SEC Filings

20-F
TOWER SEMICONDUCTOR LTD filed this Form 20-F on 04/10/2017
Entire Document
 

CUSTOMERS, MARKETING AND SALES

Our marketing and sales strategy seeks to further solidify our position as the global specialty foundry leader, by increasing our market share at existing customers and aggressively expanding our global customer base.  We have marketing, sales, design support engineers, application engineers and customer support personnel in the United States, Korea, Taiwan, Japan, China and Israel.  In selected markets, including Europe, South America, Japan and India our marketing and sales staff is supported by independent sales representatives, who have been selected based on their industry experience, customer relationships and understanding of the semiconductor marketplace.
 
Our sales cycle is generally 8 to 26 months or longer for new customers and can be as short as 8 to 12 months for existing customers. The typical stages in the sales cycle process from initial contact until production are:
 
·
technical evaluation;
 
·
product design to our specifications, including integration of third party intellectual property;
 
·
photomask - design and third party photomask manufacturing;
 
·
silicon prototyping;
 
·
assembly and test;
 
·
validation and qualification; and
 
·
production.
 
The primary customers of our foundry and design services are fabless semiconductor companies and Integrated Device Manufacturers (IDMs). A portion of our product sales are made pursuant to long-term contracts with our customers, under which we agree to reserve manufacturing capacity at our production facilities for such customers. Our customers include many analog and mixed-signal industry leaders, serving a variety of end market segments. During the year ended December 31, 2016, we had four significant customers that each contributed between 5% to 35% of our revenues. During the year ended December 31, 2015, we had three significant customers that each contributed between 6% to 40% of our revenues. In 2014, we had four  significant customers that each contributed between 7% to 38% of our revenues.
 
The percentage of our revenues from customers located outside the United States was 51%, 56% and 55% in the years ended December 31, 2016, 2015and 2014, respectively. The following table sets forth the geographical distribution, by percentage, of our net revenues for the periods indicated:
 
   
Year ended December 31,
 
   
2016
   
2015
   
2014
 
United States          
   
49
%
   
44
%
   
45
%
Japan
   
36
%
   
41
%
   
40
%
Asia, excluding Japan          
   
12
%
   
11
%
   
11
%
Europe          
   
3
%
   
4
%
   
4
%
Total          
   
100
%
   
100
%
   
100
%
 
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