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CUSIP No.  M87915100                    13G                    Page 1 of 8 Pages
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Schedule 13G
                                 (Rule 13d-102)

                 Information to be Included in Statements Filed
                       Pursuant to Rules 13d-1(b), (c) and
                        (d) and Amendments Thereto Filed
                            Pursuant to Rule 13d-2(b)
                                (Amendment No. )*

                            TOWER SEMICONDUCTOR LTD.
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                                (Name of Issuer)

                  Ordinary Shares, NIS 1.00 Par Value Per Share
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                         (Title of Class of Securities)

                                    M87915100
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                                 (CUSIP Number)

                               September 19, 2008
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             (Date of Event which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule
is filed:

|_|  Rule 13d-1(b)

|X|  Rule 13d-1(c)

|_|  Rule 13d-1(d)

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     *The  remainder  of this cover  page  shall be filled  out for a  reporting
person's  initial  filing on this  form with  respect  to the  subject  class of
securities,  and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.

     The  information  required in the remainder of this cover page shall not be
deemed to be "filed"  for the purpose of Section 18 of the  Securities  Exchange
Act of 1934 (the "Act") or otherwise  subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).

- -------------------- ----------------- CUSIP No. M87915100 13G Page 2 of 8 Pages - -------------------- ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS Silver Point Capital, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER SHARES 2,827,979 (See Item 4) ---------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER OWNED BY -0- ---------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER REPORTING 12,791,899 (See Item 4) ---------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER WITH -0- - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12,791,899 (See Item 4) - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 7.5%(1) - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON* IA, PN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT. (1) The percentages used herein and in the rest of this Schedule 13G are calculated based upon 160,956,313 ordinary shares outstanding as of the date hereof based on information provided by the Issuer.

- -------------------- ----------------- CUSIP No. M87915100 13G Page 3 of 8 Pages - -------------------- ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS Edward A. Mule - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER SHARES -0- ---------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER OWNED BY 2,827,979 (See Item 4) ---------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER REPORTING -0- ---------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER WITH 12,791,899 (See Item 4) - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12,791,899 (See Item 4) - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 7.5%(1) - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT.

- -------------------- ----------------- CUSIP No. M87915100 13G Page 4 of 8 Pages - -------------------- ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS Robert J. O'Shea - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- NUMBER OF 5 SOLE VOTING POWER SHARES -0- ---------------------------------------------- BENEFICIALLY 6 SHARED VOTING POWER OWNED BY 2,827,979 (See Item 4) ---------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER REPORTING -0- ---------------------------------------------- PERSON 8 SHARED DISPOSITIVE POWER WITH 12,791,899 (See Item 4) - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 12,791,899 (See Item 4) - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9) 7.5%(1) - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT.

- -------------------- ----------------- CUSIP No. M87915100 13G Page 5 of 8 Pages - -------------------- ----------------- Item 1(a) Name of Issuer: The name of the issuer is Tower Semiconductor Ltd. (the "Company"). Item 1(b) Address of Issuer's Principal Executive Offices: The Company's principal executive office is located at P.O. Box 619, Ramat Gavriel Industrial Park, Migdal Haemek 23105, Israel. Item 2(a) Name of Person Filing: This Schedule 13G is being jointly filed by Silver Point Capital, L.P., a Delaware limited partnership (the "Investment Manager"), Mr. Edward A. Mule and Robert J. O'Shea with respect to the ownership of the Ordinary Shares by Silver Point Capital Fund, L.P. (the "Fund") and Silver Point Capital Offshore Fund, Ltd. (the "Offshore Fund").(2) The Reporting Persons have entered into a Joint Filing Agreement, dated October 8, 2008, a copy of which is filed with this Schedule 13G as Exhibit A, pursuant to which the Reporting Persons have agreed to file this statement jointly in accordance with the provisions of Rule 13d-1(k)(1) under the Act. Item 2(b) Address of Principal Business Office or, if none, Residence: The address of the principal business office of each of the Reporting Persons is Two Greenwich Plaza, Greenwich, CT 06830. Item 2(c) Citizenship: Silver Point Capital, L.P. is organized as a limited partnership under the laws of the State of Delaware. Both Mr. Mule and Mr. O'Shea are U.S. citizens. Item 2(d) Title of Class of Securities: Ordinary Shares, NIS 1.00 par value per share. Item 2(e) CUSIP No.: M87915100 - ---------------------------- (2) Silver Point Capital, L.P. is the investment manager of the Fund and the Offshore Fund and by virtue of such status may be deemed to be the beneficial owner of the Ordinary Shares held by the Fund and the Offshore Fund. Silver Point Capital Management, LLC ("Management") is the general partner of Silver Point Capital, L.P. and as a result may be deemed to be the beneficial owner of the Ordinary Shares held by the Fund and the Offshore Fund. Each of Mr. Edward Mule and Mr. Robert O'Shea is a member of Management and has voting and investment power with respect to the Ordinary Shares held by the Fund and the Offshore Fund and may be deemed to be a beneficial owner of the Ordinary Shares held by the Fund and the Offshore Fund. Silver Point Capital, L.P., Management, and Messrs. Mule and O'Shea disclaim beneficial ownership of the Ordinary Shares held by the Fund and the Offshore Fund, except to the extent of any pecuniary interest, and this report shall not be deemed to be an admission that they are the beneficial owners of such securities.

