii) expensing of cost of acquired qualified property; (iv) elimination of the domestic production activities deduction; (v) elimination of Alternative Minimum Tax (“AMT”) and (vi) refund ability of AMT credits, which were generated prior to the Act, in 2018 and thereafter. Tower US Holdings recorded in the twelve months ended December 31, 2017 a non-cash income tax benefit in the amount of approximately $13,000 for Act-related impacts. F - 50 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 19 - INCOME TAXES (Cont.) E. Effective Income Tax Rates (Cont.) The reconciliation of the statutory tax rate to the effective tax rate is as follows: Year ended December 31, 2019 2018 2017 Tax expense computed at statutory rates, see (*) below $ 20,935 $ 32,044 $ 48,433 Effect of tax rate change on deferred tax liabilities, net (**) 314 (478 ) (16,078 ) Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit (16,396 ) (23,150 ) (33,298 ) Change in Valuation allowance, see F below (962 ) (82,772 ) Tax benefits for which deferred taxes were not recorded, see F below -- -- (15,103 ) Permanent differences and other, net (1,905 ) (1,516 ) (1,070 ) Income tax expense (benefit) $ 2,948 $ 5,938 $ (99,888 ) (*) The tax expense (benefit) was computed based on Tower’s regular corporate tax rate of 23% for 2019, 23% for 2018 and 24% for 2017. (**) Reduction in tax rates due to the U.S. Tax Reform and reduction in income tax rates in Japan. F. Net Operating Loss Carryforward As of December 31, 2019, Tower had net operating loss carryforward for tax purposes of approximately $1,000,000 which may be carried forward indefinitely. For the year ended December 31, 2016, Tower recorded a valuation allowance for deferred tax assets as it was unable to conclude that it is more-likely-than-not that such deferred tax assets would be realized. As of December 31, 2017, Tower concluded that realization of net deferred assets is more likely than not as required by ASC 740-10-30-5(e). Tower considered both positive and negative factors. Positive factors include the Israeli accumulated profit before tax for 2017 and recent years, projections for taxable income in Israel in the near term and the unlimited time for the utilization of the losses carryforward. The negative factors considered include Tower’s history of operating losses, the uncertainty in estimating the future generation of sufficient taxable income in Israel to utilize the loss carryforward in the amount noted above taking into account that it operates in the cyclical industry of semiconductors and other trends affecting Tower’s ability to sustain its current level of income. Weighing all the above, Tower concluded in 2017 that it is more likely than not that taxable income will be generated and released entirely the valuation allowance related to the Israeli accumulated losses. F - 51 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 19 - INCOME TAXES (Cont.) F. Net Operating Loss Carryforward (Cont.) The future utilization of Tower US Holdings’ federal net operating loss carryforward to offset future federal taxable income is subject to an annual limitation as a result of ownership changes that have occurred. Additional limitations could apply if ownership changes occur in the future. Jazz has had two “change in ownership” events that limit the utilization of net operating loss carryforward. The first “change in ownership” event occurred in February 2007 upon Jazz Technologies’ acquisition of Jazz Semiconductor. The second “change in ownership” event occurred in September 2008, upon Tower’s acquisition of Jazz. Jazz concluded that the net operating loss limitation for the change in ownership which occurred in September 2008 will be an annual utilization of approximately $ 2,100 in its tax return. As of December 31, 2019, Tower US Holdings had federal net operating loss carryforward of approximately $31,000, of which approximately $5,000 do not expire and is subject to taxable income limitation of 80% due to the Act, and the remaining federal tax loss carryforwards of $26,000 will begin to expire in 2022, unless previously utilized. As of December 31, 2019, Tower US Holdings had California state net operating loss carryforward of approximately $11,000. The state tax loss carry forward begin to expire in 2028, unless previously utilized. As of December 31, 2019 and 2018, TPSCo had no net operating loss carryforward. G. Final Tax Assessments Tower possesses final tax assessments through the year 1998. In addition, the tax assessments for the years 1999-2014 are deemed final. Tower US Holdings is filing the consolidated tax return including Jazz and TJT. Tower US Holdings and its subsidiaries are subject to U.S. federal income tax as well as income tax in multiple states. With few exceptions, Tower US Holdings is no longer subject to U.S. federal income tax examinations before 2016 and state and local income tax examinations before 2015. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward amount. TPSCo possesses final tax assessments through the year 2016. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates in Preparation of Financial Statements | A. Use of Estimates in Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, affect the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Principles of Consolidation | B. Principles of Consolidation The Company’s consolidated financial statements include the financial statements of Tower and its subsidiaries. The Company’s consolidated financial statements are presented after elimination of inter-company transactions and balances. |
Cash and Cash Equivalents | C. Cash and Cash Equivalents Cash and cash equivalents consist of cash, bank deposits and short-term investments with original maturities of three months or less. |
Short-Term Interest-Bearing Deposits | D. Short-Term Interest-Bearing Deposits Short-term deposits include bank deposits with original maturities greater than three months and less than one year. Such deposits presented at cost, including accrued interest, which approximates their fair value. |
Marketable securities | E. Marketable securities The Company accounts for investments in debt securities in accordance with ASC 320 “Investments - Debt and Equity Securities” Marketable securities classified as "available-for-sale" are carried at fair value, based on quoted market prices. Unrealized gains and losses are reported in a separate component of shareholders' equity in accumulated other comprehensive income (“OCI”). Gains and losses are recognized when realized, on a specific identification basis, in the Company's consolidated statements of income. The Company's securities are reviewed for impairment in accordance with ASC 320-10-35. If such assets are considered to be impaired, the impairment charge is recognized in earnings when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company's intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities with an unrealized loss that the Company intends to sell, or it is more likely than not that the Company will be required to sell before recovery of their amortized cost basis, the entire difference between amortized cost and fair value is recognized in earnings. For securities that do not meet these criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while declines in fair value related to other factors are recognized in OCI. F - 10 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) E. Marketable securities (Cont.) If quoted prices for identical instruments are available in an active market, marketable securities are classified within Level 1 of the fair value hierarchy. If quoted prices for identical instruments in active markets are not available, fair values are estimated using quoted prices of similar instruments and are classified within Level 2 of the fair value hierarchy. |
Trade Accounts Receivables - Allowance for Doubtful Accounts | F. Trade Accounts Receivables - Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts, based on specific analysis of the account receivable’s aging, assessment of its related risk and ability of the customer to make the required payment.. As of December 31, 2019 and 2018, the allowance for doubtful accounts was $10,925 and $4,208, respectively, of which $10,000 and $3,000, respectively, relates to a customer located in the Far East region. |
Accounts Receivable Factoring | G. Accounts Receivable Factoring From time to time, the Company uses non-recourse factoring arrangements, to sell accounts receivable to third-party financial institutions. The sale of the receivables in these arrangements are accounted for as a true sale, under ASC 860. |
Inventories | H. Inventories Inventories are stated at the lower of aggregate cost or net realizable value. If inventory costs exceed expected net realizable value, the Company records reserves for the difference between the cost and the expected net realizable value. Cost of raw materials is determined mainly on the basis of the weighted average moving price per unit. |
Investments in Privately-Held Companies | I. Investments in Privately-Held Companies Long-term investments include equity investments in privately-held companies without readily determinable fair values. In accordance with ASC 321 - “Investments - Equity Securities” |
Property and Equipment | J. Property and Equipment The Company accounts for property and equipment in accordance with Accounting Standards Codification ASC 360 “Accounting for the Property, Plant and Equipment” F - 11 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) J. Property and Equipment (cont.) Maintenance and repairs are charged to expenses as incurred. Property and equipment are presented net of investment grants received, and less accumulated depreciation. Depreciation is calculated based on the straight-line method over the Company’s estimated useful lives of the assets, as follows: Buildings and building improvements, including facility infrastructure 10-25 years Machinery and equipment, software and hardware 3-15 years Impairment charges, if needed, are determined based on the policy outlined in L below. Property and equipment includes also assets under capital leases and are depreciated according to their applicable useful life. |
Intangible Assets and Goodwill | K. Intangible Assets and Goodwill The Company accounts for intangible assets and goodwill in accordance with ASC 350 “Intangibles-Goodwill and Other”. Intangible assets include the values assigned to the intangible assets as part of the purchase price allocation made at the time of acquisition. Intangible assets are amortized over the expected estimated economic life of the intangible assets commonly used in the industry. Goodwill is not amortized and subject to impairment test. Impairment charges on intangibles or goodwill, if needed, are determined based on the policy outlined in L below. |
