Tower Semiconductor Ltd. Pre-Announces Fourth Quarter and 2005 Revenues

MIGDAL HAEMEK, Israel --, January 4, 2006 -- Tower Semiconductor Ltd. (NASDAQ: TSEM ; TASE: TSEM), a pure-play independent specialty foundry, today announced preliminary unaudited revenues for the fourth quarter and year ended December 31, 2005.

Revenues for the fourth quarter of 2005 are expected to be approximately $31 million, which represents an increase of approximately 50% over revenues for the third quarter of 2005. Revenues for the year ended December 31, 2005 are expected to be approximately $102 million. Tower expects to release its full fourth quarter and year-end results during February 2006.

These results are based on preliminary data for the fourth quarter of 2005 and are subject to adjustments following a completion of the audit of Tower's financial statements.

The rights for Tower's previously announced rights offering are exercisable until January 12, 2006 at 5:00 p.m., New York City time (midnight, Israel time). The rights are transferable and will be listed on the Nasdaq Capital Market under the symbol TSEMR and on the Tel Aviv Stock Exchange under the symbol TSEM.R2. The rights will be listed for trading for a single day only on January 9, 2006.

About Tower Semiconductor Ltd.

Tower Semiconductor Ltd. is a pure-play independent specialty wafer foundry established in 1993. The company 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 non-volatile memory solutions, mixed-signal and CMOS image-sensor technologies. To provide world-class customer service, the company maintains two manufacturing facilities: Fab 1 has process technologies from 1.0 to 0.35 micron and can produce up to 16,000 150mm wafers per month. Fab 2 features 0.18-micron and below standard and specialized process technologies, and has the current capacity of up to 15,000 200mm wafers per month. Tower's Web site is located at www.towersemi.com.