Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | TOWER SEMICONDUCTOR LTD |
Entity Central Index Key | 0000928876 |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
Entity Current Reporting Status | Yes |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Common Stock, Shares Outstanding | 104,979,407 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 385,091 | $ 445,961 |
Short-term interest-bearing deposits | 120,079 | |
Marketable securities | 135,850 | 113,874 |
Trade accounts receivable | 153,409 | 149,666 |
Inventories | 170,778 | 143,315 |
Other current assets | 22,752 | 21,516 |
Total current assets | 987,959 | 874,332 |
LONG-TERM INVESTMENTS | 35,945 | 26,073 |
PROPERTY AND EQUIPMENT, NET | 657,234 | 635,124 |
INTANGIBLE ASSETS, NET | 13,435 | 19,841 |
GOODWILL | 7,000 | 7,000 |
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET | 88,404 | 111,269 |
TOTAL ASSETS | 1,789,977 | 1,673,639 |
CURRENT LIABILITIES | ||
Current maturities of loans, leases and debentures | 10,814 | 105,958 |
Trade accounts payable | 104,329 | 115,347 |
Deferred revenue and customers' advances | 20,711 | 14,338 |
Employee related liabilities | 50,750 | 50,844 |
Other current liabilities | 17,117 | 15,886 |
Total current liabilities | 203,721 | 302,373 |
LONG-TERM DEBT | ||
Debentures | 120,170 | 128,368 |
Other long-term debt | 136,499 | 100,355 |
LONG-TERM CUSTOMERS' ADVANCES | 28,131 | 31,908 |
EMPLOYEE RELATED LIABILITIES | 13,898 | 14,662 |
DEFERRED TAX LIABILITY | 50,401 | 63,924 |
OTHER LONG-TERM LIABILITIES | 952 | 2,343 |
TOTAL LIABILITIES | 553,772 | 643,933 |
Ordinary shares of NIS 15 par value: 150,000 authorized as of December 31, 2018 and 2017 105,066 and 104,980 issued and outstanding, respectively, as of December 31, 2018 98,544 and 98,458 issued and outstanding, respectively, as of December 31, 2017 | 418,492 | 391,727 |
Additional paid-in capital | 1,380,396 | 1,347,866 |
Capital notes | 20,758 | 20,758 |
Cumulative stock based compensation | 93,226 | 80,565 |
Accumulated other comprehensive loss | (23,388) | (22,759) |
Accumulated deficit | (637,446) | (773,025) |
SHAREHOLDERS' EQUITY, before treasury stock | 1,252,038 | 1,045,132 |
Treasury stock, at cost - 86 shares | (9,072) | (9,072) |
THE COMPANY'S SHAREHOLDERS' EQUITY | 1,242,966 | 1,036,060 |
Non-controlling interest | (6,761) | (6,354) |
TOTAL SHAREHOLDERS' EQUITY | 1,236,205 | 1,029,706 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,789,977 | $ 1,673,639 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value | ₪ 15 | ₪ 15 |
Ordinary shares, authorized | 150,000 | 150,000 |
Ordinary shares, issued | 105,066 | 98,544 |
Ordinary shares, outstanding | 104,980 | 98,458 |
Treasury stock, shares | 86 | 86 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
REVENUES | $ 1,304,034 | $ 1,387,310 | $ 1,249,634 |
COST OF REVENUES | 1,011,087 | 1,033,005 | 946,534 |
GROSS PROFIT | 292,947 | 354,305 | 303,100 |
OPERATING COSTS AND EXPENSES: | |||
Research and development | 73,053 | 67,664 | 63,134 |
Marketing, general and administrative | 64,951 | 66,799 | 65,439 |
Nishiwaki Fab restructuring and impairment cost (income), net | (627) | ||
TOTAL OPERATING COSTS AND EXPENSES | 138,004 | 134,463 | 127,946 |
OPERATING PROFIT | 154,943 | 219,842 | 175,154 |
FINANCING EXPENSE, NET | (13,184) | (15,447) | (24,349) |
GAIN FROM ACQUISITION, NET | 50,471 | ||
OTHER INCOME (EXPENSE), NET | (2,442) | (2,627) | 9,322 |
PROFIT BEFORE INCOME TAX | 139,317 | 201,768 | 210,598 |
INCOME TAX BENEFIT (EXPENSE), NET | (5,938) | 99,888 | (1,432) |
NET PROFIT | 133,379 | 301,656 | 209,166 |
Net loss (income) attributable to non-controlling interest | 2,200 | (3,645) | (5,242) |
NET PROFIT ATTRIBUTABLE TO THE COMPANY | $ 135,579 | $ 298,011 | $ 203,924 |
BASIC EARNINGS PER ORDINARY SHARE: | |||
Earnings per share | $ 1.35 | $ 3.08 | $ 2.33 |
Weighted average number of ordinary shares outstanding | 100,399 | 96,647 | 87,480 |
DILUTED EARNINGS PER ORDINARY SHARE: | |||
Earnings per share | $ 1.32 | $ 2.90 | $ 2.09 |
Net profit used for diluted earnings per share | $ 135,579 | $ 306,905 | $ 212,160 |
Weighted average number of ordinary shares outstanding used for diluted earnings per share | 102,517 | 105,947 | 101,303 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net profit | $ 133,379 | $ 301,656 | $ 209,166 |
Other comprehensive income, net of tax: | |||
Foreign currency translation adjustment | 3,599 | 5,681 | 923 |
Change in employees plan assets and benefit obligations, net of taxes in the amount of $81, $171 and $184 for the years ended December 31, 2018, 2017 and 2016, respectively | 269 | 511 | (546) |
Unrealized gain (loss) on derivatives | (2,704) | 1,796 | 266 |
Comprehensive income | 134,543 | 309,644 | 209,809 |
Comprehensive (income) loss attributable to non-controlling interest | 407 | (6,565) | (6,902) |
Comprehensive income attributable to the Company | $ 134,950 | $ 303,079 | $ 202,907 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Change in employees plan assets and benefit obligations, net of taxes | $ 81 | $ 171 | $ 184 |
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 (loss) [Member] | Noncontrolling interest [Member] | Total |
BALANCE at Dec. 31, 2015 | $ 326,572 | $ 1,273,545 | $ 48,553 | $ 58,209 | $ (264) | $ (26,546) | $ (1,273,654) | $ (9,072) | $ (11,757) | $ 385,586 | |
BALANCE, SHARES at Dec. 31, 2015 | 82,144 | ||||||||||
Issuance of shares | $ 12,504 | 27,496 | 40,000 | ||||||||
Issuance of shares, shares | 3,297 | ||||||||||
Conversion of debentures and exercise of warrants into share capital | $ 12,069 | 10,223 | 22,292 | ||||||||
Conversion of debentures and exercise of warrants into share capital, shares | 3,080 | ||||||||||
Exercise of options | $ 14,412 | 3,192 | 17,604 | ||||||||
Exercise of options, shares | 3,650 | ||||||||||
Capital notes converted into share capital | $ 3,500 | 3,789 | (7,289) | ||||||||
Capital notes converted into share capital, shares | 900 | ||||||||||
Employee stock-based compensation | 9,406 | 9,406 | |||||||||
Stock-based compensation related to the Facility Agreement with the Banks | 480 | 480 | |||||||||
Dividend paid to Panasonic | (2,563) | (2,563) | |||||||||
Accumulated amount due to adoption of ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) | 1,306 | (1,306) | |||||||||
Other comprehensive income: | |||||||||||
Profit | 203,924 | $ 203,924 | 5,242 | 209,166 | |||||||
Foreign currency translation adjustments | (737) | (737) | 1,660 | 923 | |||||||
Change in employees plan assets and benefit obligations | (546) | (546) | (546) | ||||||||
Unrealized gain (loss) on derivatives | 266 | 266 | 266 | ||||||||
Comprehensive income | 202,907 | 202,907 | |||||||||
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 | |||||||||||
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 | |||||||||
Dividend paid 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 | ||||||||||
OUTSTANDING SHARES, NET OF TREASURY STOCK AS OF DECEMBER 31, 2018 at Dec. 31, 2018 | 104,980 |
CONDENSED INTERIM CONSOLIDATED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS - OPERATING ACTIVITIES | |||
Net profit | $ 133,379 | $ 301,656 | $ 209,166 |
Income and expense items not involving cash flows: | |||
Depreciation and amortization | 214,391 | 208,411 | 197,606 |
Effect of indexation, translation and fair value measurement on debt | (9,791) | 12,865 | 8,442 |
Other expense (income), net | 2,442 | 2,627 | (9,322) |
Gain from acquisition, net | (50,471) | ||
Changes in assets and liabilities: | |||
Trade accounts receivable | (3,096) | (6,564) | (30,104) |
Other current assets | 11,260 | (8,321) | (265) |
Inventories | (26,344) | (4,277) | (22,069) |
Trade accounts payable | (3,562) | (8,649) | 5,550 |
Deferred revenue and customers' advances | 2,625 | (21,803) | 23,581 |
Employee related liabilities and other current liabilities | (867) | (8,219) | (145) |
Long-term employee related liabilities | (795) | (3,247) | (798) |
Deferred tax, net | (5,354) | (108,459) | (4,564) |
Other long-term liabilities | (1,391) | (385) | 861 |
Net cash provided by operating activities | 312,897 | 355,635 | 327,468 |
CASH FLOWS - INVESTING ACTIVITIES | |||
Investments in property and equipment | (210,192) | (187,676) | (217,496) |
Proceeds related to sale of property and equipment | 40,451 | 20,038 | 7,872 |
Investment grants received | 2,921 | ||
Investments in other assets | (14,536) | ||
Deposits and marketable securities, net | (143,940) | (80,643) | (17,101) |
Net cash used in investing activities | (328,217) | (245,360) | (226,725) |
CASH FLOWS - FINANCING ACTIVITIES | |||
Issuance of debentures, net | 113,149 | ||
Exercise of warrants and options, net | 714 | 31,315 | 38,803 |
Proceeds from loans, net | 98,990 | 55,960 | |
Loans repayment | (142,285) | (43,259) | (132,018) |
Principal payments on account of capital lease obligation | (5,554) | (781) | |
Debentures repayment | (6,215) | ||
Dividend paid to Panasonic | (4,378) | (2,563) | |
Net cash provided by (used in) financing activities | (48,135) | (23,318) | 73,331 |
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGE | 2,585 | 3,720 | 5,635 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (60,870) | 90,677 | 179,709 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 445,961 | 355,284 | 175,575 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 385,091 | 445,961 | 355,284 |
NON-CASH ACTIVITIES: | |||
Investments in property and equipment | 28,052 | 28,419 | 25,256 |
Conversion of notes into share capital | 58,586 | 611 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Cash paid during the period for interest | 11,835 | 14,068 | 10,543 |
Cash received during the period from interest | 8,818 | 3,870 | 1,009 |
Cash paid during the period for income taxes, net | $ 5,768 | $ 17,668 | $ 3,485 |
DESCRIPTION OF BUSINESS AND GEN
DESCRIPTION OF BUSINESS AND GENERAL | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND GENERAL | NOTE 1 - 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) since February 2016, Tower US Holdings is also the sole owner of 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. 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 (BCD and 700V) 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 leading edge 45nm CMOS, 65nm RF CMOS and 65nm 1.12um pixel technologies, including 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, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - 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. 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 to be matured within 12 months from balance sheet date. 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. 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 allowance for doubtful accounts is computed on the specific identification basis for accounts whose collectability, in the Company’s estimation, is uncertain. As of December 31, 2018 and 2017, the amounts in the allowance for doubtful accounts totaled to $4,208 and $608, respectively, $3,000 of which is included in 2018 from one customer located in the Far East region. G. 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. H. 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 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 S below. The Company determines lease classification based on the criteria established in ASC 840. When the Company determines, based on the criteria, that a lease should be classified as capital lease, an asset and corresponding liability is recognized. Each capital lease is recorded as an asset and an obligation at an amount that is equal to the present value of the minimum lease payments over the lease term. Assets under capital lease are part of property plant and equipment and are depreciated accordingly. I. Intangible Assets and Goodwill The Company accounts for intangible assets and goodwill in accordance with ASC 350 “ Intangibles-Goodwill and Other 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 S below. J. Deferred Tax Asset and Other Long-Term Assets, Net Deferred tax asset and other assets, net include: (i) deferred tax asset as described in Note 18; (ii) fair market value of derivative instrument used in hedging of Debentures Series G, see T below and (iii) prepaid long-term lease payments to the Israel Land Administration (“ILA”) for the land on which the Company’s Israeli fabs are established, net of accumulated amortization over the lease period, see also Note 14C. K. Debentures - Classification of Liabilities and Equity of Convertible Debentures Convertible debentures are evaluated to determine whether they include conversion features or other embedded derivatives that warrant bifurcation. The Company applies ASC 815-40 “Contract in Entity’s Own Equity” in determining whether an instrument that may be settled in Tower’s shares is also considered indexed to a company’s own stock, for the purpose of classification of the instrument as a liability or equity. L. Revenue Recognition ASC Topic 606 “ Revenue from Contracts with Customers Under the modified retrospective method, prior period financial positions and results are not adjusted. There was The Company’s revenues are generated principally from sales of semiconductor wafers. The Company, to a 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 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. M. 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. N. Income Taxes The Company accounts for income taxes using an asset and liability approach as prescribed in ASC 7 40-10 “ Income Taxes ” (“ASC 740-10” The Company evaluates realizability 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 18. 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. O. Earnings Per Ordinary Share Basic earnings per share are calculated in accordance with ASC 260, “ Earnings Per Share P. Comprehensive Income In accordance with ASC 220 “ Comprehensive Income Q. 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 statement 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. R. Stock-Based Compensation The Company applies the provisions of ASC Topic 718 “ Compensation - Stock Compensation S. 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 a 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 evaluates goodwill qualitatively for impairment at least annually or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If the Company determines that a quantitative analysis is necessary, the impairment test for goodwill is currently a two-step process. Step one consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. If the carrying amount of the reporting unit is in excess of its fair value, step two requires the comparison. Any excess of the carrying value of the reporting unit’s goodwill over the implied fair value of the reporting unit’s goodwill is recorded as an impairment loss. The Company uses the income approach methodology of valuation that includes discounted cash flows to determine the fair value of the unit. Significant management judgment is required in the forecasts of future operating results used for this methodology. T. 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. U. 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 representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings. 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. V. 