Impairment of Assets | L. Impairment of Assets Impairment of Property, Equipment and Intangible Assets The Company reviews long-lived assets and intangible assets on a periodic basis, as well as when such review is required based upon relevant circumstances, to determine whether events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, considering the undiscounted cash flows expected from it. If applicable, the Company recognizes an impairment loss based upon the difference between the carrying amount and the fair value of such assets, in accordance with ASC 360-10 “Property, Plant and Equipment”. Impairment of Goodwill The Company tests goodwill for impairment by performing a qualitative assessment process, or using a two-step quantitative assessment process. If the Company chooses to perform a qualitative assessment process and determines it is more likely than not (that is, a likelihood of more than 50 percent) that the carrying value of the net assets is more than the fair value of the reporting unit, the two-step quantitative assessment process is then performed; otherwise, no further testing is required. The Company may elect not to perform the qualitative assessment process and, instead, proceed directly to the two-step quantitative assessment process. F - 12 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) L. Impairment of Assets (cont.) Impairment of Goodwill (Cont.) The first step identifies potential impairment by comparing the fair value of a reporting unit with its carrying amount, including the goodwill. The fair value of the reporting units is determined using a discounted cash flow analysis (income approach). This fair value approach requires significant management judgment and estimations. The determination of fair value using a discounted cash flow analysis requires the use of key judgments, estimates and assumptions including revenue growth rates, projected operating margins, changes in working capital, terminal values, and discount rates. If the fair value exceeds the carrying amount of a reporting unit, goodwill is not considered impaired and the second step of the test is unnecessary. If the carrying amount exceeds the fair value of a reporting unit, the second step measures the impairment loss, if any. The second step compares the implied fair value of goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. The implied fair value of the reporting unit’s goodwill is calculated by creating a hypothetical balance sheet as if the reporting unit had just been acquired. This balance sheet contains all assets and liabilities recorded at fair value (including any intangible assets that may not have any corresponding carrying value in the balance sheet). The implied value of the reporting unit’s goodwill is calculated by subtracting the fair value of the net assets from the fair value of the reporting unit. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. |
Leases | M. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases” On January 1, 2019, the Company adopted ASC 842 using the modified retrospective transition method. Results for the reporting period beginning January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with historical accounting under ASC 840, “Leases” F - 13 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) M. Leases (cont.) For all leases that commenced before the effective date of ASC 842, the permitted “practical expedients” as stipulated in the ASC was elected and accordingly, the Company did not reassess: (1) whether any expired or existing contracts contain leases; (2) the lease classification for any expired or existing leases; and (3) initial direct costs for any existing leases. The determination if an arrangement is a lease is to be made at inception of a lease contract. ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Whenever leases do not provide an implicit interest rate, incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Certain lease agreements require payments for lease and non-lease components and the Company elected to account for these as a single lease component related to other operating facilities. For additional information, please see Notes 11D and 11E. |
Revenue Recognition | N. Revenue Recognition ASC Topic 606 “Revenue from Contracts with Customers” “Revenue Recognition” Under the modified retrospective method, prior period financial positions and results are not adjusted. There was no transition adjustment to the company’s retained earnings upon adoption. The Company’s revenues are generated principally from sales of semiconductor wafers. The Company, to a much lesser extent, also derives revenues from design support and other technical and support services incidental to the sale of semiconductor wafers. The vast majority of the Company’s sales are achieved through the effort of its direct sales force. Wafer sales are recognized at a point in time, which is upon shipment or upon delivery of the Company’s products to unaffiliated customers, depending on shipping terms. Accordingly, control of the products transfers to the customer in accordance with the transaction's shipping terms. Sales revenue is recognized for the amount of consideration that the Company expects to be entitled to in exchange for its products. Taxes imposed by governmental authorities, such as sales taxes or value-added taxes, are excluded from net sales. The Company’s contracts typically contain a single performance obligation that is fulfilled on the date of delivery based on shipping terms stipulated in the contract. F - 14 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. Revenue Recognition (cont.) The Company provides for sales returns allowance relating to specified yield or quality commitments as a reduction of revenues, based on past experience and specific identification of events necessitating an allowance, which has been in immaterial amounts. The Company provides its customers with other services that are less significant in scope and amount and for which recognition is over time when customer receives the services. |
Research and Development | O. Research and Development Research and development costs are charged to operations as incurred. Amounts received or receivable from the government of Israel and others, as participation in research and development programs, are offset against research and development costs. The accrual for grants receivable is determined based on the terms of the programs, provided that the criteria for entitlement have been met. |
Income Taxes | P. Income Taxes The Company accounts for income taxes using an asset and liability approach as prescribed in ASC 740-10 “Income Taxes” The Company evaluates the potential realization of its deferred tax assets for each jurisdiction in which the Company operates at each reporting date and establishes valuation allowances when it is more likely than not that all or a part of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the same character and in the same jurisdiction. The Company considers all available positive and negative evidence in making this assessment, including, but not limited to, the scheduled reversal of deferred tax liabilities and projected future taxable income. In circumstances where there is sufficient negative evidence indicating that the Company's deferred tax assets are not more-likely-than-not realizable, the Company establishes a valuation allowance, see Note 19. F - 15 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) P. Income Taxes (cont.) ASC 740-10 prescribes a two-step approach for recognizing and measuring uncertain tax positions. The first step is to evaluate tax positions taken or expected to be taken in a tax return by assessing whether they are more-likely-than-not sustainable, based solely on their technical merits, upon examination and including resolution of any related appeals or litigation process. The second step is to measure the associated tax benefit of each position as the largest amount that the Company believes is more-likely-than-not realizable. Differences between the amount of tax benefits taken or expected to be taken in its income tax returns and the amount of tax benefits recognized in its financial statements, represent the Company's unrecognized income tax benefits. The Company's policy is to include interest and penalties related to unrecognized income tax benefits as a component of income tax expense. |
Earnings per Ordinary Share | Q. Earnings per Ordinary Share Basic earnings per share are calculated in accordance with ASC 260, “Earnings Per Share” |
Comprehensive Income | R. Comprehensive Income In accordance with ASC 220 “Comprehensive Income” |
Functional Currency and Exchange Rate Income (Loss) | S. Functional Currency and Exchange Rate Income (Loss) The currency of the primary economic environment in which Tower, TJT and Jazz conduct their operations is the U.S. Dollar (“dollar”). Thus, the dollar is their functional and reporting currency. Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with ASC 830-10 “ Foreign Currency Matters The statements of operations of TPSCo has been translated using the average exchange rate for the reported period. The resulting translation adjustments are charged or credited to OCI. |
Stock-Based Compensation | T. Stock-Based Compensation The Company applies the provisions of ASC Topic 718 “ Compensation - Stock Compensation Accordingly, stock-based compensation granted to employees and directors is measured at the grant date, based on the fair value of the grant. The compensation costs are recognized using the graded vesting attribution method based on the vesting terms of each unit included in the award resulting in an accelerated recognition of compensation costs. |
Fair value of Financial Instruments and Fair Value Measurements | U. Fair value of Financial Instruments and Fair Value Measurements ASC 820, "Fair Value Measurements and Disclosures" ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company's financial instruments of cash, bank deposits, marketable securities, account receivable and payables, accrued liabilities, loans and leases approximate their current fair values because of their nature and respective maturity dates or durations. The Company had no financial assets or liabilities carried and measured on a non-recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. |
Derivatives and hedging | V. Derivatives and hedging Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, the gains (losses) are recognized in earnings in the periods of change together with the offsetting losses (gains) on the hedged items attributed to the risk being hedged. For derivative instruments designated as cash flow hedges, the effective portion of the gains (losses) on the derivatives is initially reported as a component of OCI and is subsequently recognized in earnings when the hedged exposure is recognized in earnings. Gains (losses) on derivatives are recognized in earnings, representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness. For derivative instruments that are not designated as hedges, gains (losses) from changes in fair values are primarily recognized in the same line of the item economically hedged. |
Recently Issued Accounting Pronouncements | W. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, " Income Taxes - Simplifying the Accounting for Income Taxes In August 2018, the FASB issued ASU No. 2018-13 “ Fair Value Measurement In June 2018, the FASB issued ASU No. 2018-07 “ Compensation - Stock Compensation F - 18 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) W. Recently Issued Accounting Pronouncements (Cont.) In January 2017, the FASB issued ASU 2017-04 “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment” In June 2016, the FASB issued ASU 2016-13 “Financial Instruments Credit Losses” |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Economic Lives | Depreciation is calculated based on the straight-line method over the Company’s estimated useful lives of the assets, as follows: Buildings and building improvements, including facility infrastructure 10-25 years Machinery and equipment, software and hardware 3-15 years |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following: As of December 31, 2019 2018 Raw materials $ 90,605 $ 72,144 Work in process 91,537 92,047 Finished goods 10,114 6,587 $ 192,256 $ 170,778 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Summary of Other Current Assets | Other current assets consist of the following: As of December 31, 2019 2018 Tax receivables $ 8,156 $ 3,997 Prepaid expenses 8,265 14,170 Accrued interest on bank deposits and other receivables 5,598 4,585 $ 22,019 $ 22,752 |
