TOWER SEMICONDUCTOR LTD

Specialty foundry, profitable with strong operating cash flow, though capex keeps free cash flow negative.

Strengths

• Profitable with strong OCF — operating margin 12.4% (76th), OCF margin 25.3% (76th), interest coverage 53
• Strong liquidity, low leverage — current ratio 6.48 (84th), D/E 0.06

Risks

• Negative free cash flow from fab capex — FCF -$48.9M (14th)
• Foundry-capacity/acquisition execution per risk factors — per 10-K
• Semiconductor cyclicality — per 10-K

Notable findings

• Cash burnNegative free cash flow (-48.9M)
• Customer concentration~50% of revenue from one customer/distributor — For the year ended December 31, 2025, 11% of our revenues were derived from NTCJ, 39% of our revenues were derived from an additional seven customers, each comprising between 4% to 7% of our revenues,
• Strong balance sheetStrong balance sheet — $1.2B cash & investments, ~94 quarters of runway