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. W. Reclassification and Presentation Certain amounts in prior years’ financial statements have been reclassified in order to conform to the 2018 presentation. X. Recently Adopted Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers”, In October 2016 , Y. Recently Issued Accounting Pronouncements 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 In February 2018, the FASB issued ASU No. 2018-02 “Reporting Comprehensive Income” (“ASU 2018-02”): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU is intended to help companies reclassify certain stranded income tax effects in accumulated other comprehensive income (“AOCI”) resulting from the Tax Cuts and Jobs Act of 2017 (the “Act”), which was enacted in December 2017. ASU 2018-02 provides for the elimination of stranded tax effects of the Act by allowing reclassification of stranded tax effects from AOCI to retained earnings. This ASU is applicable only to tax effects relating to the Act, and the existing guidance regarding effects of other changes in tax laws is not affected. This ASU was early adopted for the year ended December 31, 2018 and had no material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, which clarified its guidance to simplify the measurement of goodwill by eliminating the Step 2 impairment test. The new guidance requires companies to perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment will be effective beginning in its first quarter of fiscal year 2020. The amendment is required to be adopted prospectively. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance is effective beginning in the first quarter of fiscal year 2018. The adoption of this guidance did not have an impact on the Company’s operating results. In August 2017, the FASB issued In January 2016, the FASB issued ASU 2016-01 to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The standard requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. The provisions under this amendment are effective January 1, 2018, and for interim periods within that year. The impact of ASU 2016-01 on the Company’s consolidated financial statements was immaterial. In February 2016, the FASB issued ASU 2016-02 “ Leases” In July 2018, the FASB issued ASU 2018-10 “ Codification Improvements to Topic 842, Leases ,” to clarify application of certain aspects of the new leases standard and to remove inconsistencies within the guidance and ASU 2018-11 “ Targeted Improvements ”(“ ASU 2018-11 “), which provides for an alternate transition method. Specifically, ASU 2018-11 allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. The Company has identified all existing operating and financing leases and is in the process of determining the present value of existing lease assets and liabilities under the new guidance. The Company is also currently finalizing processes and controls to identify, classify and measure new leases in accordance with ASU 2016-02. In June 2016, the FASB issued ASU 2016-13 “ Financial Instruments Credit Losses . In November 2016, the FASB issued ASU 2016-18 to require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments are effective January 1, 2018, and for interim periods within that year. The adoption of this guidance did not have an impact on the |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 - Inventories consist of the following: As of December 31, 2018 2017 Raw materials $ 72,144 $ 48,220 Work in process 92,047 92,764 Finished goods 6,587 2,331 $ 170,778 $ 143,315 Work in process and finished goods are presented net of aggregate write-downs to net realizable value of $1,206 and $1,352 as of December 31, 2018 and 2017, respectively. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
OTHER CURRENT ASSETS | NOTE 4 - Other current assets consist of the following: As of December 31, 2018 2017 Tax receivables $ 3,997 $ 9,144 Prepaid expenses 14,170 11,634 Interest on deposits and other receivables 4,585 738 $ 22,752 $ 21,516 |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Severance-pay funds, net $ 13,615 $ 13,317 Long-term interest bearing bank deposit 12,500 12,500 Others 9,830 256 $ 35,945 $ 26,073 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 6 - PROPERTY AND EQUIPMENT, NET Composition As of December 31, 2018 2017 Original cost: Land and Buildings (including facility infrastructure) $ 347,798 $ 343,247 Machinery and equipment 2,482,609 2,282,042 $ 2,830,407 $ 2,625,289 Accumulated depreciation: Buildings (including facility infrastructure) $ (224,796 ) $ (215,515 ) Machinery and equipment (1,948,377 ) (1,774,650 ) $ (2,173,173 ) $ (1,990,165 ) $ 657,234 $ 635,124 As of December 31, 2018 and 2017, the original cost of land, buildings, machinery and equipment was reflected net of investment grants in the aggregate amount of $285,636 and $285,930, respectively. The following is the composition of the leased equipment under capital lease agreements included under “machinery and equipment” above: As of December 31, 2018 2017 Original cost - machinery and equipment $ 53,441 $ 16,630 Accumulated depreciation - machinery and equipment (5,500 ) (306 ) $ 47,941 $ 16,324 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 7 - 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 Patents and other core technology rights 9 15,100 (15,100 ) -- Trade name 9 7,671 (7,547 ) 124 Customer relationships 15 2,600 (1,783 ) 817 Others -- 1,000 (1,000 ) -- Total identifiable intangible assets $ 170,706 $ (157,271 ) $ 13,435 Intangible assets consist of the following as of December 31, 2017: Useful Life (years) Cost Accumulated Amortization Net Technologies 4;5;9 $ 110,310 $ (103,897 ) $ 6,413 Facilities lease 19 33,500 (21,665 ) 11,835 Patents and other core technology rights 9 15,100 (15,100 ) -- Trade name 9 7,612 (7,009 ) 603 Customer relationships 15 2,600 (1,610 ) 990 Others -- 1,000 (1,000 ) -- Total identifiable intangible assets $ 170,122 $ (150,281 ) $ 19,841 |
DEFERRED TAX AND OTHER LONG-TER
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
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 consist of the following: As of December 31, 2018 2017 Deferred tax asset (see Note 18) $ 73,460 $ 82,852 Prepaid long-term land lease, net (see Note 14C) 3,296 3,417 Fair value of cross currency interest rate swap (see Note 12D) 6,722 18,005 Long-term prepaid expenses and others 4,926 6,995 $ 88,404 $ 111,269 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities, Current [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 9 - OTHER CURRENT LIABILITIES Other current liabilities consist of the following: As of December 31, 2018 2017 Tax payables $ 12,096 $ 8,567 Interest payable 986 3,160 Others 4,035 4,159 $ 17,117 $ 15,886 |
DEBENTURES
DEBENTURES | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
DEBENTURES | NOTE 10 - A. Composition by Repayment Schedule: 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 Total outstanding principal amounts of debentures $ -- $ 35,676 $ 35,676 $ 35,676 $ 17,839 $ 124,867 Accretion of carrying amount to principal amount (4,697 ) Carrying amount $ 120,170 As of December 31, 2017 Interest rate 2018 2019 2020 2021 2022 2023 Total Debentures Series G (see B below) 2.79 % $ -- $ -- $ 38,568 $ 38,568 $ 38,568 $ 19,283 $ 134,987 Jazz’s Notes (see C below) 8 % 58,307 -- -- -- -- -- 58,307 Total outstanding principal amounts of debentures $ 58,307 $ -- $ 38,568 $ 38,568 $ 38,568 $ 19,283 $ 193,294 Accretion of carrying amount to principal amount (11,629 ) Carrying amount $ 181,665 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, 2018 and 2017, the outstanding principal amount of Series G Debentures was NIS 468,000 (approximately $125,000 and $135,000 as of December 31, 2018 and December 31, 2017, respectively), with related hedging transactions net asset fair value of $4,951 and $16,455, respectively. The fair value decrease in 2018 and 2017 is attributed to the appreciation of the USD against the NIS (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, 2018, the Company was in compliance with all of the financial covenants under the indenture. C. Jazz 2014 Notes In March 2014, Jazz issued unsecured convertible senior notes due December 2018 (the “2014 Notes” or the “Jazz Notes”). As of December 31, 2017, approximately $58,000, principal amount of these 2014 Notes was outstanding. During 2018, all the holders of the 2014 Notes converted their notes to approximately 5.8 million ordinary shares of Tower, and as a result, as of December 31, 2018, no such Jazz Notes were outstanding. |
OTHER LONG-TERM DEBT
OTHER LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Loans Payable [Abstract] | |
OTHER LONG-TERM DEBT | NOTE 11 - OTHER LONG-TERM DEBT A. Composition: As of December 31, 2018 2017 In JPY, see also D below $ 100,118 $ 98,239 In U.S. Dollars, see also E below -- 40,000 Total long-term loan - principal amount 100,118 138,239 Deferred issuance costs -- (1,077 ) Total long-term loans 100,118 137,162 Capital leases - see Note 14C 47,195 15,854 Less - current maturities - see Note 14C (10,814 ) (52,661 ) $ 136,499 $ 100,355 B. Composition by Repayment Schedule of Loans: 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 amounts of loans $ -- $ -- $ 22,248 $ 22,248 $ 55,622 $ 100,118 As of December 31, 2017 Interest rate 2018 2019 2020 2021 Total In U.S Dollars Libor + 2.00% $ 5,714 $ 11,429 $ 11,429 $ 11,428 $ 40,000 In JPY Tibor + 1.65%-2.00% 43,915 32,747 21,577 -- 98,239 Total outstanding principal amounts of loans $ 49,629 $ 44,176 $ 33,006 $ 11,428 $ 138,239 For repayment schedule of capital lease agreements, see Note 14C. C. 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, 2018, Jazz was in compliance with all of the covenants under the Jazz Credit Line Agreement. As of December 31, 2018, 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, 2018 and 2017, no loan amounts were outstanding under the Jazz Credit Line Agreement. D. Loans to TPSCo from Japanese Financial Institutions In June 2014, TPSCo entered into a long-term loan agreement with JA Mitsui Leasing, Ltd. and Bank of Tokyo (BOT) Lease Co., Ltd, under which it borrowed 8.8 billion Japanese Yen (outstanding principal amount was approximately $33,000 as of December 31, 2017). In December 2015, TPSCo and JA Mitsui Leasing, Ltd., Sumitomo Mitsui Trust Bank Limited and Showa Leasing Co., Ltd. (“JP Banks”) signed an asset-based loan agreement (the “ABL”), according to which TPSCo entered into a five year term loan agreement with the JP Banks under which TPSCo borrowed an additional amount of 8.5 billion Japanese Yen (outstanding principal amount was approximately $65,000 as of December 31, 2017). In June 2018, TPSCo early repaid its two outstanding loans and refinanced them with 11 Billion JPY (approximately $100,000) new asset-based loan agreements with JA Mitsui Leasing, Ltd., Sumitomo Mitsui Trust Bank, Limited (SMTB) and Sumitomo Mitsui Banking Corporation (SMBC) (“JP Loan”). The JP Loan includes a grace period through 2021 and it carries a fixed interest rate of 1.95% per annum. Principal is payable in nine semiannual payments between 2021 and 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 $100,000 as of December 31, 2018. 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 or any of its affiliates. As of December 31, 2018, TPSCo was in compliance with all of the financial ratios and covenants under this JP Loan. E. Loan to TJT In July 2016, TJT entered into an asset based long-term loan agreement with JA Mitsui Leasing Capital Corporation (“JA Mitsui”) in the total amount of $40,000. The loan carried annual interest of LIBOR+2.0% and was originally scheduled to be repaid between 2018 and 2021. The loan was secured mainly by a lien over TJT’s machinery and equipment and an assignment of TJT’s right to receive any amounts under its manufacturing agreement with Maxim. The outstanding principal amount as of December 31, 2017 was $40,000. In July 2018, TJT early repaid the entire outstanding amount of this loan to save financing cost. F. Capital Lease Agreements See Note 14C. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS | NOTE 12 - 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. As of December 31, 2018 the fair value amounts of such exchange rate agreements were approximately $379 in a liability position presented in short-term liabilities with face value of $92,000. As of December 31, 2017 the fair value amounts of such exchange rate agreements were approximately $24 in an asset position presented in short-term assets with face value of $18,000. 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, 2018 and 2017, the fair value amounts of such exchange rate agreements were $16 and $169, respectively, in a liability position presented in short-term liabilities with face value of $42,000 and $48,000, 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 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 which their collection 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, 2018 and 2017. The fair value of debentures, based on quoted market prices as of December 31, 2018 and 2017, was approximately $127,000 and $345,000, respectively, compared to carrying amounts of approximately $120,000 and $182,000, for the above dates, respectively. D. Cash Flow Hedge Gains (Losses) The Company entered into cash flow hedging transactions to mitigate the foreign exchange rate differences on the principal As of December 31, 2018 , , As of December 31, 2018 and December 31, 2017, the effective portion of $1,329 and $2,758, respectively, were recorded in OCI, of which a loss of approximately $1,231 is expected to be reclassified into earnings during the twelve months ending December 31, 2019. For the years ended December 31, 2018 and December 31, 2017, the effect of the hedge on the Company’s results of operations was $11,787 loss and $11,654 income, 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. 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. 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 Level 2 Measurements Over the counter derivatives - the Company uses the market approach using quotations from banks and other public information. Level 3 Measurements Recurring Fair Value Measurements Using the Indicated Inputs: 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 - asset, net position $ 4,951 $ -- $ 4,951 $ -- Marketable securities held for sale 135,227 135,227 -- -- Foreign exchange forward and cylinders - liability position (395 ) -- (395 ) -- $ 139,783 $ 135,227 $ 4,556 $ -- December 31, 2017 Quoted prices in active market for identical liability (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cross currency swap - asset, net position $ 16,455 $ -- $ 16,455 $ -- Marketable securities held for sale 113,168 113,168 -- -- Foreign exchange forward and cylinders - liability position (169 ) -- (169 ) -- Foreign exchange forward and cylinders - asset position 24 -- 24 -- $ 129,478 $ 113,168 $ 16,310 $ -- F. Short-Term and Long-Term Deposits and Marketable Securities Short-term and long-term deposits and marketable securities as of December 31, 2018 included short term deposits in the amount of $120,079, marketable securities in the amount of $135,850 (including accrued interest) and long-term bank deposit in the amount of $12,500; as of December 31, 2017, long-term deposits and marketable securities included marketable securities in the amount of $113,874 (including accrued interest) and 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, 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 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 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, 2017: Amortized cost Gross unrealized gains Gross Unrealized losses Estimated fair value Corporate bonds $ 98,998 $ 25 $ (683 ) $ 98,340 Non-U.S government bonds 2,730 -- (19 ) 2,711 Municipal bonds 11,950 15 (96 ) 11,869 Certificate of deposits 248 -- -- 248 $ 113,926 $ 40 $ (798 ) $ 113,168 The scheduled maturities of available-for-sale marketable securities as of December 31, 2017, were as follows: Amortized cost Estimated fair value Due within one year $ 7,688 $ 7,679 Due after one year through five years 106,238 105,489 $ 113,926 $ 113,168 Investments with continuous unrealized losses for less than 12 months and 12 months or more , December 31, 2018 Investment with continuous unrealized losses for less than 12 months Investments with continuous unrealized losses for 12 months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate debentures $ 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 ) Investments with continuous unrealized losses for less than 12 months and 12 months or more , December 31, 2017 Investment with continuous unrealized losses for less than 12 months Investments with continuous unrealized losses for 12 months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate debentures $ 89,133 $ (683 ) $ -- $ -- $ 89,133 $ (683 ) Non-U.S government bonds 2,711 (19 ) -- -- 2,711 (19 ) Municipal bonds 8,837 (96 ) -- -- 8,837 (96 ) Total $ 100,681 $ (798 ) $ -- $ -- $ 100,681 $ (798 ) |