LONG-TERM INVESTMENTS (Tables)
LONG-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Long-Term Investments | Long-term investments consist of the following: As of December 31, 2019 2018 Severance-pay funds $ 11,860 $ 13,615 Long-term bank deposit 12,500 12,500 Investments in privately- held companies 15,725 9,830 $ 40,085 $ 35,945 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Property and Equipment | Composition: As of December 31, 2019 2018 Original cost: Land and Buildings (including facility infrastructure) $ 363,133 $ 347,798 Machinery and equipment (*) 2,684,980 2,482,609 $ 3,048,113 $ 2,830,407 Accumulated depreciation: Buildings (including facility infrastructure) $ (239,241 ) $ (224,796 ) Machinery and equipment (2,126,933 ) (1,948,377 ) $ (2,366,174 ) $ (2,173,173 ) $ 681,939 $ 657,234 (*) Original cost of machinery and equipment includes ROU assets under capital lease in the amount of $86,087 and $54,873 as of December 31, 2019 and 2018, respectively. The depreciation expense of such assets amounted to $9,941 and $2,102 for the years ended December 31, 2019 and 2018, respectively. |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets consist of the following as of December 31, 2019: Useful Life (years) Cost Accumulated Amortization Net Technologies 4;5;9 $ 111,108 $ (110,730 ) $ 378 Facilities lease 19 33,500 (24,241 ) 9,259 Trade name 9 7,702 (7,702 ) -- Customer relationships 15 2,600 (1,956 ) 644 Total identifiable intangible assets $ 154,910 $ (144,629 ) $ 10,281 Intangible assets consist of the following as of December 31, 2018: Useful Life (years) Cost Accumulated Amortization Net Technologies 4;5;9 $ 110,835 $ (108,888 ) $ 1,947 Facilities lease 19 33,500 (22,953 ) 10,547 Trade name 9 7,671 (7,547 ) 124 Customer relationships 15 2,600 (1,783 ) 817 Total identifiable intangible assets $ 154,606 $ (141,171 ) $ 13,435 |
DEFERRED TAX AND OTHER LONG-T_2
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Deferred Tax and Other Long-Term Assets | Deferred tax and other long-term assets, net consist of the following: As of December 31, 2019 2018 Deferred tax asset (see Note 19) $ 66,362 $ 73,460 Right of use - assets under operating leases 17,828 -- Prepaid long-term land lease, net 3,175 3,296 Fair value of cross currency interest rate swap (see Note 12D) 12,625 6,722 Long-term prepaid expenses and others 5,057 4,926 $ 105,047 $ 88,404 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities, Current [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consist of the following: As of December 31, 2019 2018 Tax payables $ 282 $ 12,096 Interest payable 1,057 986 Others 5,962 4,035 $ 7,301 $ 17,117 |
DEBENTURES (Tables)
DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable [Abstract] | |
Schedule of Maturities of Debentures | A. Composition by Repayment Schedule: As of December 31, 2019 Interest rate 2020 2021 2022 2023 Total Debentures Series G (see B below) 2.79 % $ 38,690 $ 38,690 $ 38,690 $ 19,347 $ 135,417 Accretion of carrying amount to principal amount (3,134 ) Carrying amount $ 132,283 As of December 31, 2018 Interest rate 2019 2020 2021 2022 2023 Total Debentures Series G (see B below) 2.79 % $ -- $ 35,676 $ 35,676 $ 35,676 $ 17,839 $ 124,867 Accretion of carrying amount to principal amount (4,697 ) Carrying amount $ 120,170 |
OTHER LONG-TERM DEBT (Tables)
OTHER LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Loans Payable [Abstract] | |
Schedule of Other Long-Term Debt | A. Composition: As of December 31, 2019 2018 Long-term JPY bank loan - principal amount, see B and C below $ 101,365 $ 100,118 Capital leases - see D below 60,277 47,195 Operating leases – see E below 17,828 -- Less - current maturities of long-term debt (28,201 ) (10,814 ) $ 151,269 $ 136,499 |
Schedule of Repayment of Loans | B. Composition by Repayment Schedule of Loans: As of December 31, 2019 Interest rate 2020 2021 2022 2023 2024 and on Total In JPY 1.95 % $ -- $ 22,526 $ 22,526 $ 22,526 $ 33,787 $ 101,365 Total outstanding principal $ -- $ 22,526 $ 22,526 $ 22,526 $ 33,787 $ 101,365 As of December 31, 2018 Interest rate 2019 2020 2021 2022 2023 and on Total In JPY 1.95 % $ -- $ -- $ 22,248 $ 22,248 $ 55,622 $ 100,118 Total outstanding principal $ -- $ -- $ 22,248 $ 22,248 $ 55,622 $ 100,118 |
Schedule of Maturity of Capital Leases liabilities | The following presents the maturity of capital lease liabilities as of December 31, 2019: Fiscal Year 2020 $ 21,070 2021 16,332 2022 14,386 2023 7,684 2024 805 Total $ 60,277 |
Schedule of Composition of Operating Leases | The following presents the composition of operating lease: Classification in Consolidated Balance Sheets December 31, 2019 Right of use - assets under operating leases Deferred tax and other long-term assets, net $ 17,828 Lease liabilities: Current operating leases liabilities Current maturities of long-term debt $ 7,131 Long-term operating lease liabilities Other long-term debt 10,697 Total operating lease liabilities $ 17,828 Weighted average remaining lease term (years) 4.9 Weighted average discount rate 1.95 % |
Schedule of Maturity of Operating Leases liabilities | The following presents the maturity of operating lease liabilities as of December 31, 2019: Fiscal Year 2020 $ 7,131 2021 6,304 2022 2,064 2023 645 2024 645 Thereafter 1,667 Total 18,456 Less – imputed interest (628 ) Total $ 17,828 |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | |
Schedule of Recurring Fair Value Measurements | Recurring fair value measurements using the indicated inputs: December 31, 2019 Quoted prices in active market for identical liability (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cross currency swap - net asset position $ 15,642 $ -- $ 15,642 $ -- Privately-held companies 15,725 -- 15,725 Marketable securities held for sale 175,305 175,305 -- -- Foreign exchange forward and cylinders - liability position (151 ) -- (151 ) -- $ 206,521 $ 175,305 $ 15,491 $ 15,725 December 31, 2018 Quoted prices in active market for identical liability (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cross currency swap - net asset position $ 4,951 $ -- $ 4,951 $ -- Privately-held companies 9,830 -- 9,830 Marketable securities held for sale 135,227 135,227 -- -- Foreign exchange forward and cylinders - liability position (395 ) -- (395 ) -- $ 149,613 $ 135,227 $ 4,556 $ 9,830 |
Schedule of Marketable Securities | The following table summarizes amortized costs, gross unrealized gains and losses and estimated fair values of available-for-sale marketable securities as of December 31, 2019: Amortized cost (*) Gross unrealized Gains Gross Unrealized losses Estimated fair value Corporate bonds $ 154,167 $ 1,273 $ (214 ) $ 155,226 U.S government bonds 1,977 26 -- 2,003 Non-U.S government bonds 992 11 -- 1,003 Municipal bonds 1,208 21 -- 1,229 Money market fund 15,225 366 -- 15,591 Certificate of deposits 248 5 -- 253 $ 173,817 $ 1,702 $ (214 ) $ 175,305 * Excluding accrued interest of $765. The following table summarizes amortized costs, gross unrealized gains and losses and estimated fair values of available-for-sale marketable securities as of December 31, 2018: Amortized cost (*) Gross unrealized gains Gross Unrealized losses Estimated fair value Corporate bonds $ 111,639 $ 29 $ (2,029 ) $ 109,639 U.S government bonds 5,444 21 -- 5,465 Non-U.S government bonds 2,456 -- (33 ) 2,423 Municipal bonds 2,248 -- (13 ) 2,235 Money market fund 15,225 -- -- 15,225 Certificate of deposits 248 -- (8 ) 240 $ 137,260 $ 50 $ (2,083 ) $ 135,227 * Excluding accrued interest of $623. |
Schedule of Maturities of Marketable Securities | The scheduled maturities of available-for-sale marketable securities as of December 31, 2019, were as follows: Amortized cost Estimated fair value Due within one year $ 37,845 $ 37,818 Due after one year through five years 135,972 137,487 $ 173,817 $ 175,305 The scheduled maturities of available-for-sale marketable securities as of December 31, 2018, were as follows: Amortized cost Estimated fair value Due within one year $ 16,686 $ 16,661 Due after one year through five years 120,574 118,566 $ 137,260 $ 135,227 |
Schedule of Investments with Continuous Unrealized Losses | Investments with continuous unrealized losses for less than twelve months and twelve months or more and their related fair values as of December 31, 2019 and December 31, 2018, were as indicated in the following tables: December 31, 2019 Investment with continuous unrealized losses for less than twelve months Investments with continuous unrealized losses for twelve months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate bonds $ 8,562 $ (56 ) $ 23,022 $ (158 ) $ 31,584 $ (214 ) Non-U.S government bonds -- -- -- -- -- -- Municipal bonds -- -- -- -- -- -- Certificate of deposits -- -- -- -- -- -- Total $ 8,562 $ (56 ) $ 23,022 $ (158 ) $ 31,584 $ (214 ) F - 31 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 12 - FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cont.) F. Short-Term and Long-Term Deposits and Marketable Securities (Cont.) December 31, 2018 Investment with continuous unrealized losses for less than twelve months Investments with continuous unrealized losses for twelve months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate bonds $ 19,716 $ (140 ) $ 79,609 $ (1,889 ) $ 99,325 $ (2,029 ) Non-U.S government bonds 963 -- 1,460 (33 ) 2,423 (33 ) Municipal bonds 2,235 (13 ) -- -- 2,235 (13 ) Certificate of deposits -- -- 240 (8 ) 240 (8 ) Total $ 22,914 $ (153 ) $ 81,309 $ (1,930 ) $ 104,223 $ (2,083 ) |
EMPLOYEE RELATED LIABILITIES (T
EMPLOYEE RELATED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Postretirement Medicare Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Periodic Benefit Cost | The components of the net periodic benefit cost and other amounts recognized in other comprehensive income for post-retirement medical plan expense are as follows: Year ended December 31, 2019 2018 2017 Net periodic benefit cost: Service cost $ 7 $ 10 $ 9 Interest cost 72 73 69 Amortization of prior service costs -- -- -- Amortization of net loss (gain) (298 ) (262 ) (361 ) Total net periodic benefit cost (219 ) $ (179 ) $ (283 ) Other changes in plan assets and benefits obligations recognized in other comprehensive income: Prior service cost for the period $ -- $ -- $ -- Net loss (gain) for the period (1 ) (376 ) 317 Amortization of prior service costs -- -- -- Amortization of net gain (loss) 298 262 361 Total recognized in other comprehensive income (loss) $ 297 $ (114 ) $ 678 Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 78 $ (293 ) $ 395 Weighted average assumptions used: Discount rate 4.50 % 3.80 % 4.50 % Expected return on plan assets N/A N/A N/A Rate of compensation increases N/A N/A N/A Assumed health care cost trend rates: Health care cost trend rate assumed for current year (Pre-65/Post-65 Medicare Advantage) 6.90%/13.10 % 8.30%/11.10 % 7.20%/10.00 % Health care cost trend rate assumed for current year (Pre-65/Post-65 Non Medicare Advantage) 6.90%/7.90 % N/A N/A Ultimate rate (Pre-65/Post-65) 4.50%/4.50 % 4.50%/4.50 % 4.50%/4.50 % Year the ultimate rate is reached (Pre-65/Post-65) 2029/2029 2027/2027 2025/2025 Measurement date December 31, 2019 December 31, 2018 December 31, 2017 |
