Tower Semiconductor Receives $20 Million of Cash Investment from Israel Corp.

MIGDAL HAEMEK, Israel – January 08, 2009 – Tower Semiconductor Ltd., an independent specialty foundry, today announced a $20 million cash investment in the Company by Israel Corp, pursuant to the agreement between the parties announced on September 25, 2008.

According to the terms of the agreement, Israel Corp. has invested $20 million for Tower’s equity equivalent capital notes based on a $0.26 value per share. The equity equivalent capital notes have no voting rights, no dividend rights, are not tradable, do not carry interest, are not linked to any index and are not redeemable.

“We are pleased that Israel Corp. continues to show its support of Tower,” commented Russell Ellwanger, chief executive officer of Tower.  “This additional capital will assist us in continuing our efforts to become the leading specialty foundry in the world and will provide needed flexibility as we continue to leverage the synergies inherent in our merger with Jazz Technologies and streamline our world-wide operations.”

About Tower Semiconductor Ltd.

Tower Semiconductor Ltd. is a pure-play independent specialty wafer foundry. Tower manufactures integrated circuits with geometries ranging from 1.0 to 0.13-micron; it also provides complementary technical services and design support. In addition to digital CMOS process technology, Tower offers advanced mixed-signal & RF-CMOS, Power Management, CMOS image-sensor and non-volatile memory technologies. Through access to the process portfolio of its wholly owned subsidiary, Jazz Semiconductor, Tower offers RF CMOS, Analog CMOS, Silicon and SiGe BiCMOS, SiGe C-BiCMOS, Power CMOS and High Voltage CMOS. To provide world-class customer service, Tower maintains two manufacturing facilities in Israel with access to Jazz Semiconductor’s fab in the U.S. and manufacturing capacity in China through Jazz’s partnerships with ASMC and HHNEC. For more information, please visit www.towersemi.com and www.jazzsemi.com.