EMPLOYEE RELATED LIABILITIES
EMPLOYEE RELATED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
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 $9,924 and $12,335, respectively, as of December 31, 2018. 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 $5,158, $5,059 and $ 4,345 for 2018, 2017 and 2016, 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 2018, 2017 and 2016 amounted to $6,700, $6,706 and $7,015, respectively. B. Jazz Employee Benefit Plans The following information provide the changes in 2018, 2017 and 2016 periodic expenses and benefit obligations due to the bargaining agreement effective December 19, 2009 , 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, 2018 2017 2016 Net periodic benefit cost: Service cost $ 10 $ 9 $ 12 Interest cost 73 69 85 Amortization of prior service costs -- -- (12 ) Amortization of net loss (gain) (262 ) (361 ) (333 ) Total net periodic benefit cost $ (179 ) $ (283 ) $ (248 ) 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 (376 ) 317 (316 ) Amortization of prior service costs -- -- 12 Amortization of net gain (loss) 262 361 333 Total recognized in other comprehensive income (loss) $ (114 ) $ 678 $ 29 Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (293 ) $ 395 $ (219 ) Weighted average assumptions used: Discount rate 3.80 % 4.50 % 4.80 % 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) 8.30%/11.10 % 7.20%/10.00 % 6.75%/10.00 % Ultimate rate (Pre-65/Post-65) 4.50%/4.50 % 4.50%/4.50 % 4.50%/5.00 % Year the ultimate rate is reached (Pre-65/Post-65) 2027/2027 2025/2025 2025/2022 Measurement date December 31, 2018 December 31, 2017 December 31, 2016 Impact of one - Increase Decrease Effect on service cost and interest cost $ 4 $ (3 ) Effect on post-retirement benefit obligation $ 40 $ (32 ) 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, 2018 2017 2016 Change in medical plan related benefit obligation: Medical plan related benefit obligation at beginning of period $ 1,936 $ 1,550 $ 1,781 Service cost 10 9 12 Interest cost 73 69 85 Benefits paid (15 ) (9 ) (12 ) Change in medical plan provisions -- -- -- Actuarial loss (gain) (376 ) 317 (316 ) Benefit medical plan related obligation end of period $ 1,628 $ 1,936 $ 1,550 Change in plan assets: Fair value of plan assets at beginning of period $ -- $ -- $ -- Employer contribution 15 9 12 Benefits paid (15 ) (9 ) (12 ) Fair value of plan assets at end of period $ -- $ -- $ -- Medical plan $ (1,628 ) $ (1,936 ) $ (1,550 ) As of December 31, 2018 2017 2016 Amounts recognized in statement of financial position: Current liabilities $ (65 ) $ (58 ) $ (37 ) Non-current liabilities (1,563 ) (1,878 ) (1,513 ) Net amount recognized $ (1,628 ) $ (1,936 ) $ (1,550 ) Weighted average assumptions used: Discount rate 4.50 % 3.80 % 4.50 % 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) 6.90%/13.10 % 8.30%/11.10 % 7.20%/10.00 % Health care cost trend rate assumed for next year (pre 65/ post 65 Non Medicare Advantage) 6.90%/7.90 % 8.30%/11.10 % 7.20%/10.00 % 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 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 2019 $ 65 2020 64 2021 68 2022 66 2023 64 2024-2028 $ 395 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 funding policy is to make contributions that satisfy at least the minimum required contribution for IRS qualified plans. 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, 2018 2017 2016 Net periodic benefit cost: Interest cost $ 749 $ 831 $ 841 Expected return on plan assets (1,427 ) (1,236 ) (1,154 ) Amortization of prior service costs 3 3 3 Amortization of net loss (gain) -- 55 34 Total net periodic benefit cost $ (675 ) $ (347 ) $ (276 ) 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 (231 ) (1,303 ) 736 Amortization of prior service costs (3 ) (3 ) (3 ) Amortization of net gain (loss) -- (55 ) (34 ) Total recognized in other comprehensive income (loss) $ (234 ) $ (1,361 ) $ 699 Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (909 ) $ (1,708 ) $ 423 Weighted average assumptions used: Discount rate 3.70 % 4.30 % 4.60 % Expected return on plan assets 6.20 % 6.20 % 6.20 % Rate of compensation increases N/A N/A N/A Year ended December 31, 2018 2017 2016 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 $ -- $ -- $ 54 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, 2018 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 20,629 $ 19,672 $ 18,605 Interest cost 749 831 841 Benefits paid (607 ) (548 ) (496 ) Change in plan provisions -- -- -- Actuarial loss (gain) (1,792 ) 674 722 Benefit obligation end of period $ 18,979 $ 20,629 $ 19,672 Change in plan assets: Fair value of plan assets at beginning of period $ 23,235 $ 19,871 $ 18,526 Actual return on plan assets (133 ) 3,212 1,141 Employer contribution 175 700 700 Benefits paid (607 ) (548 ) (496 ) Fair value of plan assets at end of period $ 22,670 $ 23,235 $ 19,871 Funded status $ 3,691 $ 2,606 $ 199 Amounts recognized in statement of financial position: Non-current assets $ 3,691 $ 2,606 $ 199 Non-current liabilities -- -- -- Net amount recognized $ 3,691 $ 2,606 $ 199 Weighted average assumptions used: Discount rate 4.40 % 3.70 % 4.30 % 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 2019 $ 823 2020 922 2021 988 2022 1,055 2023 1,118 2024-2028 $ 6,044 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 $ -- $ 22,669 $ -- Total plan assets at fair value $ -- $ 22,669 $ -- Level 1 Level 2 Level 3 Investments in mutual funds $ - $ 23,235 $ - Total plan assets at fair value $ - $ 23,235 $ - Jazz’s pension plan weighted average asset allocations on December 31, 2018, by asset category are as follows: Asset Category December 31, 2018 Target allocation 2019 Equity securities 19 % 20 % Debt securities 81 % 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 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, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 - A. Liens (1) Loans, Bonds and Capital Leases For liens relating to Jazz Credit Line Agreement, see Note 11C. For liens under TPSCo 2018 JP Loan agreement, see Note 11D. For liens under the capital lease agreements, see Note 14C. For liens under Bond G indenture, see Note 10B. (2) Approved Enterprise Status 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. 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. C. Leases Tower’s administrative offices and corporate headquarters, Fab 1 and Fab 2 manufacturing operations are located in a building complex situated in an industrial park in Migdal Ha’emek, in the northern part of Israel. The premises where the administrative offices and Fab 1 are located are under a long-term lease from the ILA, which expires in 2032. Tower has no obligation for lease payments related to this lease through the year 2032. Tower entered into a long-term lease agreement with the ILA relating to Fab 2 for a period ending in 2049. The lease payments through 2049 relating to this lease have been paid in advance and are expensed through the operational lease period. Tower occupies certain other premises under various operating leases. The obligations under such leases were not material as of December 31, 2018. 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 . Aggregate rental expenses under Jazz operating leases were approximately $2,800, $2,800 and $2,800 for the years ended December 31, 2018, 2017 and 2016, respectively. Future minimum payments for Jazz’s non-cancelable operating building leases are approximately $2,800 for 2019 and approximately $2,400 for each of the years thereafter. In 2014, TPSCo entered into a five-year operational lease agreement with Panasonic to lease the building and facilities of its three fabs in Hokuriko, Japan for the manufacturing business of TPSCo. The parties agreed to have good faith discussions regarding the terms and conditions for extension of the term of the lease agreement, taking into account the terms provided thereunder prior to the expiration thereof and the fair market prices existing at the time of the extension. Future minimum payment under TPSCo’s non-cancelable operating building and facilities lease is $3,600 for the first quarter of 2019. The terms of lease extension In addition, certain of the Company’s subsidiaries entered into capital lease agreements for certain machinery and equipment required at the fabrication facilities for a period of up to 4 years with an option to buy each or all of the machinery and equipment after 3 years from the start of the lease period at 40% of their original value. The lease agreements contain annual interest rate of 1.85% and the assets under the lease agreements are pledged to JA Mitsui until the time at which the respective subsidiary will buy the assets. The obligations under the capital lease agreement are guaranteed by Tower except for TPSCo’s obligations under its capital lease agreements. As of December 31, 2018 and 2017 , As of December 31, 2018, the lease payments under capital leases for certain machinery and equipment required at the fabrication facilities, are $10,814 for the year ending December 31, 2019, $10,783 for the year ending December 31, 2020, $12,537 for the year ending December 31, 2021, $6,492 for the year ending December 31, 2022 and $6, 569 year D. 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. 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 2017 and 2018, 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. The framework agreement further specifies capacity allocation to the Company of up to 50% of the targeted 40,000 wafers per month fab capacity, in order to provide the Company with additional manufacturing capability and capacity. During 2017, the Company received $18,000 (net of taxes) for technological licenses, consultation and other services it provided during 2017, and in February 2019 it received an additional $9,000 (net of taxes) for technological licenses, consultation and other services it provided in 2018. G. Other Commitments Receipt of certain research and development grants from the government of Israel is subject to various conditions. In the event Tower fails to comply with such conditions, Tower may be required to repay all or a portion of the grants received. Tower believes it H. Dismissed Class Action In January 2016, a short-selling focused firm issued a short sell thesis report which the Company believes contains false and misleading information about the Company's strategy, business model and financials. Following this short sell thesis report, shareholder class actions were filed in the US and Israel against the Company, certain officers, its directors and/or its external auditor. This short sell thesis analyst acknowledged at the time of the report that he shall be assumed to be in a short position in Tower’s shares. In July 2016, the US court-appointed lead plaintiff voluntarily withdrew the action and the US court approved the voluntary dismissal of the class action in the US. In February 2018, the Israeli court granted the Company’s motion to dismiss as the Israeli plaintiff did not meet the required burden of proof. The plaintiff filed a request to appeal the Tel-Aviv |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 15 - A. Description of Ordinary Shares As of December 31, 2018, Tower had 150 million authorized ordinary shares, par value NIS 15.00 each, of which approximately 105 million were issued and 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. 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) vest over one to four year period according to various vesting schedules, and (iii) are not exercisable beyond seven or ten years from the grant date. Except for those share incentive plans described below, as of December 31, 2018 and December 31, 2017, respectively, there were approximately 26 thousands and 57 thousands , respectively, (2) Tower’s 2013 Share Incentive Plan (the "2013 Plan") In 2013, the Company adopted a new share incentive plan for directors, officers and employees of the Company. 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 , , of RSUs, ), with over In July 2018, the Company's shareholders approved the grant of the following Restricted Stock Units (“RSUs”) to the Company's CEO and members of the Board of Directors under the Company’s 2013 Share Incentive Plan: (i) 107 thousands time vested RSUs and 72 thousands 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 3 years following the grant date, for a compensation value of $3,900; and, in addition, 50 thousands performance based RSUs vesting over three years, with 65% vesting at the first anniversary of the grant, additional 25% at the second anniversary and the remaining at the third anniversary for an additional compensation value of $1,100; (ii) 14 thousands 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 3 years following the grant date; and (iii) 3 thousands 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 Share Incentive Plan: (i) 85 thousands time vested RSUs and 97 thousands performance-based RSUs to the CEO, for a total compensation value of $4,500; (ii) 12 thousands time vested RSUs to the chairman of the board of directors for a total compensation value of $300; and (iii) 3 thousands 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, 2018, approximately 483 thousands options and approximately 1.6 million RSUs were outstanding under the 2013 Plan. As of December 31, 2017, approximately 523 thousands options and approximately 1.2 million RSUs were outstanding under the 2013 Plan. Further grants may be approved subject to compensation committee, board of directors and shareholders’ approval , (3) Summary of the Status of all the Company’s Employees’ and Directors’ Share Incentive Plans i. Share Options awards: 2018 2017 2016 Number Weighted average exercise price Number Weighted average exercise price Number Weighted average exercise price Outstanding as of beginning of year 580,185 $ 9.64 2,278,089 $ 9.92 5,878,270 $ 6.84 Granted -- -- -- -- 207,890 12.19 Exercised (70,271 ) 10.19 (1,611,489 ) 9.27 (3,649,754 ) 4.82 Terminated (921 ) 9.82 (77,292 ) 25.89 (97,063 ) 21.34 Forfeited (500 ) 4.42 (9,123 ) 8.06 (61,254 ) 7.25 Outstanding as of end of year 508,493 9.58 580,185 9.64 2,278,089 9.92 Options exercisable as of end of year 485,579 $ 9.46 459,662 $ 8.51 1,606,983 $ 10.19 ii. RSU awards: 2018 2017 2016 Number Weighted Average Fair Value Number Weighted Average Fair Value Number Weighted Average Fair Value Outstanding as of beginning of year 1,245,889 $ 21.29 1,009,184 $ 14.62 773,200 $ 15.11 Granted 977,667 20.80 818,856 24.88 359,643 12.83 Converted (602,423 ) 17.86 (553,241 ) 