Schedule of Impact of One-Percentage-Point Change in Assumed Health Care Cost | Impact of one-percentage point change in assumed health care cost trend rates as of December 31, 2019: Increase Decrease Effect on service cost and interest cost $ 2 $ (2 ) Effect on post-retirement benefit obligation $ 33 $ (25 ) |
Schedule of changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status | The components of the change in benefit obligation, change in plan assets and funded status for post-retirement medical plan are as follows: Year ended December 31, 2019 2018 2017 Change in medical plan related benefit obligation: Medical plan related benefit obligation at beginning of period $ 1,628 $ 1,936 $ 1,550 Service cost 7 10 9 Interest cost 72 73 69 Benefits paid (17 ) (15 ) (9 ) Change in medical plan provisions -- -- -- Actuarial loss (gain) (1 ) (376 ) 317 Benefit medical plan related obligation end of period $ 1,689 $ 1,628 $ 1,936 Change in plan assets: Fair value of plan assets at beginning of period $ -- $ -- $ -- Employer contribution 16 15 9 Benefits paid (16 ) (15 ) (9 ) Fair value of plan assets at end of period $ -- $ -- $ -- Medical plan related net funding $ (1,689 ) $ (1,628 ) $ (1,936 ) F - 34 TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (dollars in thousands, except per share data) NOTE 13 - EMPLOYEE RELATED LIABILITIES (Cont.) B. Jazz Employee Benefit Plans (Cont.) Post-Retirement Medical Plan (Cont.) As of December 31, 2019 2018 2017 Amounts recognized in statement of financial position: Current liabilities $ (50 ) $ (65 ) $ (58 ) Non-current liabilities (1,639 ) (1,563 ) (1,878 ) Net amount recognized $ (1,689 ) $ (1,628 ) $ (1,936 ) Weighted average assumptions used: Discount rate 3.40 % 4.50 % 3.80 % Rate of compensation increases N/A N/A N/A Assumed health care cost trend rates: Health care cost trend rate assumed for next year (pre 65/ post 65 Medicare Advantage) 6.20%/(5.00 )% 6.90%/13.10 % 8.30%/11.10 % Health care cost trend rate assumed for next year (pre 65/ post 65 Non Medicare Advantage) 6.20%/6.10 % 6.90%/7.90 % 8.30%/11.10 % Ultimate rate (pre 65/ post 65) 4.50%/4.50 % 4.50%/4.50 % 4.50%/4.50 % Year the ultimate rate is reached (pre 65/ post 65) 2029/2029 2029/2029 2027/2027 |
Schedule of Future Benefit Payments | The following benefit payments are expected to be paid in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter: Fiscal Year Other Benefits 2020 $ 50 2021 54 2022 54 2023 55 2024 61 2025-2029 $ 365 |
Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Net Periodic Benefit Cost | The components of the change in benefit obligation, the change in plan assets and funded status for Jazz’s pension plan are as follows: Year ended December 31, 2019 2018 2017 Net periodic benefit cost: Interest cost $ 817 $ 749 $ 831 Expected return on plan assets (930 ) (1,427 ) (1,236 ) Expected Administrative Expenses 100 -- -- Amortization of prior service costs 3 3 3 Amortization of net loss (gain) -- -- 55 Total net periodic benefit cost $ (10 ) $ (675 ) $ (347 ) Other changes in plan assets and benefits obligations recognized in other comprehensive income: Prior service cost for the period $ -- $ -- $ -- Net loss (gain) for the period 1,158 (231 ) (1,303 ) Amortization of prior service costs (3 ) (3 ) (3 ) Amortization of net gain (loss) -- -- (55 ) Total recognized in other comprehensive income (loss) $ 1,155 $ (234 ) $ (1,361 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 1,145 $ (909 ) $ (1,708 ) Weighted average assumptions used: Discount rate 4.40 % 3.70 % 4.30 % Expected return on plan assets 4.20 % 6.20 % 6.20 % Rate of compensation increases N/A N/A N/A |
Schedule of Estimated Amounts in Accumulated Other Comprehensive Income to be Recognized over the Next Fiscal Year | Year ended December 31, 2019 2018 2017 Estimated amounts that will be amortized from accumulated other comprehensive income in the next fiscal year ending : Prior service cost $ 3 $ 3 $ 3 Net actuarial loss $ 27 $ -- $ -- |
Schedule of changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status | The components of the change in benefit obligation, change in plan assets and funded status for Jazz’s pension plan are as follows: Year ended December 31, 2019 2018 2017 Change in benefit obligation: Benefit obligation at beginning of period $ 18,979 $ 20,629 $ 19,672 Interest cost 817 749 831 Benefits paid (688 ) (607 ) (548 ) Change in plan provisions -- -- -- Actuarial loss (gain) 2,800 (1,792 ) 674 Benefit obligation end of period $ 21,908 $ 18,979 $ 20,629 Change in plan assets: Fair value of plan assets at beginning of period $ 22,669 $ 23,235 $ 19,871 Actual return on plan assets 2,544 (133 ) 3,212 Employer contribution -- 175 700 Expenses paid (71 ) -- -- Benefits paid (688 ) (607 ) (548 ) Fair value of plan assets at end of period $ 24,454 $ 22,670 $ 23,235 Funded status $ 2,546 $ 3,691 $ 2,606 Amounts recognized in statement of financial position: Non-current assets $ 2,546 $ 3,691 $ 2,606 Non-current liabilities -- -- -- Net amount recognized $ 2,546 $ 3,691 $ 2,606 Weighted average assumptions used: Discount rate 3.20% 4.40% 3.70% Rate of compensation increases N/A N/A N/A |
Schedule of Future Benefit Payments | The following benefit payments are expected to be paid in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter: Fiscal Year Other Benefits 2020 $ 859 2021 932 2022 1,017 2023 1,085 2024 1,142 2025-2029 $ 6,144 |
Schedule of Weighted Average Asset Allocations | The plan’s assets measured at fair value on a recurring basis consisted of the following as of December 31, 2019: Level 1 Level 2 Level 3 Investments in mutual funds $ -- $ 24,454 $ -- Total plan assets at fair value $ -- $ 24,454 $ -- The plan’s assets measured at fair value on a recurring basis consisted of the following as of December 31, 2018: Level 1 Level 2 Level 3 Investments in mutual funds $ -- $ 22,670 $ -- Total plan assets at fair value $ -- $ 22,670 $ -- |
Schedule of Assets Measured at Fair Value on a Recurring Basis | Jazz’s pension plan weighted average asset allocations on December 31, 2019, by asset category are as follows: Asset Category December 31, 2019 Target allocation 2020 Equity securities 23 % 20 % Debt securities 77 % 80 % Total 100 % 100 % |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Option Activity | i. Share Options awards: 2019 2018 2017 Number of share options Weighted average exercise price Number of share options Weighted average exercise price Number of share options Weighted average exercise price Outstanding as of beginning of year 508,493 $ 9.58 580,185 $ 9.64 2,278,089 $ 9.92 Granted -- -- -- -- -- Exercised (163,375 ) 11.28 (70,271 ) 10.19 (1,611,489 ) 9.27 Terminated (667 ) 9.90 (921 ) 9.82 (77,292 ) 25.89 Forfeited (1,000 ) 4.42 (500 ) 4.42 (9,123 ) 8.06 Outstanding as of end of year 343,451 8.79 508,493 9.58 580,185 9.64 Options exercisable as of end of year 343,451 8.79 485,579 $ 9.46 459,662 $ 8.51 |
Schedule of Restricted Shares Units Activity | ii. RSU awards: 2019 2018 2017 Number of RSU Weighted Average Fair Value Number of RSU Weighted Average Fair Value Number of RSU Weighted Average Fair Value Outstanding as of beginning of year 1,599,296 $ 22.27 1,245,889 $ 21.29 1,009,184 $ 14.62 Granted 1,159,881 18.06 977,667 20.80 818,856 24.88 Converted (484,665 ) 23.91 (602,423 ) 17.86 (553,241 ) 14.71 Forfeited (260,899 ) 21.19 (21,837 ) 22.11 (28,910 ) 16.42 Outstanding as of end of year 2,013,613 $ 19.13 1,599,296 $ 22.27 1,245,889 $ 21.29 |
Schedule of Information about Share Options Outstanding | The following table summarizes information about employees’ share options outstanding as of December 31, 2019: Outstanding Exercisable Range of exercise prices Number outstanding Weighted average remaining contractual life (in years) Weighted average exercise price Number exercisable Weighted average exercise price $ 4.42 - 17.25 343,451 1.78 $ 8.79 343,451 $ 8.79 |
Schedule of Intrinsic and Fair Values for Options Exercised | Year ended December 31, 2019 2018 2017 The intrinsic value of options exercised $ 1,824 $ 1,416 $ 26,031 The original fair value of options exercised $ 665 $ 302 $ 7,202 |
Schedule of Intrinsic and Fair Values for RSU's Exercised | Year ended December 31, 2019 2018 2017 The intrinsic value of converted RSUs $ 8,207 $ 15,840 $ 12,996 The original fair value of converted RSUs $ 11,588 $ 10,761 $ 8,138 |
Schedule of Stock-Based Compensation Expense in Statement of Operations | Stock-based compensation expenses were recognized in the Statement of Operations as follows: Year ended December 31, 2019 2018 2017 Cost of goods $ 4,529 $ 3,141 $ 3,084 Research and development, net 2,900 2,533 2,555 Marketing, general and administrative 7,119 6,987 6,010 Total stock-based compensation expense $ 14,548 $ 12,661 $ 11,649 |
INFORMATION ON GEOGRAPHIC ARE_2
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Area | A. Revenues by Geographic Area - as Percentage of Total Revenue Year ended December 31, 2019 2018 2017 USA 52 % 52 % 52 % Japan 29 34 32 Asia * 15 10 12 Europe 4 4 4 Total 100 % 100 % 100 % * Represents revenues from individual countries of less than 10% each. |
Schedule of Long-Lived Assets by Geographic Area | Substantially all of Tower’s long-lived assets are located in Israel, substantially all of Jazz’s and TJT’s long-lived assets are located in the United States and substantially all of TPSCo’s long-lived assets are located in Japan. As of December 31, 2019 2018 Israel $ 219,479 $ 215,419 United States 248,453 239,462 Japan 214,007 202,353 Total $ 681,939 $ 657,234 |
Schedule of Revenues of Major Customers | D. Major Customers - as Percentage of Total Revenue Year ended December 31, 2019 2018 2017 Customer A 27 % 33 % 30 % Customer B 5 7 12 Other customers * 27 16 15 * Represents aggregated revenue to four customers accounted between 5% and 9% of revenue during 2019, to two customers accounted for 7% and 9% of revenue during 2018, and to two customers accounted for 7% and 8% of revenue during 2017. |
FINANCING EXPENSE (INCOME), N_2
FINANCING EXPENSE (INCOME), NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Financing Expense | Financing expense (income), net consists of the following: Year ended December 31, 2019 2018 2017 Interest expense $ 6,823 $ 10,610 $ 12,623 Interest income (12,949 ) (10,762 ) (4,783 ) Jazz Notes amortization -- 5,010 4,230 Series G Debentures amortization, related rate differences and hedging results 3,299 3,589 2,738 Exchange rate differences 968 1,064 6 Bank fees and others 1,847 3,673 633 $ (12 ) $ 13,184 $ 15,447 |
RELATED PARTIES BALANCES AND _2
RELATED PARTIES BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Balances and Transactions | A. Balance: The nature of the relationship involved As of December 31, 2019 2018 Long-term investment Equity investment in a limited partnership $ 55 $ 110 B. Transactions: Description of the transactions Year ended December 31, 2019 2018 2017 General and Administrative expense Directors’ fees and reimbursement to directors $ 783 $ 736 $ 719 Other income (expense), net Non-controlling interest income (loss) from a limited Partnership $ (55 ) $ 44 $ 29 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The Company’s income tax provision is as follows: Year ended December 31, 2019 2018 2017 Current tax expense: Local -- $ 2,164 $ 3,622 Foreign (*) 1,013 9,273 6,070 Deferred tax expense (benefit): Local (see F below) 7,098 9,316 (82,370 ) Foreign(*) (see E below) (5,163 ) (14,815 ) (27,210 ) Income tax expense (benefit) $ 2,948 $ 5,938 $ (99,888 ) |
