<SEC-DOCUMENT>0001178913-14-001920.txt : 20140623
<SEC-HEADER>0001178913-14-001920.hdr.sgml : 20140623
<ACCEPTANCE-DATETIME>20140602061402
ACCESSION NUMBER:		0001178913-14-001920
CONFORMED SUBMISSION TYPE:	SD
PUBLIC DOCUMENT COUNT:		2
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FILED AS OF DATE:		20140602
DATE AS OF CHANGE:		20140602

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TOWER SEMICONDUCTOR LTD
		CENTRAL INDEX KEY:			0000928876
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			L3
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		SD
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24790
		FILM NUMBER:		14882053

	BUSINESS ADDRESS:	
		STREET 1:		RAMAT GAVRIEL INDUSTRIAL PARK
		STREET 2:		PO BOX 619
		CITY:			MIGDAL HAEMEK
		STATE:			L3
		ZIP:			23105
		BUSINESS PHONE:		97246506611

	MAIL ADDRESS:	
		STREET 1:		RAMAT GAVRIEL INDUSTRIAL PARK
		STREET 2:		PO BOX 619
		CITY:			MIGDAL HAEMEK
		STATE:			L3
		ZIP:			23105
</SEC-HEADER>
<DOCUMENT>
<TYPE>SD
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Expires:&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;May 31, 2016</font></font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Estimated average burden hours per response....480.61</font></font></div>
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<div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 14pt"><font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 14pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 14pt; FONT-WEIGHT: bold">FORM</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 14pt; FONT-WEIGHT: bold"> SD</font></font></font></div>

<div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Specialized</font><font style="DISPLAY: inline; FONT-WEIGHT: bold"> Disclosu</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">r</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">e</font><font style="DISPLAY: inline; FONT-WEIGHT: bold"> Report</font></font></div>

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<div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">File Number)</font></div>
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<div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Identification No.)</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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<div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:</font></div>