14.71 (86,847 ) 11.45 Forfeited (21,837 ) 22.11 (28,910 ) 16.42 (36,812 ) 14.73 Outstanding as of end of year 1,599,296 $ 22.27 1,245,889 $ 21.29 1,009,184 $ 14.62 (4) Summary of Information about Employees’ Share Incentive Plans The following table summarizes information about employees’ share options outstanding as of December 31, 2018: 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 - 17.25 508,493 3.08 $ 9.58 485,579 $ 9.46 Year ended December 31, 2018 2017 2016 The intrinsic value of options exercised $ 1,416 $ 26,031 $ 40,314 The original fair value of options exercised $ 302 $ 7,202 $ 16,711 Year ended December 31, 2018 2017 2016 The intrinsic value of converted RSU's $ 15,840 $ 12,996 $ 1,177 The original fair value of converted RSU's $ 10,761 $ 8,138 $ 994 Stock-based compensation expenses were recognized in the Statement of Operations as follows: Year ended December 31, 2018 2017 2016 Cost of goods $ 3,141 $ 3,084 $ 3,920 Research and development, net 2,533 2,555 2,119 Marketing, general and administrative 6,987 6,010 3,367 Total stock-based compensation expense $ 12,661 $ 11,649 $ 9,406 (5) Weighted Average Grant-Date Fair Value of Options Granted to Employees The weighted average grant-date fair value of the options granted during 2016 to employees and directors amounted to $4.20 per option (no options were granted in 2017 and 2018). The Company utilizes the Black-Scholes model. The Company estimated the fair value, utilizing the following assumptions for the year 2016 (all in weighted averages): 2016 Risk-free interest rate 0.9%-1.3% Expected life of options 4.60 years Expected annual volatility 47%-48% Expected dividend yield None Risk free interest rate is based on yield curve rates published by the U.S. Department of Treasury. Expected life of options is based upon historical experience and represents the period of time that options granted are expected to be outstanding. Expected annual volatility is based on the volatility of Tower’s ordinary share prior to the options grant for the term identical to expected life. C. Israeli Banks’ Capital Notes and Warrants All issued and outstanding equity equivalent capital notes convertible into approximately 1.2 million ordinary shares as of December 31, 2018, have no voting rights, no maturity date, no dividend rights, are not tradable, are not registered, do not carry interest, are not linked to any index and are not redeemable. The equity equivalent capital notes are classified in shareholders’ equity. As of December 31, 2018, Bank Ha’poalim was the sole holder of such capital notes. As of December 31, 2018 , Banks’ D. Treasury Stock During 1999 and 1998, the Company funded the purchase by a trustee of an aggregate of 86,667 of Tower’s ordinary shares. These shares are classified as treasury shares. E. Dividend Restriction Tower is subject to the restrictions under the Israeli Companies Law, 1999. In addition, Tower is subject to limitations under Series G Debentures indenture, which enables distribution of F. Convertible Debentures With regard to convertible debentures, see Note 10C. |
INFORMATION ON GEOGRAPHIC AREAS
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS | NOTE 16 - A. Revenues by Geographic Area - as Percentage of Total Revenue Year ended December 31, 2018 2017 2016 USA 52 % 52 % 49 % Japan 34 32 36 Asia * 10 12 12 Europe 4 4 3 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 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, 2018 2017 Israel $ 215,419 $ 218,810 United States 239,462 214,393 Japan 202,353 201,921 Total $ 657,234 $ 635,124 C. Major Customers - as Percentage of Net Accounts Receivable Balance Accounts receivable from significant customers representing 10% or more of the net accounts receivable balance consist of two such customers , D. Major Customers - as Percentage of Total Revenue Year ended December 31, 2018 2017 2016 Customer A 33 % 30 % 35 % Customer B 7 12 12 Other customers * 16 15 14 * Represents sales to two customers accounted for 7% and 9% of sales during 2018, to two customers accounted for 7% and 8% of sales during 2017 , |
FINANCING EXPENSE, NET
FINANCING EXPENSE, NET | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
FINANCING EXPENSE, NET | NOTE 17 - Financing expense, net consists of the following: Year ended December 31, 2018 2017 2016 Interest expense $ 10,610 $ 12,623 $ 13,146 Interest income (10,762 ) (4,783 ) (1,289 ) Jazz Notes amortization 5,010 4,230 3,571 Changes in fair value (total level 3 changes in fair value of bank loans) -- -- 7,900 Series G Debentures amortization, related rate differences and hedging results 3,589 2,738 1,901 Exchange rate differences 1,064 6 (3,768 ) Bank fees and others 3,673 633 2,888 $ 13,184 $ 15,447 $ 24,349 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 18 - 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 2018, 24% for 2017 and 25% for 2016. B. Income Tax Provision The Company’s income tax provision is as follows: Year ended December 31, 2018 2017 2016 Current tax expense: Local $ 2,164 $ 3,622 $ -- Foreign (*) 9,273 6,070 5,948 Deferred tax expense (benefit): Local (see F below) 9,316 (82,370 ) -- Foreign(*) (see E below) (14,815 ) (27,210 ) (4,516 ) Income tax expense (benefit) $ 5,938 $ (99,888 ) $ 1,432 Year ended December 31, 2018 2017 2016 Profit before taxes: Domestic $ 142,831 $ 198,008 $ 168,668 Foreign (*) (3,514 ) 3,760 41,930 Total profit before taxes $ 139,317 $ 201,768 $ 210,598 (*) Foreign are amounts related to Tower’s Japanese and US subsidiaries. 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, 2018 2017 Deferred tax asset and liability - long-term: Deferred tax assets: Net operating loss carryforward $ 87,325 $ 96,443 Employees benefits and compensation 4,914 4,891 Accruals and reserves 4,738 3,546 Research and development 12,292 10,528 Others 3,615 2,935 112,884 118,343 Valuation allowance, see F below (5,834 ) (5,807 ) Deferred tax assets $ 107,050 $ 112,536 Deferred tax liabilities: Depreciation and amortization (82,001 ) (77,092 ) Gain on TPSCo acquisition (1,240 ) (15,957 ) Others (750 ) (559 ) Deferred tax liabilities $ (83,991 ) $ (93,608 ) Presented in long term deferred tax assets $ 73,460 $ 82,852 Presented in long term deferred tax liabilities $ (50,401 ) $ ( ) (*) Deferred tax assets and liabilities relating to Tower for the years 2018 and 2017 are computed based on the Israeli preferred enterprise tax rate of 7.5%. (**) In 2017, the Company adopted ASU 2015-17 regarding classification of deferred taxes, prospectively, following which, effective 2017, deferred taxes are not presented as current assets. (***) 2017 amounts are presented to conform to 2018 presentations. 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, 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 Unrecognized tax benefits Balance at January 1, 2016 $ 13,538 Additions for tax positions of current year 157 Expiration of prior years’ provision due to TJP closure (6,472 ) Additions for tax positions of prior years 779 Translation differences 967 Balance at December 31, 2016 $ 8,969 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 Tower US Holdings has completed analysis of the Act’s income tax effects. In total, 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. Upon further analysis of certain aspects of the Act and refinement of the calculations during the 12 months ending December 31, 2018, Tower US Holdings found no other adjustment was The reconciliation of the statutory tax rate to the effective tax rate is as follows: Year ended December 31, 2018 2017 2016 Tax expense computed at statutory rates, see (*) below $ 32,044 $ 48,433 $ 52,650 Effect of tax rate change on deferred tax liabilities, net(**) (478 ) (16,078 ) -- Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit (23,150 ) (33,298 ) (4,772 ) Gain on acquisition -- -- (10,450 ) Tax benefits for which deferred taxes were not recorded, see F below -- (15,103 ) (23,489 ) Change in Valuation allowance, see F below (962 ) (82,772 ) (6,212 ) Permanent differences and other, net (1,516 ) (1,070 ) (6,295 ) Income tax expense (benefit) $ 5,938 $ (99,888 ) $ 1,432 (*) The tax expense (benefit) was computed based on Tower’s regular corporate tax rate of 23% for 2018, 24% for 2017 and 25% for 2016. (**) 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, 2018, Tower had net operating loss carryforward for tax purposes of approximately $1,100,000, which may be carried forward indefinitely. For the year ended December 31, 2016, Tower recorded a valuation allowance for deferred tax assets (see C above) as it was unable to conclude that it is more-likely-than-not that such deferred tax assets would its 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, 2018, Tower US Holdings had federal net operating loss carryforward of approximately $29,500 that will begin to expire in 2022 , Tower US Holdings made a Water’s Edge election to file its 2016 California return and the next six years of California returns on this basis. As such, Tower US Holdings will not be filing on a world-wide basis for the foreseeable future. As a result of making the election, Tower US Holdings has re-computed the net operating loss carryforward for California as if it had been filing on a Water’s Edge basis. This resulted in a reduction in the amount of California net operating loss carryforward of approximately $107,000 as of December 31, 2017. There was no impact to the tax expense since Tower US Holdings previously maintained a full valuation allowance on its California net deferred tax assets. As of December 31, 2018, Tower US Holdings had California state net operating loss carryforward of approximately $7,300. The state tax loss carry forward begin to expire in 2028 , As of December 31, 2018 and 2017, 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 1999-2013 are deemed final. Tower US Holdings With few exceptions, Tower US Holdings is no longer subject to U.S. federal income tax examinations before 2015 and state and local income tax examinations before 2014. 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. |
RELATED PARTIES BALANCES AND TR
RELATED PARTIES BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES BALANCES AND TRANSACTIONS | NOTE 19 - RELATED PARTIES BALANCES AND TRANSACTIONS A. Balances The nature of the relationships involved As of December 31, 2018 2017 Long-term investment Equity investment in a limited partnership $ 110 $ 66 B. Transactions Year ended December 31, Description of the transactions 2018 2017 2016 General and Administrative expense Directors’ fees and reimbursement to directors $ 736 $ 719 $ 639 Other income ( ) Equity income ( ) from $ 44 $ 29 $ ( ) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 to be matured within 12 months from balance sheet date. |
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. 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 allowance for doubtful accounts is computed on the specific identification basis for accounts whose collectability, in the Company’s estimation, is uncertain. As of December 31, 2018 and 2017, the amounts in the allowance for doubtful accounts totaled to $4,208 and $608, respectively, $3,000 of which is included in 2018 from one customer located in the Far East region. |
Inventories | G. 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. |
Property and Equipment | H. 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 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 S below. The Company determines lease classification based on the criteria established in ASC 840. When the Company determines, based on the criteria, that a lease should be classified as capital lease, an asset and corresponding liability is recognized. Each capital lease is recorded as an asset and an obligation at an amount that is equal to the present value of the minimum lease payments over the lease term. Assets under capital lease are part of property plant and equipment and are depreciated accordingly. |
Intangible Assets and Goodwill | I. Intangible Assets and Goodwill The Company accounts for intangible assets and goodwill in accordance with ASC 350 “ Intangibles-Goodwill and Other 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 S below. |
Deferred Tax Asset and Other Long-Term Assets, Net | J. Deferred Tax Asset and Other Long-Term Assets, Net Deferred tax asset and other assets, net include: (i) deferred tax asset as described in Note 18; (ii) fair market value of derivative instrument used in hedging of Debentures Series G, see T below and (iii) prepaid long-term lease payments to the Israel Land Administration (“ILA”) for the land on which the Company’s Israeli fabs are established, net of accumulated amortization over the lease period, see also Note 14C. |
Debentures - Classification of Liabilities and Equity of Convertible Debentures | K. Debentures - Classification of Liabilities and Equity of Convertible Debentures Convertible debentures are evaluated to determine whether they include conversion features or other embedded derivatives that warrant bifurcation. The Company applies ASC 815-40 “Contract in Entity’s Own Equity” in determining whether an instrument that may be settled in Tower’s shares is also considered indexed to a company’s own stock, for the purpose of classification of the instrument as a liability or equity. |
Revenue Recognition | L. Revenue Recognition ASC Topic 606 “ Revenue from Contracts with Customers Under the modified retrospective method, prior period financial positions and results are not adjusted. There was The Company’s revenues are generated principally from sales of semiconductor wafers. The Company, to a 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 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 | M. 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 | N. Income Taxes The Company accounts for income taxes using an asset and liability approach as prescribed in ASC 7 40-10 “ Income Taxes ” (“ASC 740-10” The Company evaluates realizability 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 18. 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 | O. Earnings Per Ordinary Share Basic earnings per share are calculated in accordance with ASC 260, “ Earnings Per Share |
Comprehensive Income | P. Comprehensive Income In accordance with ASC 220 “ Comprehensive Income |
Functional Currency and Exchange Rate Income (Loss) | Q. 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 |
Stock-Based Compensation | R. Stock-Based Compensation The Company applies the provisions of ASC Topic 718 “ Compensation - Stock Compensation |
Impairment of Assets | S. 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 a 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 evaluates goodwill qualitatively for impairment at least annually or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If the Company determines that a quantitative analysis is necessary, the impairment test for goodwill is currently a two-step process. Step one consists of a comparison of the fair value of a reporting unit against its carrying amount, including the goodwill allocated to each reporting unit. If the carrying amount of the reporting unit is in excess of its fair value, step two requires the comparison. Any excess of the carrying value of the reporting unit’s goodwill over the implied fair value of the reporting unit’s goodwill is recorded as an impairment loss. The Company uses the income approach methodology of valuation that includes discounted cash flows to determine the fair value of the unit. Significant management judgment is required in the forecasts of future operating results used for this methodology. |