Schedule of Profit (Loss) Before Taxes | Year ended December 31, 2019 2018 2017 Profit (loss) before taxes: Domestic $ 103,432 $ 142,831 $ 198,008 Foreign (*) (12,411 ) (3,514 ) 3,760 Total profit before taxes $ 91,021 $ 139,317 $ 201,768 (*) Foreign are amounts related to Tower’s Japanese and US subsidiaries. |
Schedule of Deferred Tax Asset/Liability | The following is a summary of the components of the deferred tax assets and liabilities reflected in the balance sheets as of the respective dates (*) As of December 31, 2019 2018 Deferred tax asset and liability - long-term: Deferred tax assets: Net operating loss carryforward $ 78,783 $ 87,325 Employees benefits and compensation 4,819 4,914 Accruals and reserves 3,341 4,738 Research and development 15,276 12,292 Others 5,068 3,615 107,287 112,884 Valuation allowance, see F below (7,266 ) (5,834 ) Deferred tax assets $ 100,021 $ 107,050 Deferred tax liabilities- long-term: Depreciation and amortization (77,966 ) (82,001 ) Gain on TPSCo acquisition -- (1,240 ) Others (931 ) (750 ) Deferred tax liabilities $ (78,897 ) $ (83,991 ) Presented in long term deferred tax assets $ 66,362 $ 73,460 Presented in long term deferred tax liabilities $ (45,238 ) $ (50,401 ) (*) Deferred tax assets and liabilities relating to Tower for the years 2019 and 2018 are computed based on the Israeli preferred enterprise tax rate of 7.5%. |
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Unrecognized tax benefits Balance at January 1, 2019 $ 14,783 Additions for tax positions of current year 778 Reduction due to statute of limitation of prior years (448 ) Balance at December 31, 2019 $ 15,113 Unrecognized tax benefits Balance at January 1, 2018 $ 15,286 Additions for tax positions of current year 716 Reduction due to statute of limitation of prior years (1,219 ) Balance at December 31, 2018 $ 14,783 Unrecognized tax benefits Balance at January 1, 2017 $ 8,969 Additions for tax positions 8,753 Reduction of prior years’ provision (2,436 ) Balance at December 31, 2017 $ 15,286 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the statutory tax rate to the effective tax rate is as follows: Year ended December 31, 2019 2018 2017 Tax expense computed at statutory rates, see (*) below $ 20,935 $ 32,044 $ 48,433 Effect of tax rate change on deferred tax liabilities, net (**) 314 (478 ) (16,078 ) Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit (16,396 ) (23,150 ) (33,298 ) Change in Valuation allowance, see F below (962 ) (82,772 ) Tax benefits for which deferred taxes were not recorded, see F below -- -- (15,103 ) Permanent differences and other, net (1,905 ) (1,516 ) (1,070 ) Income tax expense (benefit) $ 2,948 $ 5,938 $ (99,888 ) (*) The tax expense (benefit) was computed based on Tower’s regular corporate tax rate of 23% for 2019, 23% for 2018 and 24% for 2017. (**) Reduction in tax rates due to the U.S. Tax Reform and reduction in income tax rates in Japan. |
DESCRIPTION OF BUSINESS AND G_2
DESCRIPTION OF BUSINESS AND GENERAL (Details) | Dec. 31, 2019 |
TPSCo [Member] | |
Property, Plant and Equipment [Line Items] | |
Percentage of interests acquired | 51.00% |
PSCS [Member] | |
Property, Plant and Equipment [Line Items] | |
Percentage of interests acquired | 49.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful account | $ 10,925 | $ 4,208 |
ROU assets | 17,828 | |
Operating lease liabilities | 17,828 | |
Major Customer Far East Region [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful account | $ 10,000 | $ 3,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Land and Buildings and building improvements, including facility infrastructure [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated economic life | 10 years |
Land and Buildings and building improvements, including facility infrastructure [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated economic life | 25 years |
Machinery and equipment, software and hardware [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated economic life | 3 years |
Machinery and equipment, software and hardware [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated economic life | 15 years |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 90,605 | $ 72,144 |
Work in process | 91,537 | 92,047 |
Finished goods | 10,114 | 6,587 |
Inventory, net, total | 192,256 | 170,778 |
Aggregate inventory write-downs | $ 649 | $ 1,206 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Tax receivables | $ 8,156 | $ 3,997 |
Prepaid expenses | 8,265 | 14,170 |
Accrued interest on bank deposits and other receivables | 5,598 | 4,585 |
Other current assets | $ 22,019 | $ 22,752 |
LONG-TERM INVESTMENTS (Details)
LONG-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||
Severance-pay funds | $ 11,860 | $ 13,615 |
Long-term bank deposit | 12,500 | 12,500 |
Investments in privately- held companies | 15,725 | 9,830 |
Long-term investments, total | $ 40,085 | $ 35,945 |
PROPERTY AND EQUIPMENT, NET (Na
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Aggregate investment grants received | $ 285,615 | $ 285,636 |
Original cost - machinery and equipment | 86,087 | 54,873 |
Depreciation expense | $ 9,941 | $ 2,102 |
PROPERTY AND EQUIPMENT, NET (Sc
PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Original cost: | $ 3,048,113 | $ 2,830,407 | |
Accumulated depreciation | (2,366,174) | (2,173,173) | |
Property and equipment, net | 681,939 | 657,234 | |
Land and Buildings and building improvements, including facility infrastructure [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Original cost: | 363,133 | 347,798 | |
Accumulated depreciation | (239,241) | (224,796) | |
Machinery and equipment, software and hardware [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Original cost: | [1] | 2,684,980 | 2,482,609 |
Accumulated depreciation | $ (2,126,933) | $ (1,948,377) | |
[1] | Original cost of machinery and equipment includes ROU assets under capital lease in the amount of $86,087 and $54,873 as of December 31, 2019 and 2018, respectively. The depreciation expense of such assets amounted to $9,941 and $2,102 for the years ended December 31, 2019 and 2018, respectively. |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 154,910 | $ 154,606 |
Accumulated Amortization | (144,629) | (141,171) |
Net | $ 10,281 | $ 13,435 |
Technologies [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 4 years | 4 years |
Cost | $ 111,108 | $ 110,835 |
Accumulated Amortization | (110,730) | (108,888) |
Net | $ 378 | $ 1,947 |
Technologies One [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 5 years | 5 years |
Technologies Two [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 9 years | 9 years |
Facilities lease [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 19 years | 19 years |
Cost | $ 33,500 | $ 33,500 |
Accumulated Amortization | (24,241) | (22,953) |
Net | $ 9,259 | 10,547 |
Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 9 years | |
Cost | $ 7,702 | 7,671 |
Accumulated Amortization | (7,702) | (7,547) |
Net | $ 124 | |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 15 years | 15 years |
Cost | $ 2,600 | $ 2,600 |
Accumulated Amortization | (1,956) | (1,783) |
Net | $ 644 | $ 817 |
Patents and other core technology rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 9 years |
DEFERRED TAX AND OTHER LONG-T_3
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET (Schedule of Deferred Tax and Other Long-Term Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Deferred tax asset (see Note 19) | [1] | $ 66,362 | $ 73,460 |
Right of use - assets under operating leases | 17,828 | ||
Prepaid long-term land lease, net | 3,175 | 3,296 | |
Fair value of cross currency interest rate swap (see Note 12D) | 12,625 | 6,722 | |
Long-term prepaid expenses and others | 5,057 | 4,926 | |
Deferred tax and other assets, net | $ 105,047 | $ 88,404 | |
[1] | Deferred tax assets and liabilities relating to Tower for the years 2019 and 2018 are computed based on the Israeli preferred enterprise tax rate of 7.5%. |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Liabilities, Current [Abstract] | ||
Tax payables | $ 282 | $ 12,096 |
Interest payable | 1,057 | 986 |
Others | 5,962 | 4,035 |
Total other current liabilities | $ 7,301 | $ 17,117 |
DEBENTURES (Narrative) (Details
DEBENTURES (Narrative) (Details) ₪ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019ILS (₪) | Dec. 31, 2018ILS (₪) | |
Debt Instrument [Line Items] | ||||||
Proceeds from non-convertible debentures | $ 98,990 | |||||
Debentures Series G [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from non-convertible debentures | $ 115,000 | |||||
Principal amount | $ 135,000 | $ 125,000 | ||||
Interest rate | 2.79% | 2.79% | 2.79% | 2.79% | ||
Number of installment payments | item | 7 | |||||
Hedging transactions asset fair value | $ 16,000 | $ 5,000 | ||||
Debentures Series G [Member] | Israel, New Shekels INS [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | ₪ | ₪ 468,000 | ₪ 468,000 |
DEBENTURES (Schedule of Maturit
DEBENTURES (Schedule of Maturities of Debentures) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Repayment schedule (carrying amount): | ||
Accretion of carrying amount to principal amount | $ (3,134) | $ (4,697) |
Carrying amount | $ 132,283 | $ 120,170 |
Debentures Series G [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.79% | 2.79% |
Repayment schedule (carrying amount): | ||
2019 | ||
2020 | $ 38,690 | 35,676 |
2021 | 38,690 | 35,676 |
2022 | 38,690 | 35,676 |
2023 | 19,347 | 17,839 |
Total | $ 135,417 | $ 124,867 |
OTHER LONG-TERM DEBT (Credit Li
OTHER LONG-TERM DEBT (Credit Line) (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | ||||
Outstanding capital lease liability | $ 60,277 | $ 47,195 | ||
Outstanding capital lease liability, current | 21,070 | 10,814 | ||
Operating lease cost | $ 8,113 | |||
Jazz [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Term | 5 years | 5 years | ||
Maximum borrowing amount | $ 70,000 | |||
Borrowing capacity | $ 70,000 | 70,000 | ||
Letters of credit outstanding amount | $ 1,000 | |||
Maturity date | Dec. 31, 2018 | |||
Minimum [Member] | Jazz [Member] | Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread over variable interest rate | 0.00% | |||
Minimum [Member] | Jazz [Member] | LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread over variable interest rate | 1.25% | |||
Maximum [Member] | Jazz [Member] | Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread over variable interest rate | 0.50% | |||
Maximum [Member] | Jazz [Member] | LIBOR [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread over variable interest rate | 1.75% | |||
Office space operating facilities and vehicles [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Operating lease cost | $ 8,045 | $ 8,773 | $ 8,809 | |
TPSCo [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Annual interest rate on lease | 1.95% | |||
TPSCo [Member] | Machinery and Equipment [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Capital lease term | 3 years |
