Tower Semiconductor Ltd. — Regulatory Filings 2005

Sep 19, 2005

SanDisk Relies on Tower Semiconductor for Manufacturing Critical Parts on Its First U3-Enabled USB Flash Drive

Memory Controller Secures Distribution of Programs and Personal Preference Content

MIGDAL HAEMEK, Israel —September 19, 2005—Tower Semiconductor Ltd. (NASDAQ: TSEM; TASE: TSEM), a pure-play independent specialty foundry, today announced that SanDisk® Corporation (NASDAQ: SNDK) has Tower manufacturing the memory controller for its family of U3-enabled USB flash drives. This new product family is an addition to the array of flash storage products SanDisk has chosen to manufacture at Tower. The drives are produced on Tower’s 0.18-micron technology platform.

SanDisk and Tower have been closely cooperating to bring this device to market, enabling smart drive computing applications.

“U3 applications are specifically targeted to the market segment of more than 80 million USB flash drives a year,” said Wes Brewer, SanDisk’s vice president of consumer product marketing. “Our tight cooperation with Tower, from the early design stages, was instrumental in the development of this new family of advanced products. Tower also provides the reliable quality and capacity to achieve our goals.”

“Our wafer fab is set to meet SanDisk’s ever increasing technical requirements for their storage devices, which enable the use of portable software and personal preference applications for a wide range of users,” said Dr. Itzhak Edrei, senior vice president product lines at Tower. “We are happy to be chosen for the added values we bring SanDisk, our long term customer and partner.”

About Tower Semiconductor Ltd.

Tower Semiconductor Ltd. is a pure-play independent wafer 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-micron and below

standard and specialized process technologies, and has the current capacity of up to 15,000 200mm wafers per month. Tower’s Web site is located at http://www.towersemi.com/.

Safe Harbor

This press release includes forward-looking statements, which are subject to risks and uncertainties. Actual results may vary from those projected or implied by such forward-looking statements. A complete discussion of risks and uncertainties that may affect the accuracy of forward-looking statements included in this press release or which may otherwise affect our business is included under the heading “Risk Factors” in our most recent Annual Report on Forms 20-F and 6-K, as were filed with the Securities and Exchange Commission and the Israel Securities Authority.

Contacts:

Pacifico Inc. PR Agency Contact Mary Curtis, +1 408 293 8600 mcurtis@pacifico.com

Tower Semiconductor USA: Michael Axelrod, +1 408 330 6871 pr@towersemi.com

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