Tower Semiconductor Produces Latest Wireless LAN 802.11g Chip for Atheros Communications

MIGDAL HAEMEK, Israel, September 19, 2006 -- Tower Semiconductor Ltd. (NASDAQ:TSEM; TASE: TSEM), a pure-play independent specialty foundry, today announced that Atheros Communications, Inc. (NASDAQ: ATHR), a market leader in advanced wireless solutions, selected Tower to produce its latest RF on standard digital CMOS, wireless LAN 802.11g chip, This product is now ramping production in Tower's 0.18-micron, RF on standard digital CMOS technology at its advanced Fab2, thanks to the optimization of the design cycle by Tower's design services.

The rapidly growing wireless LAN semiconductor market in which Atheros competes is estimated to be over $1.7 billion in 2006 and $3 billion in 2009.¹

Atheros used Tower's design services to implement the product's physical design, thereby expediting the chip's time to market. This highly integrated Netlist-to-GDS design project required Tower to put together the physical design of the complete chip while integrating complex proprietary circuits from Atheros. This product is the latest addition among other Atheros products already in volume production at Tower.

"Tower's design services, as applied to this project, proved invaluable," said Rick Bahr, vice president of engineering at Atheros Communications. "The design team demonstrated strong engineering and communication skills which helped reduce the design cycle of this complex chip. I look forward to future projects with Tower."

"We were delighted by this opportunity to help our customer shorten their product's time to market. Our design team rose to the challenge of implementing the physical design of this advanced RF on standard digital CMOS chip," said Yaakov Milstain, vice president and general manager of design services at Tower Semiconductor. "Using Tower's silicon proven design flow, we were able to achieve working silicon at first pass while meeting our customer's expectations."

About Tower Semiconductor Ltd.

Tower Semiconductor Ltd. is a pure-play independent specialty 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 and 0.13-micron, standard and specialized process technologies and has a current capacity of up to 15,000 200mm wafers per month. Tower's website is located at http://www.towersemi.com/.