Tower Semiconductor Announces Higher Third Quarter Revenue Guidance

Third Quarter Revenue Guidance Calls for 30% Sequential Growth and 34% Year-over-Year Growth, Representing Company Record Revenue

MIGDAL HAEMEK, Israel – September 2, 2009 – Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), an independent specialty foundry, today announced it expects third quarter revenue to exceed the company’s previous guidance given on August 12, 2009 due to increased customer demand. The company now expects third quarter revenue to be between $77 million and $80 million, which is higher than the previous guidance with a mid-range representing a 30% increase from previous quarter revenues of $60.6 million and a 34% increase year over year, representing company record revenue.

Russell Ellwanger, chief executive officer of Tower Semiconductor, said: “We are experiencing increased customer demand in most all product segments and increased utilization rates in all three of our fabs (fab1, fab2, Newport Beach). The new mid-range guidance of $78.5 million would be the highest revenue in the company's history, coupled with greatly improved Ebitda performance. The fourth quarter promises continued strong quarter over quarter and year over year growth.”

About Tower Semiconductor, Ltd. and Jazz Semiconductor, Inc.

Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM) is a global specialty foundry leader and its fully owned subsidiary Jazz Semiconductor, a Tower Group Company is a leader in Analog-Intensive Mixed-Signal (AIMS) foundry solutions. Tower and Jazz manufacture integrated circuits with geometries ranging from 1.0 to 0.13-micron and provide industry leading design enablement tools to allow complex designs to be achieved quickly and more accurately. Tower and Jazz offer a broad range of process technologies including Digital, Mixed-Signal and RFCMOS, HV CMOS, BCD, Non-Volatile Memory (NVM), Embedded NVM, MEMS, and CMOS Image Sensors. To provide world-class customer service, Tower and Jazz maintain two manufacturing facilities in Israel and one in the U.S. with additional manufacturing capacity available in China through partnerships with ASMC and HHNEC. For more information, please visit www.towersemi.com and www.jazzsemi.com.