Fair value of Financial Instruments and Fair Value Measurements | T. Fair value of Financial Instruments and Fair Value Measurements ASC 820, " Fair Value Measurements and Disclosures 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 | U. 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 representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings. 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. |
Accounts Receivable Factoring | V. 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. |
Reclassification and Presentation | W. Reclassification and Presentation Certain amounts in prior years’ financial statements have been reclassified in order to conform to the 2018 presentation. |
Recently Adopted Accounting Pronouncements | X. Recently Adopted Accounting Pronouncements Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers”, In October 2016 the FASB issued ASU 2016-16 to require the recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party, the amendments in this Update eliminate the exception for an intra-entity transfer of an asset other than inventory. The amendments are effective January 1, 2018, and for interim periods within that year. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements. |
Recently Issued Accounting Pronouncements | Y. Recently Issued Accounting Pronouncements 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 In February 2018, the FASB issued ASU No. 2018-02 “Reporting Comprehensive Income” (“ASU 2018-02”): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU is intended to help companies reclassify certain stranded income tax effects in accumulated other comprehensive income (“AOCI”) resulting from the Tax Cuts and Jobs Act of 2017 (the “Act”), which was enacted in December 2017. ASU 2018-02 provides for the elimination of stranded tax effects of the Act by allowing reclassification of stranded tax effects from AOCI to retained earnings. This ASU is applicable only to tax effects relating to the Act, and the existing guidance regarding effects of other changes in tax laws is not affected. This ASU was early adopted for the year ended December 31, 2018 and had no material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, which clarified its guidance to simplify the measurement of goodwill by eliminating the Step 2 impairment test. The new guidance requires companies to perform the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The amendment will be effective beginning in its first quarter of fiscal year 2020. The amendment is required to be adopted prospectively. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance is effective beginning in the first quarter of fiscal year 2018. The adoption of this guidance did not have an impact on the Company’s operating results. In August 2017, the FASB issued In January 2016, the FASB issued ASU 2016-01 to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The standard requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. The provisions under this amendment are effective January 1, 2018, and for interim periods within that year. The impact of ASU 2016-01 on the Company’s consolidated financial statements was immaterial. In February 2016, the FASB issued ASU 2016-02 “ Leases” In July 2018, the FASB issued ASU 2018-10 “ Codification Improvements to Topic 842, Leases ,” to clarify application of certain aspects of the new leases standard and to remove inconsistencies within the guidance and ASU 2018-11 “ Targeted Improvements ”(“ ASU 2018-11 “), which provides for an alternate transition method. Specifically, ASU 2018-11 allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. The Company has identified all existing operating and financing leases and is in the process of determining the present value of existing lease assets and liabilities under the new guidance. The Company is also currently finalizing processes and controls to identify, classify and measure new leases in accordance with ASU 2016-02. In June 2016, the FASB issued ASU 2016-13 “ Financial Instruments Credit Losses . In November 2016, the FASB issued ASU 2016-18 to require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments are effective January 1, 2018, and for interim periods within that year. The adoption of this guidance did not have an impact on the |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following: As of December 31, 2018 2017 Raw materials $ 72,144 $ 48,220 Work in process 92,047 92,764 Finished goods 6,587 2,331 $ 170,778 $ 143,315 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Summary of Other Current Assets | Other current assets consist of the following: As of December 31, 2018 2017 Tax receivables $ 3,997 $ 9,144 Prepaid expenses 14,170 11,634 Interest on deposits and other receivables 4,585 738 $ 22,752 $ 21,516 |
LONG-TERM INVESTMENTS (Tables)
LONG-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Long-Term Investments | Long-term investments consist of the following: As of December 31, 2018 2017 Severance-pay funds, net $ 13,615 $ 13,317 Long-term interest bearing bank deposit 12,500 12,500 Others 9,830 256 $ 35,945 $ 26,073 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of December 31, 2018 2017 Original cost: Land and Buildings (including facility infrastructure) $ 347,798 $ 343,247 Machinery and equipment 2,482,609 2,282,042 $ 2,830,407 $ 2,625,289 Accumulated depreciation: Buildings (including facility infrastructure) $ (224,796 ) $ (215,515 ) Machinery and equipment (1,948,377 ) (1,774,650 ) $ (2,173,173 ) $ (1,990,165 ) $ 657,234 $ 635,124 |
Schedule of Leased Property Under Capital Leases | The following is the composition of the leased equipment under capital lease agreements included under “machinery and equipment” above: As of December 31, 2018 2017 Original cost - machinery and equipment $ 53,441 $ 16,630 Accumulated depreciation - machinery and equipment (5,500 ) (306 ) $ 47,941 $ 16,324 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Intangible Assets, Net | 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 Patents and other core technology rights 9 15,100 (15,100 ) -- Trade name 9 7,671 (7,547 ) 124 Customer relationships 15 2,600 (1,783 ) 817 Others -- 1,000 (1,000 ) -- Total identifiable intangible assets $ 170,706 $ (157,271 ) $ 13,435 Intangible assets consist of the following as of December 31, 2017: Useful Life (years) Cost Accumulated Amortization Net Technologies 4;5;9 $ 110,310 $ (103,897 ) $ 6,413 Facilities lease 19 33,500 (21,665 ) 11,835 Patents and other core technology rights 9 15,100 (15,100 ) -- Trade name 9 7,612 (7,009 ) 603 Customer relationships 15 2,600 (1,610 ) 990 Others -- 1,000 (1,000 ) -- Total identifiable intangible assets $ 170,122 $ (150,281 ) $ 19,841 |
DEFERRED TAX AND OTHER LONG-T_2
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Deferred tax asset (see Note 18) $ 73,460 $ 82,852 Prepaid long-term land lease, net (see Note 14C) 3,296 3,417 Fair value of cross currency interest rate swap (see Note 12D) 6,722 18,005 Long-term prepaid expenses and others 4,926 6,995 $ 88,404 $ 111,269 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities, Current [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consist of the following: As of December 31, 2018 2017 Tax payables $ 12,096 $ 8,567 Interest payable 986 3,160 Others 4,035 4,159 $ 17,117 $ 15,886 |
DEBENTURES (Tables)
DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Notes Payable [Abstract] | |
Schedule of Maturities of Debentures | 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 Total outstanding principal amounts of debentures $ -- $ 35,676 $ 35,676 $ 35,676 $ 17,839 $ 124,867 Accretion of carrying amount to principal amount (4,697 ) Carrying amount $ 120,170 As of December 31, 2017 Interest rate 2018 2019 2020 2021 2022 2023 and on Total Debentures Series G (see B below) 2.79 % $ -- $ -- $ 38,568 $ 38,568 $ 38,568 $ 19,283 $ 134,987 Jazz’s Notes (see C below) 8 % 58,307 -- -- -- -- -- 58,307 Total outstanding principal amounts of debentures $ 58,307 $ -- $ 38,568 $ 38,568 $ 38,568 $ 19,283 $ 193,294 Accretion of carrying amount to principal amount (11,629 ) Carrying amount $ 181,665 |
OTHER LONG-TERM DEBT (Tables)
OTHER LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans Payable [Abstract] | |
Schedule of Other Long-Term Debt | As of December 31, 2018 2017 In JPY, see also D below $ 100,118 $ 98,239 In U.S. Dollars, see also E below -- 40,000 Total long-term loan - principal amount 100,118 138,239 Deferred issuance costs -- (1,077 ) Total long-term loans 100,118 137,162 Capital leases - see Note 14C 47,195 15,854 Less - current maturities - see Note 14C (10,814 ) (52,661 ) $ 136,499 $ 100,355 |
Schedule of Repayment of Loans | 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 amounts of loans $ -- $ -- $ 22,248 $ 22,248 $ 55,622 $ 100,118 As of December 31, 2017 Interest rate 2018 2019 2020 2021 Total In U.S Dollars Libor + 2.00% $ 5,714 $ 11,429 $ 11,429 $ 11,428 $ 40,000 In JPY Tibor + 1.65%-2.00% 43,915 32,747 21,577 -- 98,239 Total outstanding principal amounts of loans $ 49,629 $ 44,176 $ 33,006 $ 11,428 $ 138,239 |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | |
Schedule of Recurring Fair Value Measurements | Recurring Fair Value Measurements Using the Indicated Inputs: 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 - asset, net position $ 4,951 $ -- $ 4,951 $ -- Marketable securities held for sale 135,227 135,227 -- -- Foreign exchange forward and cylinders - liability position (395 ) -- (395 ) -- $ 139,783 $ 135,227 $ 4,556 $ -- December 31, 2017 Quoted prices in active market for identical liability (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cross currency swap - asset, net position $ 16,455 $ -- $ 16,455 $ -- Marketable securities held for sale 113,168 113,168 -- -- Foreign exchange forward and cylinders - liability position (169 ) -- (169 ) -- Foreign exchange forward and cylinders - asset position 24 -- 24 -- $ 129,478 $ 113,168 $ 16,310 $ -- |
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, 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 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, 2017: Amortized cost Gross unrealized gains Gross Unrealized losses Estimated fair value Corporate bonds $ 98,998 $ 25 $ (683 ) $ 98,340 Non-U.S government bonds 2,730 -- (19 ) 2,711 Municipal bonds 11,950 15 (96 ) 11,869 Certificate of deposits 248 -- -- 248 $ 113,926 $ 40 $ (798 ) $ 113,168 |
Schedule of Maturities of Marketable Securities | 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 The scheduled maturities of available-for-sale marketable securities as of December 31, 2017 were as follows: Amortized cost Estimated fair value Due within one year $ 7,688 $ 7,679 Due after one year through five years 106,238 105,489 $ 113,926 $ 113,168 |
Schedule of Investments with Continuous Unrealized Losses | Investments with continuous unrealized losses for less than 12 months and 12 months or more and their related fair values as of December 31, 2018, were as indicated in the following tables: December 31, 2018 Investment with continuous unrealized losses for less than 12 months Investments with continuous unrealized losses for 12 months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate debentures $ 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 ) Investments with continuous unrealized losses for less than 12 months and 12 months or more and their related fair values as of December 31, 2017, were as indicated in the following tables: December 31, 2017 Investment with continuous unrealized losses for less than 12 months Investments with continuous unrealized losses for 12 months or greater Total Investments with continuous unrealized losses Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses Corporate debentures $ 89,133 $ (683 ) $ -- $ -- $ 89,133 $ (683 ) Non-U.S government bonds 2,711 (19 ) -- -- 2,711 (19 ) Municipal bonds 8,837 (96 ) -- -- 8,837 (96 ) Total $ 100,681 $ (798 ) $ -- $ -- $ 100,681 $ (798 ) |
EMPLOYEE RELATED LIABILITIES (T
EMPLOYEE RELATED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 Net periodic benefit cost: Service cost $ 10 $ 9 $ 12 Interest cost 73 69 85 Amortization of prior service costs -- -- (12 ) Amortization of net loss (gain) (262 ) (361 ) (333 ) Total net periodic benefit cost $ (179 ) $ (283 ) $ (248 ) 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 (376 ) 317 (316 ) Amortization of prior service costs -- -- 12 Amortization of net gain (loss) 262 361 333 Total recognized in other comprehensive income (loss) $ (114 ) $ 678 $ 29 Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (293 ) $ 395 $ (219 ) Weighted average assumptions used: Discount rate 3.80 % 4.50 % 4.80 % 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) 8.30%/11.10 % 7.20%/10.00 % 6.75%/10.00 % Ultimate rate (Pre-65/Post-65) 4.50%/4.50 % 4.50%/4.50 % 4.50%/5.00 % Year the ultimate rate is reached (Pre-65/Post-65) 2027/2027 2025/2025 2025/2022 Measurement date December 31, 2018 December 31, 2017 December 31, 2016 |
Schedule of Impact of One-Percentage-Point Change in Assumed Health Care Cost | Impact of one - Increase Decrease Effect on service cost and interest cost $ 4 $ (3 ) Effect on post-retirement benefit obligation $ 40 $ (32 ) |
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, 2018 2017 2016 Change in medical plan related benefit obligation: Medical plan related benefit obligation at beginning of period $ 1,936 $ 1,550 $ 1,781 Service cost 10 9 12 Interest cost 73 69 85 Benefits paid (15 ) (9 ) (12 ) Change in medical plan provisions -- -- -- Actuarial loss (gain) (376 ) 317 (316 ) Benefit medical plan related obligation end of period $ 1,628 $ 1,936 $ 1,550 Change in plan assets: Fair value of plan assets at beginning of period $ -- $ -- $ -- Employer contribution 15 9 12 Benefits paid (15 ) (9 ) (12 ) Fair value of plan assets at end of period $ -- $ -- $ -- Medical plan $ (1,628 ) $ (1,936 ) $ (1,550 ) As of December 31, 2018 2017 2016 Amounts recognized in statement of financial position: Current liabilities $ (65 ) $ (58 ) $ (37 ) Non-current liabilities (1,563 ) (1,878 ) (1,513 ) Net amount recognized $ (1,628 ) $ (1,936 ) $ (1,550 ) Weighted average assumptions used: Discount rate 4.50 % 3.80 % 4.50 % 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) 6.90%/13.10 % 8.30%/11.10 % 7.20%/10.00 % Health care cost trend rate assumed for next year (pre 65/ post 65 Non Medicare Advantage) 6.90%/7.90 % 8.30%/11.10 % 7.20%/10.00 % 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 |
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 2019 $ 65 2020 64 2021 68 2022 66 2023 64 2024-2028 $ 395 |
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, 2018 2017 2016 Net periodic benefit cost: Interest cost $ 749 $ 831 $ 841 Expected return on plan assets (1,427 ) (1,236 ) (1,154 ) Amortization of prior service costs 3 3 3 Amortization of net loss (gain) -- 55 34 Total net periodic benefit cost $ (675 ) $ (347 ) $ (276 ) 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 (231 ) (1,303 ) 736 Amortization of prior service costs (3 ) (3 ) (3 ) Amortization of net gain (loss) -- (55 ) (34 ) Total recognized in other comprehensive income (loss) $ (234 ) $ (1,361 ) $ 699 Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (909 ) $ (1,708 ) $ 423 Weighted average assumptions used: Discount rate 3.70 % 4.30 % 4.60 % Expected return on plan assets 6.20 % 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, 2018 2017 2016 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 $ -- $ -- $ 54 |