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<div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB2" style="LETTER-SPACING: 9pt"><font style="DISPLAY: inline;" face="Wingdings">x </font></font>Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2013.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Introduction</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This Specialized Disclosure Report on Form SD (&#8220;Form SD&#8221;) of Tower Semiconductor Ltd. (&#8220;Tower&#8221; or &#8220;we&#8221;) for the year ended December 31, 2013 is presented to comply with Rule 13p-1 under the Securities Exchange Act of 1934 (&#8220;Rule&#8221;). The Rule was adopted by the Securities and Exchange Commission (&#8220;SEC&#8221;) to implement reporting and disclosure requirements related to &#8220;conflict minerals&#8221; as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (&#8220;Dodd-Frank Act&#8221;). Conflict minerals are defined by the SEC as columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives, which are limited to tantalum, tin, and tungsten.&#160;&#160;The Rule imposes certain reporting obligations on SEC registrants whose products contain conflict minerals that are necessary to the functionality or production of their products (such minerals are referred to as &#8220;necessary conflict minerals&#8221;), excepting conflict minerals that, prior to January 31, 2013, were located &#8220;outside of the supply chain&#8221; (as defined in the Rule). For products which contain necessary conflict minerals, the registrant must conduct in good faith a reasonable country of origin inquiry designed to determine whether any of the necessary conflict minerals originated in the Democratic Republic of the Congo (&#8220;DRC&#8221;) or an adjoining country, collectively defined as the &#8220;Covered Countries&#8221;.&#160;&#160;If, based on such inquiry, the registrant knows or has reason to believe that any of the necessary conflict minerals contained in its products originated or may have originated in a Covered Country and knows or has reason to believe that those necessary conflict minerals may not be solely from recycled or scrap sources, the registrant must conduct due diligence as a method to conclude if the necessary conflict minerals contained in those products did or did not directly or indirectly finance or benefit armed groups in the Covered Countries.&#160;&#160;Products which do not contain necessary conflict minerals that directly or indirectly finance or benefit armed groups in the Covered Countries are considered &#8220;DRC conflict free&#8221;.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We use the term &#8220;conflict free&#8221; in this Form SD in a broader sense to refer to suppliers, supply chains, smelters and refiners whose sources of conflict minerals did not or do not directly or indirectly finance or benefit armed groups in the Covered Countries.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Company Overview</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We are a pure-play independent specialty foundry dedicated to the manufacture of semiconductors. Typically, pure-play foundries do not offer products of their own, but focus on producing integrated circuits, or ICs, based on the design specifications of their customers. We manufacture semiconductors for our customers primarily based on third party designs. We currently offer the manufacture of ICs with geometries ranging from 1.0 to 45-nanometers. We also provide design support and complementary technical services.&#160;&#160;ICs manufactured by us are incorporated into a wide range of products in diverse markets, including consumer electronics, personal computers, communications, automotive, industrial and medical device products.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Overview of Tower&#8217;s Conflict Minerals Program</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As a semiconductor manufacturer, we are knowledgeable of the materials needed for our production process and products manufactured.&#160;&#160;We know that tantalum and tungsten are necessary to the production of certain of our products. These minerals are obtained, via our direct suppliers, from sources worldwide.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Tower&#8217;s policy with respect to the sourcing of conflict minerals is as follows:</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">"Conflict minerals," as defined in Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, are&#160;Columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives; or any other mineral or its derivatives determined by the Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country. Metals derived from these minerals are Tin, Tantalum, Tungsten, and Gold. Many industries, including the electronics industry, utilize Tin, Tantalum, Tungsten, and Gold. These metals are derived from minerals that are mined throughout the world, including the Democratic Republic of Congo (DRC) and adjoining countries (collectively the "Conflict Region"). Known to operate in Conflict Regions are mines under the rule of non-government military groups or unlawful military factions which may be fueling human rights violations.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">TowerJazz policy requests our suppliers to avoid sourcing metals either known to be derived from Conflict Regions or designated as not&#160;DRC Conflict-Free.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We support the position of the Global e-Sustainability Initiative (GeSI) and Electronics Industry Citizenship Coalition (EICC) to avoid the use of conflict minerals that directly or indirectly finance or benefit armed groups in Conflict Regions. We either have obtained, or are in the process of obtaining, certification from our suppliers using the EICC/GeSI Conflict-Free Smelter (CFS) Assessment Program of the origin of metals used in our manufacturing. Based upon information provided by our suppliers, TowerJazz does not knowingly use metals derived from the Conflict Regions in our manufacturing.&#8221;</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The full text of our conflict minerals sourcing policy is available at&#160;www.towerjazz.com/cm_policy.html.&#160;&#160;The content of any website referred to in this Form SD is included for general information only and is not incorporated by reference in this Form SD.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Our integrated circuits are manufactured in Tower&#8217;s own fabrication facilities (&#8220;fabs&#8221;).&#160; Although tungsten is used in our production process and a small number of our products manufactured contain Tantalum, Tower does not purchase any necessary conflict minerals directly from mines and is many steps removed in the supply chain from the mining of the necessary conflict minerals. We purchase materials used in our products from our suppliers and some of those materials may contain necessary conflict minerals that are used in our products and/or production process.&#160;&#160;We rely on our direct suppliers to assist with our reasonable country of origin inquiry and due diligence efforts, including the identification of smelters and refiners, for any necessary conflict minerals contained in the materials which they supply to us.&#160;&#160;&#160;</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Having conducted a good faith reasonable country of origin inquiry and due diligence process, Tower has concluded that during 2013 (i) Tower has manufactured and contracted to manufacture products as to which conflict minerals are necessary to the functionality or production of our products and (ii) based on a &#8220;reasonable country of origin inquiry&#8221; (RCOI) and subsequent due diligence conducted to date, Tower was unable to determine whether the necessary conflict minerals originated in the Covered Countries due to uncertainty of our suppliers&#8217; regarding the origin of the materials at the smelter level (although each smelter is designated by the supplier as a smelter that the CFSC has identified as compliant or in progress toward CFSC compliance with the relevant&#160;conflict-free smelter program assessment protocols designed for use by third party auditors).</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Below is a description of our efforts to determine whether any of the necessary conflict minerals in our products originated in the Covered Countries during 2013.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We conducted an analysis of our production process and products manufactured and found that Tungsten is used in our production process and a small number of our products manufactured contain Tantalum.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For 2013, we conducted a supply chain survey with our direct suppliers<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>to obtain country of origin information for the necessary conflict minerals in our products using the EICC-GeSI conflict minerals reporting template. That supply chain survey requests direct suppliers to identify the smelters and refiners and countries of origin of the necessary conflict minerals in products they supply to Tower. We received responses from all direct suppliers. We compared the smelters and refiners identified in the surveys against the &#8220;conflict free smelters program&#8221; of the CFSC or other independent third party audit program which designations provide country of origin information on the conflict minerals sourced by such facilities. We documented country of origin information for the smelters and refiners identified in the supply-chain survey.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This Form SD and the conflict minerals report, filed as Exhibit 1.02 hereto, are publicly available at&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">www.towerjazz.com </font>as well as the SEC&#8217;s EDGAR database at&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">www.sec.gov</font>.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The conflict minerals report required by Item 1.01 is filed as Exhibit 1.02 to this Form SD.</font></div>

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<TYPE>EX-1.02
<SEQUENCE>2
<FILENAME>exhibit_1-02.htm
<DESCRIPTION>CONFLICT MINERALS REPORT
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold; TEXT-DECORATION: underline">Exhibit 1.02</font></div>

