Jazz Technologies Announces That Tower Semiconductor Has Signed Memorandum of Understanding to Restructure Tower's Debt

Business Wire, August 20, 2008

According to Tower, the MOU Provides for a $250 Million Reduction in Tower Debt, a $250 Million Increase in Tower Shareholders' Equity, a Deferral of Principal and Interest Payments and a Commitment of Additional Investment by Israel Corporation

NEWPORT BEACH, Calif. -- Jazz Technologies, Inc. (AMEX:JAZ), a leader in Analog-Intensive Mixed-Signal (AIMS) foundry solutions, which previously announced that it had signed a definitive merger agreement by which Tower Semiconductor Ltd. (NASDAQ:TSEM) (TASE:TSEM) will acquire all of the outstanding shares of Jazz in a stock-for-stock transaction, today announced that Tower has informed Jazz that Tower has signed a memorandum of understanding (MOU) with its lender banks and with Israel Corporation, a major shareholder of Tower, for the restructuring of certain of its debt. Tower states that the terms of the MOU are subject to, among other conditions, the signing of definitive documentation and the receipt of certain approvals. Tower's press release is available on Tower's website at http://www.towersemi.com.

As previously announced, Tower's registration statement on Form F-4, containing information relating to its proposed merger with Jazz, was declared effective by the Securities and Exchange Commission, clearing the way for a Jazz stockholder vote on the merger. Jazz has set September 17, 2008 as the date for the special meeting of its stockholders to vote on the proposal to approve and adopt the Agreement and Plan of Merger and Reorganization with Tower Semiconductor, to be followed by the closing of the merger.

The merger is subject to customary closing conditions, including the approval of a majority of Jazz's common stock outstanding as of the close of business on August 8, 2008, the record date for the special meeting of stockholders.

About Jazz Technologies and Jazz Semiconductor:

Jazz Technologies(TM) (AMEX:JAZ) is the parent company of Jazz Semiconductor, Inc., a leading independent wafer foundry focused on Analog-Intensive Mixed-Signal (AIMS) process technologies. The company's broad product portfolio includes digital CMOS and specialty technologies, such as RF CMOS, Analog CMOS, Silicon and SiGe BiCMOS, SiGe C-BiCMOS, Power CMOS and High Voltage CMOS. These technologies are designed for customers who seek to produce analog and mixed-signal semiconductor devices that are smaller and more highly integrated, power-efficient, feature-rich and cost-effective than those produced using standard process technologies. Jazz customers target the wireless and high-speed wireline communications, consumer electronics, automotive and industrial end markets. Jazz's executive offices and its U.S. wafer fabrication facilities are located in Newport Beach, CA. Jazz Semiconductor also has engineering and manufacturing support in Shanghai, China. For more information, please visit http://www.jazztechnologies.com and http://www.jazzsemi.com.

About Tower Semiconductor Ltd.

Tower Semiconductor Ltd. (Nasdaq:TSEM) (TASE:TSEM) is an independent specialty foundry that delivers customized solutions in a variety of advanced CMOS technologies, including digital CMOS, mixed-signal and RF (radio frequency) CMOS, CMOS image sensors, power management devices, and embedded non-volatile memory solutions. Tower's customer orientation is complemented by its uncompromising attention to quality and service. Its specialized processes and engineering expertise provides highly flexible, customized manufacturing solutions to fulfill the increasing variety of customer needs worldwide. Boasting two world-class manufacturing facilities with standard and specialized process technologies ranging from 1.0- to 0.13-micron, Tower Semiconductor provides exceptional design support and technical services to help customers sustain long-term, reliable product performance, while delivering on-time and on-budget results. More information can be found at http://www.towersemi.com.

Safe Harbor Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements concerning the terms and potential benefits of the proposed restructuring, the timing of the proposed merger of Tower with Jazz and the signing of definitive documentation and the receipt of certain approvals with respect to the Tower MOU with Tower's lender banks and Israel Corporation. These statements are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. The potential risks and uncertainties include, among others, the possibility that the merger does not close or that the closing may be delayed, that the restructuring of Tower's debt may not occur on terms set forth in the MOU or at all, that the companies may be required to modify the terms of the transaction to achieve regulatory approval or for other reasons, that prior to or after the closing of the merger, the businesses of the companies may suffer due to uncertainty, as well as other risks applicable to both Tower's and Jazz's business described in the reports filed by Tower and Jazz with the Securities and Exchange Commission (the "SEC") and, in the case of Tower, the Israel Securities Authority. These filings identify and address other important factors that could cause Tower's and Jazz's respective financial and operational results to differ materially from those contained in the forward-looking statements set forth in this document. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Tower or Jazz. Tower and Jazz are providing this information as of the date of this press release and neither Tower nor Jazz undertakes any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.