OTHER LONG-TERM DEBT (Schedule
OTHER LONG-TERM DEBT (Schedule of Other Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Operating leases - see E below | $ 10,697 | |
Tower's loans (including current maturities) [Member] | ||
Debt Instrument [Line Items] | ||
Capital leases - see Note D below | 60,277 | $ 47,195 |
Operating leases - see E below | 17,828 | |
Less - current maturities of long-term debt | (28,201) | (10,814) |
Fair value | 151,269 | 136,499 |
Tower's loans (including current maturities) [Member] | JPY [Member] | ||
Debt Instrument [Line Items] | ||
Long-term JPY bank loan - principal amount, see B and C below | $ 101,365 | $ 100,118 |
OTHER LONG-TERM DEBT (Schedul_2
OTHER LONG-TERM DEBT (Schedule of Repayment of Loan) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total outstanding principal amounts of loans [Member] | ||
Repayment schedule (carrying amount): | ||
2019 | ||
2020 | ||
2021 | 22,526 | 22,248 |
2022 | 22,526 | 22,248 |
2023 | 22,526 | |
2023 and on | 55,622 | |
2024 and on | 33,787 | |
Total | $ 101,365 | $ 100,118 |
JPY [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.95 | 1.95 |
Repayment schedule (carrying amount): | ||
2019 | ||
2020 | ||
2021 | 22,526 | 22,248 |
2022 | 22,526 | 22,248 |
2023 | 22,526 | |
2023 and on | 55,622 | |
2024 and on | 33,787 | |
Total | $ 101,365 | $ 100,118 |
OTHER LONG-TERM DEBT (Loans to
OTHER LONG-TERM DEBT (Loans to TPSCo from Japanese Institutions) (Narrative) (Details) - 12 months ended Dec. 31, 2019 - TPSCo [Member] $ in Thousands, ¥ in Billions | USD ($) | JPY (¥) |
Debt Instrument [Line Items] | ||
Outstanding principal | $ 100,000 | |
Term Loan 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding principal | $ 101,000 | |
Basis spread over variable interest rate | 1.95% | |
Term Loan 2018 [Member] | JPY [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding principal | ¥ | ¥ 11 |
OTHER LONG-TERM DEBT (Schedul_3
OTHER LONG-TERM DEBT (Schedule of Maturity Capital Leases Liabilities) (Details) - USFRF [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | |
2020 | $ 21,070 |
2021 | 16,332 |
2022 | 14,386 |
2023 | 7,684 |
2024 | 805 |
Total | $ 60,277 |
OTHER LONG-TERM DEBT (Schedul_4
OTHER LONG-TERM DEBT (Schedule of Composition of Operating Leases) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Lessee Disclosure [Abstract] | ||
Right of use - assets under operating leases | $ 17,828 | |
Current operating leases liabilities | 7,131 | |
Long-term operating lease liabilities | 10,697 | |
Total operating lease liabilities | $ 17,828 | |
Weighted average remaining lease term (years) | 4 years 10 months 24 days | |
Weighted average discount rate | 1.95% |
OTHER LONG-TERM DEBT (Schedul_5
OTHER LONG-TERM DEBT (Schedule of Maturity Operating Leases Liabilities) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 7,131 |
2021 | 6,304 |
2022 | 2,064 |
2023 | 645 |
2024 | 645 |
Thereafter | 1,667 |
Total | 18,456 |
Less - imputed interest | (628) |
Total | $ 17,828 |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of swap in asset position | $ 15,642 | $ 4,951 | |
Fair value of swap in short-term liabilities | 3,017 | 1,771 | |
Fair value of swap in long-term asset | 12,625 | 6,722 | |
Effective portion of unrealized gains recorded in OCI | 1,504 | 1,329 | |
Gain (loss) of hedge on operations | 8,816 | 11,787 | |
Long term bank deposit amount | 12,500 | 12,500 | |
Marketable securities | 176,070 | 135,850 | |
Short term deposit | 215,609 | 120,079 | |
Investment income (expense) | 5,270 | 5,000 | |
Subsequent Event [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amount of loss expected to be reclassified into earnings currently recorded as other comprehensive income, as a result of the maturity of currently held forward exchange contracts | $ 719 | ||
Tower US Holdings [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value liability face amount | 36,000 | 42,000 | |
Fair value of derivative liabilities | 318 | 16 | |
Tower and Jazz Debentures [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of debentures | 140,000 | 127,000 | |
Carrying amount | 132,000 | 120,000 | |
Fair value liability face amount | 48,000 | 92,000 | |
Fair value of derivative assets | $ 167 | $ 379 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Schedule of Recurring Fair Value Measurements) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities held for sale | $ 175,305 | $ 135,227 |
Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap - net asset position | 15,642 | 4,951 |
Privately-held companies | 15,725 | 9,830 |
Marketable securities held for sale | 175,305 | 135,227 |
Foreign exchange forward and cylinders - liability position | (151) | (395) |
Total assets and liabilities | 206,521 | 149,613 |
Recurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap - net asset position | ||
Privately-held companies | ||
Marketable securities held for sale | 175,305 | 135,227 |
Foreign exchange forward and cylinders - liability position | ||
Total assets and liabilities | 175,305 | 135,227 |
Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap - net asset position | 15,642 | 4,951 |
Marketable securities held for sale | ||
Foreign exchange forward and cylinders - liability position | (151) | (395) |
Total assets and liabilities | 15,491 | 4,556 |
Recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap - net asset position | ||
Privately-held companies | 15,725 | 9,830 |
Marketable securities held for sale | ||
Foreign exchange forward and cylinders - liability position | ||
Total assets and liabilities | $ 15,725 | $ 9,830 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Schedule of Marketable Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Estimated fair value | $ 175,305 | $ 135,227 | ||
Gross unrealized gains | 1,702 | 50 | ||
Gross Unrealized losses | (214) | (2,083) | ||
Amortized cost | 173,817 | [1] | 137,260 | [2] |
Accrued interest | 765 | 623 | ||
Corporate bonds [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Estimated fair value | 155,226 | 109,639 | ||
Gross unrealized gains | 1,273 | 29 | ||
Gross Unrealized losses | (214) | (2,029) | ||
Amortized cost | 154,167 | [1] | 111,639 | [2] |
U.S government bonds [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Estimated fair value | 2,003 | 5,465 | ||
Gross unrealized gains | 26 | 21 | ||
Gross Unrealized losses | ||||
Amortized cost | 1,977 | [1] | 5,444 | [2] |
Non-U.S government bonds [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Estimated fair value | 1,003 | 2,423 | ||
Gross unrealized gains | 11 | |||
Gross Unrealized losses | (33) | |||
Amortized cost | 992 | [1] | 2,456 | [2] |
Municipal bonds [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Estimated fair value | 1,229 | 2,235 | ||
Gross unrealized gains | 21 | |||
Gross Unrealized losses | (13) | |||
Amortized cost | 1,208 | [1] | 2,248 | [2] |
Money market fund [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Estimated fair value | 15,591 | 15,225 | ||
Gross unrealized gains | 366 | |||
Gross Unrealized losses | ||||
Amortized cost | 15,225 | [1] | 15,225 | [2] |
Certificate of deposits [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Estimated fair value | 253 | 240 | ||
Gross unrealized gains | 5 | |||
Gross Unrealized losses | (8) | |||
Amortized cost | $ 248 | [1] | $ 248 | [2] |
[1] | Excluding accrued interest of $765 | |||
[2] | Excluding accrued interest of $623. |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Schedule of Maturities of Marketable Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | ||
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | ||||
Due within one year, Amortized cost | $ 37,845 | $ 16,686 | ||
Due after one year through five years, Amortized cost | 135,972 | 120,574 | ||
Due within one year, Estimated fair value | 37,818 | 16,661 | ||
Due after one year through five years, Estimated fair value | 137,487 | 118,566 | ||
Amortized cost | 173,817 | [1] | 137,260 | [2] |
Estimated fair value | $ 175,305 | $ 135,227 | ||
[1] | Excluding accrued interest of $765 | |||
[2] | Excluding accrued interest of $623. |
FINANCIAL INSTRUMENTS AND FAI_7
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Schedule of Investments with Continuous Unrealized Losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments with continuous unrealized losses for less than 12 months, Fair value | $ 8,562 | $ 22,914 |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | (56) | (153) |
Investments with continuous unrealized losses losses for 12 months or greater, Fair value | 23,022 | 81,309 |
Investments with continuous unrealized losses losses for 12 months or greater, Unrealized losses | (158) | (1,930) |
Total Investments with continuous unrealized losses, Fair value | 31,584 | 104,223 |
Total Investments with continuous unrealized losses, Unrealized losses | (214) | (2,083) |
Corporate bonds [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments with continuous unrealized losses for less than 12 months, Fair value | 8,562 | 19,716 |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | (56) | (140) |
Investments with continuous unrealized losses losses for 12 months or greater, Fair value | 23,022 | 79,609 |
Investments with continuous unrealized losses losses for 12 months or greater, Unrealized losses | (158) | (1,889) |
Total Investments with continuous unrealized losses, Fair value | 31,584 | 99,325 |
Total Investments with continuous unrealized losses, Unrealized losses | (214) | (2,029) |
Non-U.S government bonds [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments with continuous unrealized losses for less than 12 months, Fair value | 963 | |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | ||
Investments with continuous unrealized losses losses for 12 months or greater, Fair value | 1,460 | |
Investments with continuous unrealized losses losses for 12 months or greater, Unrealized losses | (33) | |
Total Investments with continuous unrealized losses, Fair value | 2,423 | |
Total Investments with continuous unrealized losses, Unrealized losses | (33) | |
Municipal bonds [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments with continuous unrealized losses for less than 12 months, Fair value | 2,235 | |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | (13) | |
Investments with continuous unrealized losses losses for 12 months or greater, Fair value | ||
Investments with continuous unrealized losses losses for 12 months or greater, Unrealized losses | ||
Total Investments with continuous unrealized losses, Fair value | 2,235 | |
Total Investments with continuous unrealized losses, Unrealized losses | (13) | |
Certificate of deposits [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments with continuous unrealized losses for less than 12 months, Fair value | ||
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | ||
Investments with continuous unrealized losses losses for 12 months or greater, Fair value | 240 | |
Investments with continuous unrealized losses losses for 12 months or greater, Unrealized losses | (8) | |
Total Investments with continuous unrealized losses, Fair value | 240 | |
Total Investments with continuous unrealized losses, Unrealized losses | $ (8) |
EMPLOYEE RELATED LIABILITIES (N
EMPLOYEE RELATED LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Severance pay fund, Israeli employees | $ 9,314 | ||
Long-term employee liabilties, Israeli employees | 11,638 | ||