- -------------------- ----------------- CUSIP No. M87915100 13G Page 6 of 8 Pages - -------------------- ----------------- Item 3 If this statement is filed pursuant to Rules 13d-1(b), or 13d-2(b), check whether the person filing is a: Not Applicable. Item 4 Ownership: A. Silver Point Capital, L.P. (a) Amount beneficially owned: 12,791,899 (b) Percent of class: 7.5% (c) Number of shares as to which such person has: (i) Sole power to vote or direct the vote: 2,827,979 (ii) Shared power to vote or direct the vote: -0- (iii) Sole power to dispose or direct the disposition: 12,791,899 (iv) Shared power to dispose or direct the disposition: -0- B. Edward A. Mule (a) Amount beneficially owned: 12,791,899 (b) Percent of class: 7.5% (c) Number of shares as to which such person has: (i) Sole power to vote or direct the vote: -0- (ii) Shared power to vote or direct the vote: 2,827,979 (iii) Sole power to dispose or direct the disposition: -0- (iv) Shared power to dispose or direct the disposition: 12,791,899 C. Robert J. O'Shea (a) Amount beneficially owned: 12,791,899 (b) Percent of class: 7.5% (c) Number of shares as to which such person has: (i) Sole power to vote or direct the vote: 0 (ii) Shared power to vote or direct the vote: 2,827,979 (iii) Sole power to dispose or direct the disposition: 0 (iv) Shared power to dispose or direct the disposition: 12,791,899

- -------------------- ----------------- CUSIP No. M87915100 13G Page 7 of 8 Pages - -------------------- ----------------- Note: Share ownership reflected in this Item 4 includes ownership of (i) warrants exercisable, within 60 days of the date set forth on the cover of this Schedule, for 6,771,510 additional Ordinary Shares, and (ii) convertible senior notes convertible, within 60 days of the date set forth on the cover of this Schedule, into 3,192,410 additional Ordinary Shares. Such warrants and convertible senior notes do not have voting rights prior to exercise or conversion, as applicable. Item 5 Ownership of Five Percent or Less of a Class: If this statement is being filed to report the fact that as of the date hereof each of the Reporting Persons has ceased to be the beneficial owner of more than five percent of the class of securities, check the following [ ]. Item 6 Ownership of More Than Five Percent on Behalf of Another Person: See response to Item 4. Item 7 Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company or Control Person: Not applicable. Item 8 Identification and Classification of Members of the Group: Not applicable. Item 9 Notice of Dissolution of Group: Not applicable. Item 10 Certification: By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as participant in any transaction having that purpose or effect.

- -------------------- ----------------- CUSIP No. M87915100 13G Page 8 of 8 Pages - -------------------- ----------------- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: October 8, 2008 Silver Point Capital, L.P. By: /s/ Frederick H. Fogel ----------------------------------- Name: Frederick H. Fogel ----------------------------------- Its: Authorized Signatory -----------------------------------

Exhibit A AGREEMENT REGARDING THE JOINT FILING OF SCHEDULE 13G The undersigned hereby agree as follows: (i) Each of them is individually eligible to use the Schedule 13G to which this Exhibit is attached, and such Schedule 13G is filed on behalf of each of them; and (ii) Each of them is responsible for the timely filing of such Schedule 13G and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. Date: October 8, 2008 Silver Point Capital, L.P. By: /s/ Frederick H. Fogel ----------------------------------- Name: Frederick H. Fogel ----------------------------------- Its: Authorized Signatory ----------------------------------- /s/ Edward A. Mule -------------------------------------------- Edward A. Mule, individually /s/ Robert J. O'Shea -------------------------------------------- Robert J. O'Shea, individually