A number of cost savings initiatives are being implemented, includingreduction in manufacturing and materials' cost through multiple sourcing ofmaterials and spare parts, substitution of expensive materials and parts byless expensive alternatives and price negotiations with suppliers, and areduction in sustained capital expenditures. With respect to its workforce,Tower announced today a reduction of approximately 200 employees resulting ina total reduction of approximately 400 positions in its workforce since theannouncement of the signing of the merger agreement with Jazz on May 19 ofthis year. In addition, Jazz Semiconductor's work force is reduced byapproximately 80 employees.

In addition to the elimination of overlapping positions following thecompletion of Tower's merger with Jazz, the workforce reductions announcedtoday take into consideration the current global economic downturn and itsimpact on the semiconductor industry as well as the fact that Tower has notyet received from the Israeli government grants related to its capitalinvestments from 2006 to 2008, performed in accordance with its investmentplan filed on 2005, which were promised, committed and are over two yearspast due. In response, Tower has filed a petition with the Israeli High Courtof Justice targeting an approval certificate from the State of Israel for upto $80 million of grants.

Together with the recent 15 to 20 percent increase in the United StatesDollar (USD) to New Israeli Shekel (NIS) exchange rate and the reduction inthe interest rate on Tower's outstanding bank debt as part of itsrestructuring agreement announced in September of this year, the costreduction plan is designed to improve future gross, operating and net marginsin fiscal year 2009 and beyond.

"As recently announced, we are optimistic that we will exceed ouroriginal annual savings estimate and are targeting approximately $60 millionof annual run rate cost reductions," said Russell Ellwanger, CEO of TowerSemiconductor. "Tower will continue to place a strong emphasis on costefficiencies in consideration of the current global economic downturn, whichnecessitates careful but decisive planning to further drive down expensesresulting in a leaner, stronger company poised to emerge from this downturnas the number one world-wide specialty foundry. Moving forward, we willcontinue to evaluate opportunities to improve our cost structure across theorganization, as well as accelerate our top line growth."

About Tower Semiconductor Ltd.

Tower Semiconductor Ltd. is a pure-play independent specialty waferfoundry. Tower manufactures integrated circuits with geometries ranging from1.0 to 0.13-micron; it also provides complementary technical services anddesign support. In addition to digital CMOS process technology, Tower offersadvanced mixed-signal & RF-CMOS, Power Management, CMOS image-sensor andnon-volatile memory technologies. Through access to the process portfolio ofits wholly owned subsidiary, Jazz Semiconductor, Tower offers RF CMOS, AnalogCMOS, Silicon and SiGe BiCMOS, SiGe C-BiCMOS, Power CMOS and High VoltageCMOS. To provide world-class customer service, Tower maintains twomanufacturing facilities in Israel with access to Jazz Semiconductor's fab inthe U.S. and manufacturing capacity in China through Jazz's partnerships withASMC and HHNEC. For more information, please visit http://www.towersemi.comand http://www.jazzsemi.com.

Safe Harbor:

This press release includes forward-looking statements, which are subjectto risks and uncertainties. Actual results may vary from those projected orimplied by such forward-looking statements. A complete discussion of risksand uncertainties that may affect the accuracy of forward-looking statementsincluded in this press release or which may otherwise affect Tower and Jazz'sbusiness is included under the heading "Risk Factors" in Tower's most recentfilings on Forms 20-F, F-4, F-3 and 6-K, as were filed with the Securitiesand Exchange Commission (the "SEC") and the Israel Securities Authority andJazz's most recent filings on Forms 10-K and 10-Q, as were filed with theSEC. Tower and Jazz do not intend to update, and expressly disclaim anyobligation to update, the information contained in this release.

Contacts: Tower Semiconductor Noit Levi +972-52-457-8266 noitle@towersemi.com or: Shelton Group Ryan Bright +972-239-5119 ext. 159 rbright@sheltongroup.comSOURCE Tower Semiconductor Ltd