Israeli employee termination benefits | $ 5,597 | $ 5,158 | $ 5,059 |
TPSCo [Member] | |||
Matching contribution (as a percent) | 9.00% | ||
Employee contribution (as a percent) | 1.00% | ||
Cost recognized | $ 6,572 | $ 6,700 | $ 6,706 |
EMPLOYEE RELATED LIABILITIES (S
EMPLOYEE RELATED LIABILITIES (Schedule of Components of Net Periodic Benefit Cost Recognized in Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Postretirement Medicare Plan [Member] | |||
Net periodic benefit cost | |||
Service cost | $ 7 | $ 10 | $ 9 |
Interest cost | 72 | 73 | 69 |
Amortization of prior service costs | |||
Amortization of net loss (gain) | (298) | (262) | (361) |
Total net periodic benefit cost | (219) | (179) | (283) |
Other changes in plan assets and benefits obligations recognized in other comprehensive income: | |||
Prior service cost for the period | |||
Net loss (gain) for the period | (1) | (376) | 317 |
Amortization of prior service costs | |||
Amortization of net gain (loss) | 298 | 262 | 361 |
Total recognized in other comprehensive income (loss) | 297 | (114) | 678 |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ 78 | $ (293) | $ 395 |
Weighted average assumptions used: | |||
Discount rate | 4.50% | 3.80% | 4.50% |
Expected return on plan assets | |||
Rate of compensation increases | |||
Assumed health care cost trend rates: | |||
Measurement date | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Postretirement Medicare Plan [Member] | Pre 65 [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for current year, medicare advantage | 6.90% | 8.30% | 7.20% |
Health care cost trend rate assumed for current year, non-medicare advantage | 6.90% | ||
Ultimate rate | 4.50% | 4.50% | 4.50% |
Year the ultimate rate is reached | 2029 | 2027 | 2025 |
Postretirement Medicare Plan [Member] | Post 65 [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for current year, medicare advantage | 13.10% | 11.10% | 10.00% |
Health care cost trend rate assumed for current year, non-medicare advantage | 7.90% | ||
Ultimate rate | 4.50% | 4.50% | 4.50% |
Year the ultimate rate is reached | 2029 | 2027 | 2025 |
Pension Plan [Member] | |||
Net periodic benefit cost | |||
Interest cost | $ 817 | $ 749 | $ 831 |
Expected return on the plan's assets | (930) | (1,427) | (1,236) |
Expected Administrative Expenses | 100 | ||
Amortization of prior service costs | 3 | 3 | 3 |
Amortization of net loss (gain) | 55 | ||
Total net periodic benefit cost | (10) | (675) | (347) |
Other changes in plan assets and benefits obligations recognized in other comprehensive income: | |||
Prior service cost for the period | |||
Net loss (gain) for the period | 1,158 | (231) | (1,303) |
Amortization of prior service costs | (3) | (3) | (3) |
Amortization of net gain (loss) | (55) | ||
Total recognized in other comprehensive income (loss) | 1,155 | (234) | (1,361) |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ 1,145 | $ (909) | $ (1,708) |
Weighted average assumptions used: | |||
Discount rate | 4.20% | 3.70% | 4.30% |
Expected return on plan assets | 4.40% | 6.20% | 6.20% |
Rate of compensation increases |
EMPLOYEE RELATED LIABILITIES _2
EMPLOYEE RELATED LIABILITIES (Schedule of Impact of One-Percentage Point Change in Assumed Health Care Cost) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Postemployment Benefits [Abstract] | |
Effect on service cost and interest cost, Increase | $ 2 |
Effect on post-retirement benefit obligation, Increase | 33 |
Effect on service cost and interest cost, Decrease | (2) |
Effect on post-retirement benefit obligation, Decrease | $ (25) |
EMPLOYEE RELATED LIABILITIES _3
EMPLOYEE RELATED LIABILITIES (Schedule of Components of Change in Benefit Obligation, Change in Plan Assets and Funded Status) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Postretirement Medicare Plan [Member] | |||
Change in medical plan related benefit obligation: | |||
Benefit obligation at beginning of period | $ 1,628 | $ 1,936 | $ 1,550 |
Service cost | 7 | 10 | 9 |
Interest cost | 72 | 73 | 69 |
Benefits paid | (17) | (15) | (9) |
Change in medical plan provisions | |||
Actuarial loss (gain) | (1) | (376) | 317 |
Benefit obligation end of period | 1,689 | 1,628 | 1,936 |
Change in plan assets: | |||
Fair value of plan assets at beginning of period | |||
Employer contribution | 16 | 15 | 9 |
Benefits paid | (16) | (15) | (9) |
Fair value of plan assets at end of period | |||
Funded status | (1,689) | (1,628) | (1,936) |
Pension Plan [Member] | |||
Change in medical plan related benefit obligation: | |||
Benefit obligation at beginning of period | 18,979 | 20,629 | 19,672 |
Interest cost | 817 | 749 | 831 |
Benefits paid | (688) | (607) | (548) |
Change in medical plan provisions | |||
Actuarial loss (gain) | 2,800 | (1,792) | 674 |
Benefit obligation end of period | 21,908 | 18,979 | 20,629 |
Change in plan assets: | |||
Fair value of plan assets at beginning of period | 22,670 | 23,235 | 19,871 |
Actual return on plan assets | 2,544 | (133) | 3,212 |
Employer contribution | 175 | 700 | |
Expenses paid | (71) | ||
Benefits paid | (688) | (607) | (548) |
Fair value of plan assets at end of period | 24,454 | 22,670 | 23,235 |
Funded status | $ 2,546 | $ 3,691 | $ 2,606 |
EMPLOYEE RELATED LIABILITIES _4
EMPLOYEE RELATED LIABILITIES (Schedule of Amounts Recognized in Statement of Financial Position) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Postretirement Medicare Plan [Member] | |||
Amounts recognized in statement of financial position: | |||
Current liabilities | $ (50) | $ (65) | $ (58) |
Non-current liabilities | (1,639) | (1,563) | (1,878) |
Net amount recognized | $ (1,689) | $ (1,628) | $ (1,936) |
Weighted average assumptions used: | |||
Discount rate | 3.40% | 4.50% | 3.80% |
Rate of compensation increases | |||
Pension Plan [Member] | |||
Amounts recognized in statement of financial position: | |||
Non-current assets | $ 2,546 | $ 3,691 | $ 2,606 |
Non-current liabilities | |||
Net amount recognized | $ 2,546 | $ 3,691 | $ 2,606 |
Weighted average assumptions used: | |||
Discount rate | 3.20% | 4.40% | 3.70% |
Rate of compensation increases | |||
Pre 65 [Member] | Postretirement Medicare Plan [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | 6.20% | 6.90% | 8.30% |
Ultimate rate | 4.50% | 4.50% | 4.50% |
Year the ultimate rate is reached | 2029 | 2029 | 2027 |
Pre 65 [Member] | Postretirement Non Medical Plan [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | 6.20% | 6.90% | 8.30% |
Post 65 [Member] | Postretirement Medicare Plan [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | (5.00%) | 13.10% | 11.10% |
Ultimate rate | 4.50% | 4.50% | 4.50% |
Year the ultimate rate is reached | 2029 | 2029 | 2027 |
Post 65 [Member] | Postretirement Non Medical Plan [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | 6.10% | 7.90% | 11.10% |
EMPLOYEE RELATED LIABILITIES _5
EMPLOYEE RELATED LIABILITIES (Schedule of Future Benefit Payments) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Postretirement Medicare Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | $ 50 |
2021 | 54 |
2022 | 54 |
2023 | 55 |
2024 | 61 |
2025-2029 | 365 |
Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 859 |
2021 | 932 |
2022 | 1,017 |
2023 | 1,085 |
2024 | 1,142 |
2025-2029 | $ 6,144 |
EMPLOYEE RELATED LIABILITIES _6
EMPLOYEE RELATED LIABILITIES (Schedule of Estimated Amounts in Accumulated Other Comprehensive Income to be Recognized over the Next Fiscal Year) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Postemployment Benefits [Abstract] | |||
Prior service cost | $ 3 | $ 3 | $ 3 |
Net actuarial loss | $ 27 |
EMPLOYEE RELATED LIABILITIES _7
EMPLOYEE RELATED LIABILITIES (Schedule of Assets Measured at Fair Value) (Details) - Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in mutual funds | ||
Total assets measured at fair value | ||
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in mutual funds | 24,454 | 22,670 |
Total assets measured at fair value | 24,454 | 22,670 |
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in mutual funds | ||
Total assets measured at fair value |
EMPLOYEE RELATED LIABILITIES _8
EMPLOYEE RELATED LIABILITIES (Schedule of Weighted Average Asset Allocations) (Details) | Dec. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | |
Funded percentage | 100.00% |
Target allocation 2020 | 100.00% |
Equity Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Funded percentage | 23.00% |
Target allocation 2020 | 20.00% |
Debt Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Funded percentage | 77.00% |
Target allocation 2020 | 80.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2017 | |
Tacoma [Member] | ||
Operating Leased Assets [Line Items] | ||
Cash received for technological license and consultation | $ 27,000 | $ 18,000 |
SHAREHOLDERS' EQUITY (Ordinary
SHAREHOLDERS' EQUITY (Ordinary Shares) (Narrative) (Details) - ₪ / shares shares in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity Note [Abstract] | ||
Ordinary shares, authorized | 150,000 | 150,000 |
Ordinary shares, par value | ₪ 15 | ₪ 15 |
Ordinary shares, issued | 106,895 | 105,066 |
Ordinary shares, outstanding | 106,808 | 104,979 |
Treasury stock, shares | 87 | 87 |
SHAREHOLDERS' EQUITY (Share Opt
SHAREHOLDERS' EQUITY (Share Option Plans) (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jun. 30, 2019 | Jul. 31, 2018 | Jun. 29, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards outstanding | 1,200,000 | ||||||
Options outstanding | 343,451 | 508,493 | 580,185 | 2,278,089 | |||
RSU's [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards granted | 1,159,881 | 977,667 | 818,856 | ||||
Awards outstanding | 2,013,613 | 1,599,296 | 1,245,889 | 1,009,184 | |||
Old Plans [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options outstanding | 25,000 | 26,000 | |||||
2013 Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options outstanding | 318,000 | 483,000 | |||||
2013 Plan [Member] | Second Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Vesting percentage | 25.00% | ||||||
2013 Plan [Member] | Third Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Compensation cost | $ 1,100 | ||||||
2013 Plan [Member] | Performance-based RSU's [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Vesting percentage | 65.00% | ||||||
Non-option equity awards granted | 50 | ||||||
2013 Plan [Member] | RSU's [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards outstanding | 2,000,000 | 1,600,000 | |||||
2013 Plan [Member] | Employees and directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | 3 years | |||||
Awards granted | 1,160,000 | 980,000 | |||||
2013 Plan [Member] | Chief Executive Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Compensation cost | $ 4,500 | ||||||
2013 Plan [Member] | Chief Executive Officer [Member] | Time Vested Restricted Shares Units [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | 3 years | |||||
Vesting percentage | 33.00% | 33.00% | |||||
Non-option equity awards granted | 129,000 | 107,000 | 85,000 | ||||
Compensation cost | $ 3,900 | $ 3,900 | |||||
2013 Plan [Member] | Chief Executive Officer [Member] | Performance-based RSU's [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Non-option equity awards granted | 129,000 | 72,000 | 97,000 | ||||
2013 Plan [Member] | Chairman of the board of directors [Member] | Time Vested Restricted Shares Units [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | 3 years | |||||