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, 2018 2017 2016 Change in benefit obligation: Benefit obligation at beginning of period $ 20,629 $ 19,672 $ 18,605 Interest cost 749 831 841 Benefits paid (607 ) (548 ) (496 ) Change in plan provisions -- -- -- Actuarial loss (gain) (1,792 ) 674 722 Benefit obligation end of period $ 18,979 $ 20,629 $ 19,672 Change in plan assets: Fair value of plan assets at beginning of period $ 23,235 $ 19,871 $ 18,526 Actual return on plan assets (133 ) 3,212 1,141 Employer contribution 175 700 700 Benefits paid (607 ) (548 ) (496 ) Fair value of plan assets at end of period $ 22,670 $ 23,235 $ 19,871 Funded status $ 3,691 $ 2,606 $ 199 Amounts recognized in statement of financial position: Non-current assets $ 3,691 $ 2,606 $ 199 Non-current liabilities -- -- -- Net amount recognized $ 3,691 $ 2,606 $ 199 Weighted average assumptions used: Discount rate 4.40 % 3.70 % 4.30 % 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 2019 $ 823 2020 922 2021 988 2022 1,055 2023 1,118 2024-2028 $ 6,044 |
Schedule of Weighted Average Asset Allocations | Jazz’s pension plan weighted average asset allocations on December 31, 2018, by asset category are as follows: Asset Category December 31, 2018 Target allocation 2019 Equity securities 19 % 20 % Debt securities 81 % 80 % Total 100 % 100 % |
Schedule of Assets Measured at Fair Value on a Recurring Basis | 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 $ -- $ 22,669 $ -- Total plan assets at fair value $ -- $ 22,669 $ -- Level 1 Level 2 Level 3 Investments in mutual funds $ - $ 23,235 $ - Total plan assets at fair value $ - $ 23,235 $ - |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Option Activity | 2018 2017 2016 Number Weighted average exercise price Number Weighted average exercise price Number Weighted average exercise price Outstanding as of beginning of year 580,185 $ 9.64 2,278,089 $ 9.92 5,878,270 $ 6.84 Granted -- -- -- -- 207,890 12.19 Exercised (70,271 ) 10.19 (1,611,489 ) 9.27 (3,649,754 ) 4.82 Terminated (921 ) 9.82 (77,292 ) 25.89 (97,063 ) 21.34 Forfeited (500 ) 4.42 (9,123 ) 8.06 (61,254 ) 7.25 Outstanding as of end of year 508,493 9.58 580,185 9.64 2,278,089 9.92 Options exercisable as of end of year 485,579 $ 9.46 459,662 $ 8.51 1,606,983 $ 10.19 |
Schedule of Restricted Shares Units Activity | 2018 2017 2016 Number Weighted Average Fair Value Number Weighted Average Fair Value Number Weighted Average Fair Value Outstanding as of beginning of year 1,245,889 $ 21.29 1,009,184 $ 14.62 773,200 $ 15.11 Granted 977,667 20.80 818,856 24.88 359,643 12.83 Converted (602,423 ) 17.86 (553,241 ) 14.71 (86,847 ) 11.45 Forfeited (21,837 ) 22.11 (28,910 ) 16.42 (36,812 ) 14.73 Outstanding as of end of year 1,599,296 $ 22.27 1,245,889 $ 21.29 1,009,184 $ 14.62 |
Schedule of Information about Share Options Outstanding | The following table summarizes information about employees’ share options outstanding as of December 31, 2018: 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 - 17.25 508,493 3.08 $ 9.58 485,579 $ 9.46 |
Schedule of Intrinsic and Fair Values for Options Exercised | Year ended December 31, 2018 2017 2016 The intrinsic value of options exercised $ 1,416 $ 26,031 $ 40,314 The original fair value of options exercised $ 302 $ 7,202 $ 16,711 |
Schedule of Intrinsic and Fair Values for RSU's Exercised | Year ended December 31, 2018 2017 2016 The intrinsic value of converted RSU's $ 15,840 $ 12,996 $ 1,177 The original fair value of converted RSU's $ 10,761 $ 8,138 $ 994 |
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, 2018 2017 2016 Cost of goods $ 3,141 $ 3,084 $ 3,920 Research and development, net 2,533 2,555 2,119 Marketing, general and administrative 6,987 6,010 3,367 Total stock-based compensation expense $ 12,661 $ 11,649 $ 9,406 |
Schedule of Fair Value of Options Granted | The Company estimated the fair value, utilizing the following assumptions for the year 2016 (all in weighted averages): 2016 Risk-free interest rate 0.9%-1.3% Expected life of options 4.60 years Expected annual volatility 47%-48% Expected dividend yield None |
INFORMATION ON GEOGRAPHIC ARE_2
INFORMATION ON GEOGRAPHIC AREAS AND MAJOR CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Area | Year ended December 31, 2018 2017 2016 USA 52 % 52 % 49 % Japan 34 32 36 Asia * 10 12 12 Europe 4 4 3 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, 2018 2017 Israel $ 215,419 $ 218,810 United States 239,462 214,393 Japan 202,353 201,921 Total $ 657,234 $ 635,124 |
Schedule of Revenues of Major Customers | Year ended December 31, 2018 2017 2016 Customer A 33 % 30 % 35 % Customer B 7 12 12 Other customers * 16 15 14 |
FINANCING EXPENSE, NET (Tables)
FINANCING EXPENSE, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Financing Expense | Financing expense, net consists of the following: Year ended December 31, 2018 2017 2016 Interest expense $ 10,610 $ 12,623 $ 13,146 Interest income (10,762 ) (4,783 ) (1,289 ) Jazz Notes amortization 5,010 4,230 3,571 Changes in fair value (total level 3 changes in fair value of bank loans) -- -- 7,900 Series G Debentures amortization, related rate differences and hedging results 3,589 2,738 1,901 Exchange rate differences 1,064 6 (3,768 ) Bank fees and others 3,673 633 2,888 $ 13,184 $ 15,447 $ 24,349 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The Company’s income tax provision is as follows: Year ended December 31, 2018 2017 2016 Current tax expense: Local $ 2,164 $ 3,622 $ -- Foreign (*) 9,273 6,070 5,948 Deferred tax expense (benefit): Local (see F below) 9,316 (82,370 ) -- Foreign(*) (see E below) (14,815 ) (27,210 ) (4,516 ) Income tax expense (benefit) $ 5,938 $ (99,888 ) $ 1,432 |
Schedule of Profit (Loss) Before Taxes | Year ended December 31, 2018 2017 2016 Profit before taxes: Domestic $ 142,831 $ 198,008 $ 168,668 Foreign (*) (3,514 ) 3,760 41,930 Total profit before taxes $ 139,317 $ 201,768 $ 210,598 (*) 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, 2018 2017 Deferred tax asset and liability - long-term: Deferred tax assets: Net operating loss carryforward $ 87,325 $ 96,443 Employees benefits and compensation 4,914 4,891 Accruals and reserves 4,738 3,546 Research and development 12,292 10,528 Others 3,615 2,935 112,884 118,343 Valuation allowance, see F below (5,834 ) (5,807 ) Deferred tax assets $ 107,050 $ 112,536 Deferred tax liabilities: Depreciation and amortization (82,001 ) (77,092 ) Gain on TPSCo acquisition (1,240 ) (15,957 ) Others (750 ) (559 ) Deferred tax liabilities $ (83,991 ) $ (93,608 ) Presented in long term deferred tax assets $ 73,460 $ 82,852 Presented in long term deferred tax liabilities $ (50,401 ) $ ( ) (*) Deferred tax assets and liabilities relating to Tower for the years 2018 and 2017 are computed based on the Israeli preferred enterprise tax rate of 7.5%. (**) In 2017, the Company adopted ASU 2015-17 regarding classification of deferred taxes, prospectively, following which, effective 2017, deferred taxes are not presented as current assets. (***) 2017 amounts are presented to conform to 2018 presentations. |
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, 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 Unrecognized tax benefits Balance at January 1, 2016 $ 13,538 Additions for tax positions of current year 157 Expiration of prior years’ provision due to TJP closure (6,472 ) Additions for tax positions of prior years 779 Translation differences 967 Balance at December 31, 2016 $ 8,969 |
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, 2018 2017 2016 Tax expense computed at statutory rates, see (*) below $ 32,044 $ 48,433 $ 52,650 Effect of tax rate change on deferred tax liabilities, net(**) (478 ) (16,078 ) -- Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit (23,150 ) (33,298 ) (4,772 ) Gain on acquisition -- -- (10,450 ) Tax benefits for which deferred taxes were not recorded, see F below -- (15,103 ) (23,489 ) Change in Valuation allowance, see F below (962 ) (82,772 ) (6,212 ) Permanent differences and other, net (1,516 ) (1,070 ) (6,295 ) Income tax expense (benefit) $ 5,938 $ (99,888 ) $ 1,432 (*) The tax expense (benefit) was computed based on Tower’s regular corporate tax rate of 23% for 2018, 24% for 2017 and 25% for 2016. (**) Reduction in tax rates due to the U.S. Tax Reform and reduction in income tax rates in Japan. |
RELATED PARTIES BALANCES AND _2
RELATED PARTIES BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Balances and Transactions | A. Balances The nature of the relationships involved As of December 31, 2018 2017 Long-term investment Equity investment in a limited partnership $ 110 $ 66 B. Transactions Year ended December 31, Description of the transactions 2018 2017 2016 General and Administrative expense Directors’ fees and reimbursement to directors $ 736 $ 719 $ 639 Other income ( ) Equity income ( ) from $ 44 $ 29 $ ( ) |
DESCRIPTION OF BUSINESS AND G_2
DESCRIPTION OF BUSINESS AND GENERAL (Details) | Mar. 31, 2014 |
TPSCo [Member] | |
Property, Plant and Equipment [Line Items] | |
Percentage of interests acquired | 51.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful account | $ 4,208 | $ 608 |
Major Customer Far East Region [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful account | $ 3,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 72,144 | $ 48,220 |
Work in process | 92,047 | 92,764 |
Finished goods | 6,587 | 2,331 |
Inventory, net, total | 170,778 | 143,315 |
Aggregate inventory write-downs | $ 1,206 | $ 1,352 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Tax receivables | $ 3,997 | $ 9,144 |
Prepaid expenses | 14,170 | 11,634 |
Interest on deposits and other receivables | 4,585 | 738 |
Other current assets | $ 22,752 | $ 21,516 |
LONG-TERM INVESTMENTS (Details)
LONG-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Severance-pay funds, net | $ 13,615 | $ 13,317 |
Long-term interest bearing bank deposit | 12,500 | 12,500 |
Others | 9,830 | 256 |
Long-term investments, total | $ 35,945 | $ 26,073 |
PROPERTY AND EQUIPMENT, NET (Na
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Aggregate investment grants received | $ 285,636 | $ 285,930 |
PROPERTY AND EQUIPMENT, NET (Sc
PROPERTY AND EQUIPMENT, NET (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Original cost: | $ 2,830,407 | $ 2,625,289 |
Accumulated depreciation | (2,173,173) | (1,990,165) |
Property and equipment, net | 657,234 | 635,124 |
Land and Buildings and building improvements, including facility infrastructure [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original cost: | 347,798 | 343,247 |
Accumulated depreciation | (224,796) | (215,515) |
Machinery and equipment, software and hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original cost: | 2,482,609 | 2,282,042 |
Accumulated depreciation | $ (1,948,377) | $ (1,774,650) |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Schedule of Capital Leased Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Original cost - machinery and equipment | $ 53,441 | $ 16,630 |
Accumulated depreciation - machinery and equipment | (5,500) | (306) |
Total, net | $ 47,941 | $ 16,324 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 170,706 | $ 170,122 |
Accumulated Amortization | (157,271) | (150,281) |
Net | $ 13,435 | $ 19,841 |
Technologies [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 4 years | 4 years |
Cost | $ 110,835 | $ 110,310 |
Accumulated Amortization | (108,888) | (103,897) |
Net | $ 1,947 | $ 6,413 |
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 | (22,953) | (21,665) |
Net | $ 10,547 | $ 11,835 |
Patents and other core technology rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 9 years | 9 years |
Cost | $ 15,100 | $ 15,100 |
Accumulated Amortization | (15,100) | (15,100) |
Net | ||
Trade name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 9 years | 9 years |
Cost | $ 7,671 | $ 7,612 |
Accumulated Amortization | (7,547) | (7,009) |
Net | $ 124 | $ 603 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life | 15 years | 15 years |
Cost | $ 2,600 | $ 2,600 |
Accumulated Amortization | (1,783) | (1,610) |
Net | 817 | 990 |
Others [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 1,000 | 1,000 |
Accumulated Amortization | (1,000) | (1,000) |
Net |
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, 2018 | Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Deferred tax asset (see Note 18) | [1],[2] | $ 73,460 | $ 82,852 |
Prepaid long-term land lease, net (see Note 14C) | 3,296 | 3,417 | |
Fair value of cross currency interest rate swap (see Note 12D) | 6,722 | 18,005 | |
Long-term prepaid expenses and others | 4,926 | 6,995 | |
Deferred tax and other assets, net | $ 88,404 | $ 111,269 | |
[1] | Deferred tax assets and liabilities relating to Tower for the years 2018 and 2017 are computed based on the Israeli preferred enterprise tax rate of 7.5%. | ||
[2] | In 2017, the Company adopted ASU 2015-17 regarding classification of deferred taxes, prospectively, following which, effective 2017, deferred taxes are not presented as current assets. |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities, Current [Abstract] | ||
Tax payables | $ 12,096 | $ 8,567 |
Interest payable | 986 | 3,160 |
Others | 4,035 | 4,159 |
Total other current liabilities | $ 17,117 | $ 15,886 |
DEBENTURES (Narrative) (Details
DEBENTURES (Narrative) (Details) ₪ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016USD ($) | Dec. 31, 2018USD ($)itemshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018ILS (₪) | Dec. 31, 2017ILS (₪) | |
Debt Instrument [Line Items] | ||||||
Proceeds from non-convertible debentures | $ 98,990 | $ 55,960 | ||||
Debentures Series G [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from non-convertible debentures | $ 115,000 | |||||
Principal amount | $ 125,000 | $ 135,000 | ||||
Interest rate | 2.79% | 2.79% | 2.79% | 2.79% | ||
Number of installment payments | item | 7 | |||||
Hedging transactions asset fair value | $ 4,951 | $ 16,455 | ||||
Debentures Series G [Member] | Israel, New Shekels INS [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | ₪ | ₪ 468,000 | ₪ 468,000 | ||||
Jazz's Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal | $ 58,000 | |||||
Interest rate | 8.00% | 8.00% | ||||
Number of shares issued from conversion | shares | 5,800,000 |
DEBENTURES (Schedule of Maturit
DEBENTURES (Schedule of Maturities of Debentures) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Repayment schedule (carrying amount): | ||
Accretion of carrying amount to principal amount | $ (4,697) | $ (11,629) |
Carrying amount | $ 120,170 | $ 181,665 |
Debentures Series G [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.79% | 2.79% |
Repayment schedule (carrying amount): | ||
2018 | ||
2019 | ||
2020 | 35,676 | 38,568 |
2021 | 35,676 | 38,568 |
2022 | 35,676 | 38,568 |
2023 | 17,839 | 19,283 |
Total | 124,867 | $ 134,987 |
Jazz's Notes [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.00% | |
Repayment schedule (carrying amount): | ||
2018 | $ 58,307 | |
2019 | ||
2020 | ||
2021 | ||
2022 | ||
2023 | ||
Total | 58,307 | |
Total outstanding principal amounts of debentures [Member] | ||
Repayment schedule (carrying amount): | ||
2018 | 58,307 | |
2019 | ||
2020 | 35,676 | 38,568 |
2021 | 35,676 | 38,568 |
2022 | 35,676 | 38,568 |
2023 | 17,839 | 19,283 |
Total | $ 124,867 | $ 193,294 |
OTHER LONG-TERM DEBT (Schedule
OTHER LONG-TERM DEBT (Schedule of Other Long-Term Debt) (Details) - Tower's loans (including current maturities) [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total long-term loan - principal amount | $ 100,118 | $ 138,239 |
Deferred issuance costs | (1,077) | |
Total long-term loans | 100,118 | 137,162 |
Capital leases | 47,195 | 15,854 |
Less - current maturities | (10,814) | (52,661) |
Fair value | 136,499 | 100,355 |
