Tower and Jazz Semiconductor Join Forces with SVTC to Expand MEMS Aerospace and
Defense Customer Base

Collaboration enables SVTC customers to gain access to Jazz technology and design enablement
providing fast path to production

Overall MEMS market predicted to be $12.5 Billion in 2010, an average annual growth rate (AAGR)
of more than 20%

NEWPORT BEACH, Calif., August 20, 2009 –Tower Semiconductor, Ltd. (NASDAQ: TSEM, TASE: TSEM), and its fully owned U.S. subsidiary Jazz Semiconductor, Inc., today announced they have signed a Memorandum of Understanding (MOU) with SVTC Technologies that will expand Tower and Jazz’s Aerospace and Defense (A&D) MEMS customer base while providing SVTC’s A&D customers with access to select Jazz technology and U.S. manufacturing facilities. The collaboration will make possible the integration of advanced CMOS with existing RF and mixed-signal devices, enabling multiple functions on a single piece of silicon in A&D applications such as aircraft radar and communications devices, among others.

Under the agreement, elements of Jazz’s MEMS friendly CMOS baseline will be made available to SVTC A&D customers to facilitate the insertion of new modules into a proven CMOS flow. In addition, Jazz will make available components of its design enablement infrastructure to facilitate SVTC customers early design activity. In addition, the companies will implement a fast transfer methodology to allow Jazz customers to perform R&D at SVTC and provide SVTC customers a fast path to production at Jazz.

MEMS (Micro-electro-mechanical systems) devices are one of the fastest growing technology areas, integrating mechanical elements, sensors, actuators, and electronics on a common silicon substrate. They have proven to be a key enabling technology in A&D applications in markets such as transportation and telecommunications. According to a global forecast of the overall MEMS market by the Electronics Industry Market Research and Knowledge Network, the worldwide market for MEMS devices and production equipment was worth an estimated $5 billion in 2005, and will increase to $12.5 billion through 2010, an average annual growth rate (AAGR) of more than 20%.

“This partnership brings a strong synergy between the companies in developing and expanding our MEMS capabilities,” said Joe Bronson, Chief Executive Officer of SVTC. “Jazz already has a very strong footprint in the Aerospace and Defense industry and this collaboration will enable us to bring together their advanced CMOS with our combined MEMS expertise to develop tools and processes to meet the needs of our customers’ next-generation applications.”

“We are pleased to form this alliance with SVTC to enable their A&D customers to gain access to our U.S. manufacturing capability for MEMS technology while offering our customers a wider breadth of development options through SVTC helping both companies gain even more traction in this strong growth market. This is an important step in becoming a world leader in full flow MEMS manufacturing,” said Russell Ellwanger, Tower’s Chief Executive Officer. “I am additionally thrilled to again partner with Joe Bronson, a long time friend and mentor, and hence to grow our respective companies to the benefit of our customers.”

Jazz was one of the first pure-play foundries with MEMS manufacturing capability allowing for the industrial scaling of MEMS products in an advanced CMOS foundry environment. Tower and Jazz continue to augment their portfolio of specialty silicon technology including MEMS manufacturing along with their suite of analog and RF CMOS, high speed SiGe, and high voltage processes enhancing the ability of their customers to create and bring to market more highly integrated analog products.