Vesting percentage | 33.00% | 33.00% | |||||
Non-option equity awards granted | 20,000 | 14,000 | 12,000 | ||||
Compensation cost | $ 300 | $ 300 | $ 300 | ||||
2013 Plan [Member] | New other directors [Member] | Time Vested Restricted Shares Units [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | 2 years | |||||
Vesting percentage | 50.00% | 50.00% | |||||
Non-option equity awards granted | 5,000 | 3,000 | 3,000 | ||||
Compensation cost | $ 600 | $ 600 | $ 600 | ||||
2013 Plan [Member] | New other directors [Member] | Time Vested Restricted Shares Units [Member] | First Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 50.00% | 50.00% | |||||
2013 Plan [Member] | New other directors [Member] | Time Vested Restricted Shares Units [Member] | Second Anniversary [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 50.00% | 50.00% |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Share Option Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of share options | |||
Outstanding as of beginning of year | 508,493 | 580,185 | 2,278,089 |
Granted | |||
Exercised | (163,375) | (70,271) | (1,611,489) |
Terminated | (667) | (921) | (77,292) |
Forfeited | (1,000) | (500) | (9,123) |
Outstanding as of end of year | 343,451 | 508,493 | 580,185 |
Options exercisable as of end of year | 343,451 | 485,579 | 459,662 |
Weighted average exercise price | |||
Outstanding as of beginning of year | $ 9.58 | $ 9.64 | $ 9.92 |
Granted | |||
Exercised | 11.28 | 10.19 | 9.27 |
Terminated | 9.90 | 9.82 | 25.89 |
Forfeited | 4.42 | 4.42 | 8.06 |
Outstanding as of end of year | 8.79 | 9.58 | 9.64 |
Options exercisable as of end of year | $ 8.79 | $ 9.46 | $ 8.51 |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule of Restricted Shares Units Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of RSU's | |||
Outstanding as of end of year | 1,200,000 | ||
RSU's [Member] | |||
Number of RSU's | |||
Outstanding as of beginning of year | 1,599,296 | 1,245,889 | 1,009,184 |
Granted | 1,159,881 | 977,667 | 818,856 |
Converted | (484,665) | (602,423) | (553,241) |
Forfeited | (260,899) | (21,837) | (28,910) |
Outstanding as of end of year | 2,013,613 | 1,599,296 | 1,245,889 |
Weighted Average Fair Value | |||
Outstanding as of beginning of year | $ 22.27 | $ 21.29 | $ 14.62 |
Granted | 18.06 | 20.80 | 24.88 |
Converted | 23.91 | 17.86 | 14.71 |
Forfeited | 21.19 | 22.11 | 16.42 |
Outstanding as of end of year | $ 19.13 | $ 22.27 | $ 21.29 |
SHAREHOLDERS' EQUITY (Schedul_3
SHAREHOLDERS' EQUITY (Schedule of Information about Share Options Outstanding) (Details) - $4.42- $17.25 [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, minimum | $ 4.42 |
Exercise price, maximum | $ 17.25 |
Number outstanding | shares | 343,451 |
Outstanding, Weighted-average remaining contractual life | 1 year 9 months 10 days |
Outstanding, Weighted average exercise price | $ 8.79 |
Number exercisable | shares | 343,451 |
Exercisable, Weighted average exercise price | $ 8.79 |
SHAREHOLDERS' EQUITY (Schedul_4
SHAREHOLDERS' EQUITY (Schedule of Intrinsic and Fair Values of Options Exercised) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |||
The intrinsic value of options exercised | $ 1,824 | $ 1,416 | $ 26,031 |
The original fair value of options exercised | $ 665 | $ 302 | $ 7,202 |
SHAREHOLDERS' EQUITY (Schedul_5
SHAREHOLDERS' EQUITY (Schedule of Intrinsic and Fair Values of RSU's) (Details) (USD $) - RSU's [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
The intrinsic value of converted RSUs | $ 8,207 | $ 15,840 | $ 12,996 |
The original fair value of converted RSUs | $ 11,588 | $ 10,761 | $ 8,138 |
SHAREHOLDERS' EQUITY (Schedul_6
SHAREHOLDERS' EQUITY (Schedule of Stock-Based Compensation Expense in Statement of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | $ 14,548 | $ 12,661 | $ 11,649 |
Cost of goods [Member] | |||
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | 4,529 | 3,141 | 3,084 |
Research and development, net [Member] | |||
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | 2,900 | 2,533 | 2,555 |
Marketing, general and administrative [Member] | |||
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | $ 7,119 | $ 6,987 | $ 6,010 |
INFORMATION ON GEOGRAPHIC ARE_3
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Schedule of Revenues by Geographic Area) (Details) - Geographic Concentration [Member] - Revenue [Member] | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Segment Reporting Information [Line Items] | |||||
Percentage | 100.00% | 100.00% | 100.00% | ||
USA [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Percentage | 52.00% | 52.00% | 52.00% | ||
Japan [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Percentage | 29.00% | 34.00% | 32.00% | ||
Asia [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Percentage | [1] | 15.00% | 10.00% | 12.00% | |
Europe [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Percentage | 4.00% | 4.00% | 4.00% | [1] | |
[1] | Represents revenues from individual countries of less than 10% each. |
INFORMATION ON GEOGRAPHIC ARE_4
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Schedule of Long-Lived Assets by Geographic Area) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $ 681,939 | $ 657,234 |
Israel [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 219,479 | 215,419 |
USA [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 248,453 | 239,462 |
Japan [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $ 214,007 | $ 202,353 |
INFORMATION ON GEOGRAPHIC ARE_5
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Schedule of Accounts Receivable of Major Customers) (Details) - Accounts Receivable [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Percentage | 10.00% | 13.00% |
Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Percentage | 10.00% | 10.00% |
INFORMATION ON GEOGRAPHIC ARE_6
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Schedule of Revenues of Major Customers) (Details) - Revenue [Member] | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | 27.00% | 33.00% | 30.00% | |
Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | 5.00% | 7.00% | 12.00% | |
Customer C [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | [1] | 27.00% | 16.00% | 15.00% |
[1] | Represents aggregated revenue to four customers accounted between 5% and 9% of revenue during 2019, to two customers accounted for 7% and 9% of revenue during 2018, and to two customers accounted for 7% and 8% of revenue during 2017. |
FINANCING EXPENSE (INCOME), N_3
FINANCING EXPENSE (INCOME), NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |||
Interest expense | $ 6,823 | $ 10,610 | $ 12,623 |
Interest income | (12,949) | (10,762) | (4,783) |
Jazz Notes amortization | 5,010 | 4,230 | |
Series G Debentures amortization, related rate differences and hedging results | 3,299 | 3,589 | 2,738 |
Exchange rate differences | 968 | 1,064 | 6 |
Bank fees and others | 1,847 | 3,673 | 633 |
Financing | $ (12) | $ 13,184 | $ 15,447 |
RELATED PARTIES BALANCES AND _3
RELATED PARTIES BALANCES AND TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |||
Long-term investment | $ 55 | $ 110 | |
General and Administrative expenses | 783 | 736 | $ 719 |
Other income (expense), net | $ (55) | $ 44 | $ 29 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Operation loss carryforwards limitation | taxable income limitation of 80% | ||
Effective Statutory tax rate | 23.00% | 23.00% | 24.00% |
Preferred income subject tax rate | 7.50% | ||
Non-cash income tax benefit | $ 13,000 | ||
Federal [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | 26,000 | ||
Tower [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 1,000,000 | ||
Effective Statutory tax rate | 7.50% | 7.50% | |
Tower US Holdings [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 31,000 | ||
Net operating loss carryforwards do not expire | 5,000 | ||
Tower US Holdings [Member] | State and Local Jurisdiction [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | 11,000 | ||
Jazz [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards, annual utilization amount | $ 2,100 | ||
Maximum [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Effective Statutory tax rate | 35.00% | ||
Minimum [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Effective Statutory tax rate | 21.00% |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Current tax expense: | ||||
Local | $ 2,164 | $ 3,622 | ||
Foreign | [1] | 1,013 | 9,273 | 6,070 |
Deferred tax expense (benefit): | ||||
Local (see F below) | 7,098 | 9,316 | (82,370) | |
Foreign (see E below) | [1] | (5,163) | (14,815) | (27,210) |
Income tax expense (benefit) | $ 2,948 | $ 5,938 | $ (99,888) | |
[1] | Foreign are amounts related to Tower’s Japanese and US subsidiaries. |
INCOME TAXES (Schedule of Profi
INCOME TAXES (Schedule of Profit (Loss) Before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Profit (loss) before taxes: | ||||
Domestic | $ 103,432 | $ 142,831 | $ 198,008 | |
Foreign | [1] | (12,411) | (3,514) | 3,760 |
PROFIT BEFORE INCOME TAX | $ 91,021 | $ 139,317 | $ 201,768 | |
[1] | Foreign are amounts related to Tower’s Japanese and US subsidiaries. |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Asset/Liability) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred tax assets: | |||
Net operating loss carryforward | [1] | $ 78,783 | $ 87,325 |
Employees benefits and compensation | [1] | 4,819 | 4,914 |
Accruals and reserves | [1] | 3,341 | 4,738 |
Research and development | [1] | 15,276 | 12,292 |
Others | [1] | 5,068 | 3,615 |
Gross deferred tax assets - long-term | [1] | 107,287 | 112,884 |
Valuation allowance, see F below | [1] | (7,266) | (5,834) |
Deferred tax assets | [1] | 100,021 | 107,050 |
Deferred tax liabilities- long-term: | |||
Depreciation and amortization | [1] | (77,966) | (82,001) |
Gain on TPSCo acquisition | [1] | (1,240) | |
Others | [1] | (931) | (750) |
Deferred tax liabilities | [1] | (78,897) | (83,991) |
Presented in long term deferred tax assets | [1] | 66,362 | 73,460 |
Presented in long term deferred tax liabilities | [1] | $ (45,238) | $ (50,401) |
[1] | Deferred tax assets and liabilities relating to Tower for the years 2019 and 2018 are computed based on the Israeli preferred enterprise tax rate of 7.5%. |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 14,783 | $ 15,286 | $ 8,969 |
Additions for tax positions of current year | 778 | 716 | 8,753 |
Reduction due to statute of limitation of prior years | (448) | (1,219) | |
Reduction of prior years' provision | (2,436) | ||
Ending balance | $ 15,113 | $ 14,783 | $ 15,286 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Income Tax Disclosure [Abstract] | ||||
Tax expense computed at statutory rates, see (*) below | [1] | $ 20,935 | $ 32,044 | $ 48,433 |
Effect of tax rate change on deferred tax liabilities, net (**) | [2] | 314 | (478) | (16,078) |
Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit | (16,396) | (23,150) | (33,298) | |
Change in Valuation allowance, see F below | (962) | (82,772) | ||
Tax benefits for which deferred taxes were not recorded, see F below | (15,103) | |||
Permanent differences and other, net | (1,905) | (1,516) | (1,070) | |
Income tax expense (benefit) | $ 2,948 | $ 5,938 | $ (99,888) | |
[1] | The tax expense (benefit) was computed based on Tower’s regular corporate tax rate of 23% for 2019, 23% for 2018 and 24% for 2017. | |||
[2] | Reduction in tax rates due to the U.S. Tax Reform and reduction in income tax rates in Japan. |