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<div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Tower Semiconductor Ltd.</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Conflict Minerals Report</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For The Year Ended December 31, 2013</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This report for the year ended December 31, 2013 is presented to comply with Section 13(p) of the Securities Exchange Act of 1934 and Rule 13p-1 (the Rule) and Form SD thereunder.&#160;&#160;The Rule was adopted by the Securities and Exchange Commission (SEC) to implement reporting and disclosure requirements related to conflict minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The Rule imposes certain reporting obligations on SEC registrants whose manufactured products contain conflict minerals which are necessary to the functionality or production of their products. Conflict minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum and tungsten for the purposes of this assessment. These requirements apply to registrants whatever the geographic origin of the conflict minerals and whether or not they fund armed conflict.&#160;&#160;In accordance with the instructions, and related guidance, to Form SD, this conflict minerals report has not been audited by an independent private sector auditor.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">If a registrant can establish that the conflict minerals originated from sources other than the Democratic Republic of the Congo or an adjoining country (the &#8220;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Covered Countries</font>&#8221;),&#160;or from recycled and scrap sources,&#160;they must submit a Form SD which describes the Reasonable Country of Origin Inquiry completed.&#160;&#160;If a registrant has reason to believe that any of the conflict minerals in their supply chain may have originated in the Covered Countries, or if they are unable to determine the country of origin of those conflict minerals,&#160;then the issuer must exercise due diligence on the conflict minerals&#8217; source and chain of custody and submit a conflict minerals report to the SEC that includes a description of those due diligence measures.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Design and Description of Conflict Minerals Diligence Program</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Tower&#180;s due diligence processes and efforts have utilized the Organization for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected And High-Risk Areas (Second Edition, 2013) (the &#8220;OECD Guidance&#8221;).&#160;&#160;Consistent with the OECD Guidance, our due diligence in respect of 2013 consisted of a five-step process. These are not all of the measures that we took in furtherance of our conflict minerals compliance program or pursuant to the OECD Guidance.</font></font></div>

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<div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Establishment of Strong Company Management Systems</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We have communicated our conflict minerals policy to our suppliers. Our policy was provided to suppliers before and during the 2013 reporting period, following its adoption by Tower.&#160;&#160;This policy is also publicly available on our company website.&#160;&#160;We have adopted the EICC-GeSI Conflict Free Smelter program (described below) as a compliance standard for our due diligence.&#160;&#160;We have implemented a reasonable country of origin inquiry process.&#160;&#160;All responses from suppliers are recorded and stored in an electronic database.&#160;&#160;&#160;&#160;</font></font></div>

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<div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Identification and Assessment of Risk in the Supply Chain</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For due diligence purposes, we have adopted the processes and protocols of the Conflict Free Smelter Program. All conflict minerals &#8220;necessary to the functionality of the products&#8221; have been identified and the suppliers of those conflict minerals have been identified and certain smelter data has been collected from them.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We conducted a survey of our active suppliers using the template developed jointly by the companies of Electronic Industry Citizenship Coalition&#174; (EICC&#174;) and The Global e-Sustainability Initiative (GeSI), known as the CFSI Reporting Template (the Template). The Template was developed to facilitate disclosure and communication of information regarding smelters that provide material to a company&#8217;s supply chain. It includes questions regarding a company&#8217;s conflict-free policy,&#160;engagement with its direct suppliers,&#160;and a listing of the smelters the company and its suppliers use. In addition,&#160;the Template contains questions about the origin of conflict minerals included in their products,&#160;as well as supplier due diligence. Written instructions and recorded training illustrating the use of the tool is available on CFSI&#8217;s website.&#160;The Template is being widely adopted by many companies in their due diligence processes related to conflict minerals.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We implemented a plan to report conflict minerals findings to Tower&#8217;s Expert Materials Quality Engineer.&#160;&#160;Tower&#8217;s Expert Materials Quality Engineer is responsible for collecting all relevant data and formulating a proposed corporate strategy that should be implemented to address any risks identified from review of said data.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">A process has been adopted to aggregate and update the list of smelters relevant to our necessary conflict minerals procured from our suppliers.&#160;Furthermore, a process has been adopted to review supplier responses, follow up with delinquent suppliers (if applicable), and update supplier information.&#160;&#160;We will require any new suppliers to complete EICC-GeSI declarations as part of becoming an approved supplier to Tower.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Tower does not have a direct relationship with the smelters and refiners in our supply chain, nor do we perform direct audits of the entities that provide our supply chain with any necessary conflict minerals. However, we do rely upon industry efforts (for example, EICC and CFSI) to influence smelters and refineries to get audited and certified through CFSI's CFS program.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This report is available on our website at http://www.towerjazz.com/cm_policy.html and has also been filed with the SEC.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Our due diligence measures can provide only reasonable, not absolute, assurance regarding the source and chain of custody of the necessary conflict minerals.&#160;&#160;Our due diligence processes are based on the data received from our direct suppliers which in turn is based on information received by those suppliers seeking similar data within their supply chains to identify the original sources of the necessary conflict minerals.&#160;&#160;We also rely, to a large extent, on information collected through CFSI's CFS program.&#160;&#160;Such sources of information may yield inaccurate or incomplete information.</font></font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All of our direct suppliers of necessary conflict minerals for our manufactured products provided a response to our supply chain survey.</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">* Denotes smelters and refiners which have received a &#8220;conflict free smelters&#8221; designation from an independent third party audit program as of April 25, 2014.</font></div>

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