U.S. Dollars [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term loan - principal amount | 40,000 | |
JPY [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term loan - principal amount | $ 100,118 | $ 98,239 |
OTHER LONG-TERM DEBT (Schedul_2
OTHER LONG-TERM DEBT (Schedule of Repayment of Loan) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total outstanding principal amounts of loans [Member] | ||
Repayment schedule (carrying amount): | ||
2018 | $ 49,629 | |
2019 | 44,176 | |
2020 | 33,006 | |
2021 | 22,248 | 11,428 |
2022 | 22,248 | |
2023 and on | 55,622 | |
Total | $ 100,118 | $ 138,239 |
JPY [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.95% | Tibor + 1.65%-2.00% |
Repayment schedule (carrying amount): | ||
2018 | $ 43,915 | |
2019 | 32,747 | |
2020 | 21,577 | |
2021 | 22,248 | |
2022 | 22,248 | |
2023 and on | 55,622 | |
Total | $ 100,118 | $ 98,239 |
U.S. Dollars [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | Libor + 2.00% | |
Repayment schedule (carrying amount): | ||
2018 | $ 5,714 | |
2019 | 11,429 | |
2020 | 11,429 | |
2021 | 11,428 | |
Total | $ 40,000 |
OTHER LONG-TERM DEBT (Credit Li
OTHER LONG-TERM DEBT (Credit Line) (Narrative) (Details) - Jazz [Member] - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Feb. 28, 2018 | Dec. 31, 2018 | |
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 | |
Prime Rate [Member] | Minimum [Member] | ||
Line of Credit Facility [Line Items] | ||
Basis spread over variable interest rate | 0.00% | |
Prime Rate [Member] | Maximum [Member] | ||
Line of Credit Facility [Line Items] | ||
Basis spread over variable interest rate | 0.50% | |
LIBOR [Member] | Minimum [Member] | ||
Line of Credit Facility [Line Items] | ||
Basis spread over variable interest rate | 1.25% | |
LIBOR [Member] | Maximum [Member] | ||
Line of Credit Facility [Line Items] | ||
Basis spread over variable interest rate | 1.75% |
OTHER LONG-TERM DEBT (Loans to
OTHER LONG-TERM DEBT (Loans to TPSCo from Japanese Institutions) (Narrative) (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018JPY (¥) | Dec. 31, 2017JPY (¥) | Dec. 31, 2016USD ($) | |
TPSCo [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal | $ 100,000 | |||||
TPSCo [Member] | Term Loan 2014[Member] | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal | $ 33,000 | |||||
TPSCo [Member] | Term Loan 2014[Member] | JPY [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal | ¥ | ¥ 8,800,000 | |||||
TPSCo [Member] | Term Loan 2015 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity term | 5 years | |||||
Outstanding principal | 65,000 | |||||
TPSCo [Member] | Term Loan 2015 [Member] | JPY [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal | ¥ | ¥ 8,500,000 | |||||
TPSCo [Member] | Term Loan 2018 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity term | 7 years | |||||
Outstanding principal | $ 100,000 | |||||
Basis spread over variable interest rate | 1.95% | |||||
TPSCo [Member] | Term Loan 2018 [Member] | JPY [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal | ¥ | ¥ 11,000,000 | |||||
JA Mitsui Leasing Capital Corporation [Member] | Loan to TJT [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding principal | $ 40,000 | $ 40,000 | ||||
Basis spread over variable interest rate | 2.00% |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of swap in asset position | $ 4,951 | $ 16,455 | |
Fair value of swap in short-term liabilities | 1,771 | 1,550 | |
Fair value of swap in long-term asset | 6,722 | 18,005 | |
Effective portion of unrealized gains recorded in OCI | 1,329 | 2,758 | |
Gain (loss) of hedge on operations | (11,787) | 11,654 | |
Long term bank deposit amount | 12,500 | 12,500 | |
Marketable securities | 135,850 | 113,874 | |
Short term deposit | 120,079 | ||
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 | $ 1,231 | ||
Tower US Holdings [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value liability face amount | 42,000 | 48,000 | |
Fair value of derivative liabilities | 16 | 169 | |
Tower and Jazz Debentures [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of debentures | 127,000 | 345,000 | |
Carrying amount | 120,000 | 182,000 | |
Fair value liability face amount | 92,000 | 18,000 | |
Fair value of derivative assets | $ 379 | $ 24 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS (Schedule of Recurring Fair Value Measurements) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities held for sale | $ 135,227 | $ 113,168 |
Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap- asset, net position | 4,951 | 16,455 |
Marketable securities held for sale | 135,227 | 113,168 |
Foreign exchange forward and cylinders - liability position | (395) | (169) |
Foreign exchange forward and cylinders - asset position | 24 | |
Total assets and liabilities | 139,783 | 129,478 |
Recurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap- asset, net position | ||
Marketable securities held for sale | 135,227 | 113,168 |
Foreign exchange forward and cylinders - liability position | ||
Foreign exchange forward and cylinders - asset position | ||
Total assets and liabilities | 135,227 | 113,168 |
Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap- asset, net position | 4,951 | 16,455 |
Marketable securities held for sale | ||
Foreign exchange forward and cylinders - liability position | (395) | (169) |
Foreign exchange forward and cylinders - asset position | 24 | |
Total assets and liabilities | 4,556 | 16,310 |
Recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cross currency swap- asset, net position | ||
Marketable securities held for sale | ||
Foreign exchange forward and cylinders - liability position | ||
Foreign exchange forward and cylinders - asset position | ||
Total assets and liabilities |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS (Schedule of Marketable Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated fair value | $ 135,227 | $ 113,168 |
Gross unrealized gains | 50 | 40 |
Gross Unrealized losses | (2,083) | (798) |
Amortized cost | 137,260 | 113,926 |
Corporate Debentures [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated fair value | 109,639 | 98,340 |
Gross unrealized gains | 29 | 25 |
Gross Unrealized losses | (2,029) | (683) |
Amortized cost | 111,639 | 98,998 |
U.S government bonds [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated fair value | 5,465 | |
Gross unrealized gains | 21 | |
Gross Unrealized losses | ||
Amortized cost | 5,444 | |
Non- U.S government bonds [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated fair value | 2,423 | 2,711 |
Gross unrealized gains | ||
Gross Unrealized losses | (33) | (19) |
Amortized cost | 2,456 | 2,730 |
Municipal bonds [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated fair value | 2,235 | 11,869 |
Gross unrealized gains | 15 | |
Gross Unrealized losses | (13) | (96) |
Amortized cost | 2,248 | 11,950 |
Money market fund [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated fair value | 15,225 | |
Gross unrealized gains | ||
Gross Unrealized losses | ||
Amortized cost | 15,225 | |
Certificate of deposits [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Estimated fair value | 240 | 248 |
Gross unrealized gains | ||
Gross Unrealized losses | (8) | |
Amortized cost | $ 248 | $ 248 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS (Schedule of Maturities of Marketable Securities) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS [Abstract] | ||
Due within one year, Amortized cost | $ 16,686 | $ 7,688 |
Due after one year through five years, Amortized cost | 120,574 | 106,238 |
Due within one year, Estimated fair value | 16,661 | 7,679 |
Due after one year through five years, Estimated fair value | 118,566 | 105,489 |
Amortized cost | 137,260 | 113,926 |
Estimated fair value | $ 135,227 | $ 113,168 |
FINANCIAL INSTRUMENTS AND FAI_7
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASURMENTS (Schedule of Investments with Continuous Unrealized Losses) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Investments with continuous unrealized losses for less than 12 months, Fair value | $ 22,914 | $ 100,681 |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | (153) | (798) |
Investments with continuous unrealized losses losses for 12 months or greater, Fair value | 81,309 | |
Investments with continuous unrealized losses losses for 12 months or greater, Unrealized losses | (1,930) | |
Total Investments with continuous unrealized losses, Fair value | 104,223 | 100,681 |
Total Investments with continuous unrealized losses, Unrealized losses | (2,083) | (798) |
Corporate Debentures [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 | 19,716 | 89,133 |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | (140) | (683) |
Investments with continuous unrealized losses losses for 12 months or greater, Fair value | 79,609 | |
Investments with continuous unrealized losses losses for 12 months or greater, Unrealized losses | (1,889) | |
Total Investments with continuous unrealized losses, Fair value | 99,325 | 89,133 |
Total Investments with continuous unrealized losses, Unrealized losses | (2,029) | (683) |
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 | 2,711 |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | (19) | |
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 | 2,711 |
Total Investments with continuous unrealized losses, Unrealized losses | (33) | (19) |
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 | 8,837 |
Investments with continuous unrealized losses for less than 12 months, Unrealized losses | (13) | (96) |
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 | 8,837 |
Total Investments with continuous unrealized losses, Unrealized losses | (13) | $ (96) |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Severance pay fund, Israeli employees | $ 9,924 | ||
Long-term employee liabilties, Israeli employees | 12,335 | ||
Israeli employee termination benefits | $ 5,158 | $ 5,059 | $ 4,345 |
TPSCo [Member] | |||
Matching contribution (as a percent) | 9.00% | ||
Employee contribution (as a percent) | 1.00% | ||
Cost recognized | $ 6,700 | $ 6,706 | $ 7,015 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Postretirement Medicare Plan [Member] | |||
Net periodic benefit cost | |||
Service cost | $ 10 | $ 9 | $ 12 |
Interest cost | 73 | 69 | 85 |
Amortization of prior service costs | (12) | ||
Amortization of net loss (gain) | (262) | (361) | (333) |
Total net periodic benefit cost | (179) | (283) | (248) |
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 | (376) | 317 | (316) |
Amortization of prior service costs | 12 | ||
Amortization of net gain (loss) | 262 | 361 | 333 |
Total recognized in other comprehensive income (loss) | (114) | 678 | 29 |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ (293) | $ 395 | $ (219) |
Weighted average assumptions used: | |||
Discount rate | 3.80% | 4.50% | 4.80% |
Expected return on plan assets | |||
Rate of compensation increases | |||
Assumed health care cost trend rates: | |||
Measurement date | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Postretirement Medicare Plan [Member] | Pre 65 [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for current year | 8.30% | 7.20% | 6.75% |
Ultimate rate | 4.50% | 4.50% | 4.50% |
Year the ultimate rate is reached | 2027 | 2025 | 2025 |
Postretirement Medicare Plan [Member] | Post 65 [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for current year | 11.10% | 10.00% | 10.00% |
Ultimate rate | 4.50% | 4.50% | 5.00% |
Year the ultimate rate is reached | 2027 | 2025 | 2022 |
Pension Plan [Member] | |||
Net periodic benefit cost | |||
Interest cost | $ 749 | $ 831 | $ 841 |
Expected return on the plan's assets | (1,427) | (1,236) | (1,154) |
Amortization of prior service costs | 3 | 3 | 3 |
Amortization of net loss (gain) | 55 | 34 | |
Total net periodic benefit cost | (675) | (347) | (276) |
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 | (231) | (1,303) | 736 |
Amortization of prior service costs | (3) | (3) | (3) |
Amortization of net gain (loss) | (55) | (34) | |
Total recognized in other comprehensive income (loss) | (234) | (1,361) | 699 |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ (909) | $ (1,708) | $ 423 |
Weighted average assumptions used: | |||
Discount rate | 3.70% | 4.30% | 4.60% |
Expected return on plan assets | 6.20% | 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, 2018USD ($) | |
Postemployment Benefits [Abstract] | |
Effect on service cost and interest cost, Increase | $ 4 |
Effect on post-retirement benefit obligation, Increase | 40 |
Effect on service cost and interest cost, Decrease | (3) |
Effect on post-retirement benefit obligation, Decrease | $ (32) |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Postretirement Medicare Plan [Member] | |||
Change in medical plan related benefit obligation: | |||
Benefit obligation at beginning of period | $ 1,936 | $ 1,550 | $ 1,781 |
Service cost | 10 | 9 | 12 |
Interest cost | 73 | 69 | 85 |
Benefits paid | (15) | (9) | (12) |
Change in medical plan provisions | |||
Actuarial loss (gain) | (376) | 317 | (316) |
Benefit obligation end of period | 1,628 | 1,936 | 1,550 |
Change in plan assets: | |||
Fair value of plan assets at beginning of period | |||
Employer contribution | 15 | 9 | 12 |
Benefits paid | (15) | (9) | (12) |
Fair value of plan assets at end of period | |||
Funded status | (1,628) | (1,936) | (1,550) |
Pension Plan [Member] | |||
Change in medical plan related benefit obligation: | |||
Benefit obligation at beginning of period | 20,629 | 19,672 | 18,605 |
Interest cost | 749 | 831 | 841 |
Benefits paid | (607) | (548) | (496) |
Change in medical plan provisions | |||
Actuarial loss (gain) | (1,792) | 674 | 722 |
Benefit obligation end of period | 18,979 | 20,629 | 19,672 |
Change in plan assets: | |||
Fair value of plan assets at beginning of period | 23,235 | 19,871 | 18,526 |
Actual return on plan assets | (133) | 3,212 | 1,141 |
Employer contribution | 175 | 700 | 700 |
Benefits paid | (607) | (548) | (496) |
Fair value of plan assets at end of period | 22,670 | 23,235 | 19,871 |
Funded status | $ 3,691 | $ 2,606 | $ 199 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Postretirement Medicare Plan [Member] | |||
Amounts recognized in statement of financial position: | |||
Current liabilities | $ (65) | $ (58) | $ (37) |
Non-current liabilities | (1,563) | (1,878) | (1,513) |
Net amount recognized | $ (1,628) | $ (1,936) | $ (1,550) |
Weighted average assumptions used: | |||
Discount rate | 4.50% | 3.80% | 4.50% |
Rate of compensation increases | |||
Pension Plan [Member] | |||
Amounts recognized in statement of financial position: | |||
Non-current assets | $ 3,691 | $ 2,606 | $ 199 |
Non-current liabilities | |||
Net amount recognized | $ 3,691 | $ 2,606 | $ 199 |
Weighted average assumptions used: | |||
Discount rate | 4.40% | 3.70% | 4.30% |
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 | 6.90% | 8.30% | 7.20% |
Ultimate rate | 4.50% | 4.50% | 4.50% |
Year the ultimate rate is reached | 2029 | 2027 | 2025 |
Pre 65 [Member] | Postretirement Non Medical Plan [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | 6.90% | 8.30% | 7.20% |
Post 65 [Member] | Postretirement Medicare Plan [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | 13.10% | 11.10% | 10.00% |
Ultimate rate | 4.50% | 4.50% | 4.50% |
Year the ultimate rate is reached | 2029 | 2027 | 2025 |
Post 65 [Member] | Postretirement Non Medical Plan [Member] | |||
Assumed health care cost trend rates: | |||
Health care cost trend rate assumed for next year | 7.90% | 11.10% | 10.00% |
EMPLOYEE RELATED LIABILITIES _5
EMPLOYEE RELATED LIABILITIES (Schedule of Future Benefit Payments) (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Postretirement Medicare Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | $ 65 |
2020 | 64 |
2021 | 68 |
2022 | 66 |
2023 | 64 |
2024 - 2028 | 395 |
Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | 823 |
2020 | 922 |
2021 | 988 |
2022 | 1,055 |
2023 | 1,118 |
2024 - 2028 | $ 6,044 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Postemployment Benefits [Abstract] | |||
Prior service cost | $ 3 | $ 3 | $ 3 |
Net actuarial loss (gain) | $ 0 | $ 0 | $ 54 |
EMPLOYEE RELATED LIABILITIES _7
EMPLOYEE RELATED LIABILITIES (Schedule of Assets Measured at Fair Value) (Details) - Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
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 | 22,669 | 23,235 |
Total assets measured at fair value | 22,669 | 23,235 |
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, 2018 |
Defined Benefit Plan Disclosure [Line Items] | |
Funded percentage | 100.00% |
Target allocation 2019 | 100.00% |
Equity Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Funded percentage | 19.00% |
Target allocation 2019 | 20.00% |
Debt Securities [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Funded percentage | 81.00% |
Target allocation 2019 | 80.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 19, 2019USD ($) | Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Jazz [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Rent expenses | $ 2,800 | $ 2,800 | $ 2,800 | |
Future minimum payments of non-cancelable operating building leases | ||||
2019 | 2,800 | |||
2020 | 2,400 | |||
2021 | 2,400 | |||
2022 | 2,400 | |||
2023 | 2,400 | |||
Thereafter | $ 2,400 | |||
TPSCo [Member] | ||||
Operating Leased Assets [Line Items] | ||||
Lease term | 5 years | 5 years | ||
Future minimum payments of non-cancelable operating building leases | ||||
2019 | $ 3,600 | |||
Outstanding capital lease liability | 47,195 | $ 15,854 | ||
Outstanding capital lease liability, current | $ 10,814 | 3,032 | ||
Annual interest rate on lease | 1.85% | |||
Future minimum lease payments under capital leases | ||||
2019 | $ 10,814 | |||
2020 | 10,783 | |||
2021 | 12,537 | |||
2022 | 6,492 | |||
2023 | $ 6,569 | |||
Percentage of lease agreement on machinery and equipment | 40.00% | |||
TPSCo [Member] | Machinery and Equipment [Member] | ||||
Future minimum lease payments under capital leases | ||||
Capital lease term | 3 years | |||
Tacoma [Member] | ||||
Future minimum lease payments under capital leases | ||||
Cash received for technological license and consultation | $ 18,000 | |||
Percentage of capacity allocation | 50.00% | |||
Capacity allocation per month | item | 40,000 | |||
Tacoma [Member] | Subsequent Event [Member] | ||||
Future minimum lease payments under capital leases | ||||
Cash received for technological license and consultation | $ 9,000 |
SHAREHOLDERS' EQUITY (Ordinary
SHAREHOLDERS' EQUITY (Ordinary Shares) (Narrative) (Details) - ₪ / shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity Note [Abstract] | ||
Ordinary shares, authorized | 150,000 | 150,000 |
Ordinary shares, par value | ₪ 15 | ₪ 15 |
Ordinary shares, issued | 105,066 | 98,544 |
Ordinary shares, outstanding | 104,980 | 98,458 |
Treasury stock, shares | 86 | 86 |
SHAREHOLDERS' EQUITY (Share Opt
SHAREHOLDERS' EQUITY (Share Option Plans) (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jul. 31, 2018 | Jun. 29, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options outstanding | 508,493 | 580,185 | 2,278,089 | 5,878,270 | ||
RSU's [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards granted | 977,667 | 818,856 | 359,643 | |||
Awards outstanding | 1,599,296 | 1,245,889 | 1,009,184 | 773,200 | ||
Old Plans [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options outstanding | 26,000 | 57,000 | ||||
2013 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options outstanding | 483,000 | 523,000 | ||||
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 | 1,600,000 | 1,200,000 | ||||
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 | 978,000 | 819,000 | ||||
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 | |||||
Vesting percentage | 33.00% | |||||
Non-option equity awards granted | 107,000 | 85,000 | ||||
Compensation cost | $ 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 | 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 | |||||
Vesting percentage | 33.00% | |||||
Non-option equity awards granted | 14,000 | 12,000 | ||||
Compensation cost | $ 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 | |||||
Vesting percentage | 50.00% | |||||
Non-option equity awards granted | 3,000 | 3,000 | ||||
Compensation cost | $ 600 | $ 600 | ||||
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% | |||||
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% |
SHAREHOLDERS' EQUITY (Schedule
SHAREHOLDERS' EQUITY (Schedule of Share Option Activity) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of share options | |||
Outstanding as of beginning of year | 580,185 | 2,278,089 | 5,878,270 |
Granted | 207,890 | ||
Exercised | (70,271) | (1,611,489) | (3,649,754) |
Terminated | (921) | (77,292) | (97,063) |
Forfeited | (500) | (9,123) | (61,254) |
Outstanding as of end of year | 508,493 | 580,185 | 2,278,089 |
Options exercisable as of end of year | 485,579 | 459,662 | 1,606,983 |
Weighted average exercise price | |||
Outstanding as of beginning of year | $ 9.64 | $ 9.92 | $ 6.84 |
Granted | 12.19 | ||
Exercised | 10.19 | 9.27 | 4.82 |
Terminated | 9.82 | 25.89 | 21.34 |
Forfeited | 4.42 | 8.06 | 7.25 |
Outstanding as of end of year | 9.58 | 9.64 | 9.92 |
Options exercisable as of end of year | $ 9.46 | $ 8.51 | $ 10.19 |
SHAREHOLDERS' EQUITY (Schedul_2
SHAREHOLDERS' EQUITY (Schedule of Restricted Shares Units Activity) (Details) - RSU's [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of RSU's | |||
Outstanding as of beginning of year | 1,245,889 | 1,009,184 | 773,200 |
Granted | 977,667 | 818,856 | 359,643 |
Converted | (602,423) | (553,241) | (86,847) |
Forfeited | (21,837) | (28,910) | (36,812) |
Outstanding as of end of year | 1,599,296 | 1,245,889 | 1,009,184 |
Weighted Average Fair Value | |||
Outstanding as of beginning of year | $ 21.29 | $ 14.62 | $ 15.11 |
Granted | 20.80 | 24.88 | 12.83 |
Converted | 17.86 | 14.71 | 11.45 |
Forfeited | 22.11 | 16.42 | 14.73 |
Outstanding as of end of year | $ 22.27 | $ 21.29 | $ 14.62 |
SHAREHOLDERS' EQUITY (Schedul_3
SHAREHOLDERS' EQUITY (Schedule of Information about Share Options Outstanding) (Details) - $4.42- $17.25 [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number outstanding | shares | 508,493 |
Outstanding, Weighted-average remaining contractual life | 3 years 29 days |
Outstanding, Weighted average exercise price | $ 9.58 |
Number exercisable | shares | 485,579 |
Exercisable, Weighted average exercise price | $ 9.46 |
Exercise price, minimum | 4.42 |
Exercise price, maximum | $ 17.25 |
SHAREHOLDERS' EQUITY (Schedul_4
SHAREHOLDERS' EQUITY (Schedule of Intrinsic and Fair Values of Options Exercised) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |||
The intrinsic value of options exercised | $ 1,416 | $ 26,031 | $ 40,314 |
The original fair value of options exercised | $ 302 | $ 7,202 | $ 16,711 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
The intrinsic value of converted RSU's | $ 15,840 | $ 12,996 | $ 1,177 |
The original fair value of converted RSU's | $ 10,761 | $ 8,138 | $ 994 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | $ 12,661 | $ 11,649 | $ 9,406 |
Cost of goods [Member] | |||
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | 3,141 | 3,084 | 3,920 |
Research and development, net [Member] | |||
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | 2,533 | 2,555 | 2,119 |
Marketing, general and administrative [Member] | |||
The effect of stock- based compensation on the Statement of Operations is as follow: | |||
Total stock-based compensation expense | $ 6,987 | $ 6,010 | $ 3,367 |
SHAREHOLDERS' EQUITY (Schedul_7
SHAREHOLDERS' EQUITY (Schedule of Fair Value of Options Granted) (Details) | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Stockholders' Equity Note [Abstract] | |
Risk-free interest rate, minimum | 0.90% |
Risk-free interest rate, maximum | 1.30% |
Expected life of options | 4 years 7 months 6 days |
Expected annual volatility, minimum | 47.00% |
Expected annual volatility, maximum | 48.00% |
Expected dividend yield | |
Weighted average grant-date fair value | $ 4.20 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Segment Reporting Information [Line Items] | ||||
Percentage | 100.00% | 100.00% | 100.00% | |
USA [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percentage | 52.00% | 52.00% | 49.00% | |
Japan [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percentage | 34.00% | 32.00% | 36.00% | |
Asia [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percentage | [1] | 10.00% | 12.00% | 12.00% |
Europe [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percentage | 4.00% | 4.00% | 3.00% | |
[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, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $ 657,234 | $ 635,124 |
Israel [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 215,419 | 218,810 |
USA [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | 239,462 | 214,393 |
Japan [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-Lived Assets | $ 202,353 | $ 201,921 |
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, 2018 | Dec. 31, 2017 | |
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Percentage | 13.00% | 13.00% |
Customer B [Member] | ||
Concentration Risk [Line Items] | ||
Percentage | 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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | 33.00% | 30.00% | 35.00% | |
Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | 7.00% | 12.00% | 12.00% | |
Customer C [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | [1] | 16.00% | 15.00% | 14.00% |
Customer One [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | 7.00% | 7.00% | 5.00% | |
Customer Two [Member] | ||||
Concentration Risk [Line Items] | ||||
Percentage | 9.00% | 8.00% | 9.00% | |
[1] | Represents sales to two customers accounted for 7% and 9% of sales during 2018, to two customers accounted for 7% and 8% of sales during 2017 and to two customers accounted for 5% and 9% of sales during 2016. |
FINANCING EXPENSE, NET (Details
FINANCING EXPENSE, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |||
Interest expense | $ 10,610 | $ 12,623 | $ 13,146 |
Interest income | (10,762) | (4,783) | (1,289) |
Jazz Notes amortization | 5,010 | 4,230 | 3,571 |
Changes in fair value (total level 3 changes in fair value of bank loans) | 7,900 | ||
Series G Debentures amortization, related rate differences and hedging results | 3,589 | 2,738 | 1,901 |
Exchange rate differences | 1,064 | 6 | (3,768) |
Bank fees and others | 3,673 | 633 | 2,888 |
Financing | $ 13,184 | $ 15,447 | $ 24,349 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 29,500 | ||
Effective Statutory tax rate | 23.00% | 24.00% | 25.00% |
Preferred income subject tax rate | 7.50% | ||
Percentage of Reund | 50.00% | ||
Non-cash income tax benefit | $ 13,000 | ||
Tower [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | 1,100,000 | ||
Net operating loss carryforwards, annual utilization amount | $ 1,100,000 | ||
Effective Statutory tax rate | 7.50% | 7.50% | |
Tower US Holdings [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 107,000 | ||
Tower US Holdings [Member] | State and Local Jurisdiction [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 7,300 | ||
Jazz [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards, annual utilization amount | $ 2,100 | ||
Minimum [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Effective Statutory tax rate | 21.00% | ||
Maximum [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Effective Statutory tax rate | 35.00% |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current tax expense (benefit): | |||
Local | $ 2,164 | $ 3,622 | |
Foreign | 9,273 | 6,070 | 5,948 |
Deferred tax expense (benefit): | |||
Local (see F below) | 9,316 | (82,370) | |
Foreign (see E below) | (14,815) | (27,210) | (4,516) |
Income tax expense (benefit) | $ 5,938 | $ (99,888) | $ 1,432 |
INCOME TAXES (Schedule of Profi
INCOME TAXES (Schedule of Profit (Loss) Before Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Profit before taxes | ||||
Domestic | $ 142,831 | $ 198,008 | $ 168,668 | |
Foreign | [1] | (3,514) | 3,760 | 41,930 |
PROFIT BEFORE INCOME TAX | $ 139,317 | $ 201,768 | $ 210,598 | |
[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, 2018 | Dec. 31, 2017 | |
Deferred tax assets: | |||
Net operating loss carryforward | [1],[2] | $ 87,325 | $ 96,443 |
Employees benefits and compensation | [1],[2] | 4,914 | 4,891 |
Accruals and reserves | [1],[2] | 4,738 | 3,546 |
Research and development | [1],[2] | 12,292 | 10,528 |
Others | [1],[2] | 3,615 | 2,935 |
Gross deferred tax assets - long-term | [1],[2] | 112,884 | 118,343 |
Valuation allowance, see F below | [1],[2] | (5,834) | (5,807) |
Deferred tax assets | [1],[2] | 107,050 | 112,536 |
Deferred tax liabilities: | |||
Depreciation and amortization | [1],[2] | (82,001) | (77,092) |
Gain on TPSCo acquisition | [1],[2] | (1,240) | (15,957) |
Others | [1],[2] | (750) | (559) |
Deferred tax liabilities | [1],[2] | (83,991) | (93,608) |
Presented in long term deferred tax assets | [1],[2] | 73,460 | 82,852 |
Presented in long term deferred tax liabilities | [1],[2] | $ (50,401) | $ (63,924) |
[1] | Deferred tax assets and liabilities relating to Tower for the years 2018 and 2017 are computed based on the Israeli preferred enterprise tax rate of 7.5%. | ||
[2] | In 2017, the Company adopted ASU 2015-17 regarding classification of deferred taxes, prospectively, following which, effective 2017, deferred taxes are not presented as current assets. |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 15,286 | $ 8,969 | $ 13,538 |
Additions for tax positions of current year | 716 | 8,753 | 157 |
Reduction due to statute of limitation of prior years | (1,219) | ||
Reduction of prior years' provision | (2,436) | ||
Expiration of prior years provision due to TJP closure | (6,472) | ||
Additions for tax positions of prior years | 779 | ||
Translation differences | 967 | ||
Ending balance | $ 14,783 | $ 15,286 | $ 8,969 |
INCOME TAXES (Schedule of Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Tax Disclosure [Abstract] | ||||
Tax expense computed at statutory rates, see (*) below | [1] | $ 32,044 | $ 48,433 | $ 52,650 |
Effect of tax rate change on deferred tax liabilities, net(**) | [2] | (478) | (16,078) | |
Effect of different tax rates in different jurisdictions and Preferred Enterprise Benefit | (23,150) | (33,298) | (4,772) | |
Gain on acquisition | (10,450) | |||
Tax benefits for which deferred taxes were not recorded, see F below | (15,103) | (23,489) | ||
Change in Valuation allowance, see F below | (962) | (82,772) | (6,212) | |
Permanent differences and other, net | (1,516) | (1,070) | (6,295) | |
Income tax expense (benefit) | $ 5,938 | $ (99,888) | $ 1,432 | |
[1] | The tax expense (benefit) was computed based on Tower's regular corporate tax rate of 23% for 2018, 24% for 2017 and 25% for 2016. | |||
[2] | Reduction in tax rates due to the U.S. Tax Reform and reduction in income tax rates in Japan. |
RELATED PARTIES BALANCES AND _3
RELATED PARTIES BALANCES AND TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |||
Long-term investment | $ 110 | $ 66 | |
General and Administrative expenses | 736 | 719 | $ 639 |
Other income (expense) | $ 44 | $ 29 | $ (13) |