Tower Semiconductor to Acquire Jazz Technologies

Creates the Leading Specialty Pure-Play Foundry with Trailing Twelve Month Revenues of $443 Million

MIGDAL HAEMEK, Israel and NEWPORT BEACH, California, May 19/PRNewswire-FirstCall/ --

* Best of breed specialty process offering of CMOS Image Sensor (visible
and non-visible), Radio Frequency (RF CMOS, SiGe and BiCMOS) and Power
Management (CMOS and BCD) solutions

* Operational facilities spanning the globe with three fully owned
fabrication facilities in the United States and Israel and an
ownership interest in a fabrication facility in China

* Significant opportunity for revenue enhancement and cost saving
synergies of up to $40 million annually

Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), an independent
specialty wafer foundry, and Jazz Technologies, Inc. (AMEX: JAZ), a leader
in Analog-Intensive Mixed Signal (AIMS) foundry solutions, today announced
the signing of a definitive agreement by which Tower will acquire all of the
outstanding shares of Jazz in a stock-for-stock transaction valuing Jazz at
a fully diluted equity value of approximately $40 million, based on Tower's
closing price on NASDAQ on May 19, 2008. Under the terms of the agreement,
each outstanding share of Jazz common stock will be converted into the right
to receive 1.8 Tower ordinary shares. The total value of the transaction,
including net debt, is approximately $169 million.

"The acquisition of Jazz is an excellent strategic fit for Tower - it
creates economies of scale which allows for improved margins and strongly
complements our specialty process offering, transforming us into the leading
specialty pure-play foundry," said Russell Ellwanger, CEO of Tower. "We are
confident that we will realize significant benefits and synergies, including
a comprehensive process portfolio which expands our addressable market and
fuels a growing and more diversified customer base with highly differentiated
product platforms."

"Over the past few months, our Board has carried out a review of various
strategic alternatives to enhance stockholder value and this definitive
agreement is the result of that process," said Gil Amelio, Chairman and CEO
of Jazz. "Jazz's management looks forward to working with Tower in the coming
months to successfully implement the transaction."

"We are excited about the potential of joining together with Tower and
believe Jazz's shareholders, customers, employees and other stakeholders will
benefit from the enhanced growth, profitability and cash flow prospects of
the combined company," said Paul Pittman, Chief Financial and Administrative
Officer of Jazz.

Tower and Jazz are highly complementary and the transaction is expected
to offer significant benefits to customers and shareholders:

* The combined company will be an industry leader, bringing together
Tower's strength in CMOS Image Sensor, Non-Volatile Memory (NVM) and
RF CMOS with Jazz's expertise in Mixed Signal, Power Management (CMOS
and BCD) and RF (RF CMOS, SiGe and BiCMOS) to create one of the
broadest portfolios of specialty process technologies.

* With operational facilities now spanning the globe (United States,
Israel and China), the combined company offers capacity of
approximately 750,000 wafer starts annually (8" equivalents).

* Revenue enhancements and increased efficiencies in manufacturing and
purchasing are expected to result in substantial synergies of up to
$40 million annually.

The agreement has been unanimously approved by the boards of directors of
both Tower and Jazz and the transaction is subject to the approval of Jazz's
shareholders and other customary closing conditions. The transaction is
expected to close in the second half of 2008.

Citi acted as financial advisor and Yigal Arnon & Co. and O'Melveny &
Myers LLP acted as legal counsel to Tower. UBS Investment Bank acted as
financial advisor and Cooley Godward Kronish LLP and Meitar Liquornik Geva &
Leshem Brandwein acted as legal counsel to Jazz.

Conference Call and Webcast Information

Tower will host a conference call to discuss the acquisition of Jazz in
conjunction with the Company's first quarter 2008 financial results today,
May 20, 2008, at 10:00 a.m. Eastern Time (ET) / 5:00 p.m. Israel time. To
participate, please call: 1-800-994-4498 (U.S. toll-free number) or
972-3-918-0685 (international) and mention the ID code: TOWER. Callers in
Israel are invited to call locally by dialing 03-918-0685. The conference
call will also be Web cast live at http://www.earnings.com and at
www.towersemi.com and will be available thereafter on both Web sites for
replay for 90 days, starting at approximately 2 p.m. ET on the day of the
call.

About Tower Semiconductor Ltd.

Tower Semiconductor Ltd. is a pure-play independent specialty 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 mixed-signal & RF-CMOS, Power
Management, CMOS image-sensor and non-volatile memory technologies. To
provide world-class customer service, the company maintains two manufacturing
facilities, each with standard and specialized process technology processes:
Fab 1 ranging from 1.0 to 0.35 and Fab 2 featuring 0.18 and 0.13-micron.
Tower's web site is located at http://www.towersemi.com.

About Jazz Technologies and Jazz Semiconductor

Jazz Technologies(TM) (AMEX:JAZ - News) 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

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 Tower's proposed merger with
Jazz. 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. All statements other than statements of
historical fact are statements that could be deemed forward-looking
statements. For example, statements of expected synergies, customer benefits,
costs savings, financial guidance, the timing of closing, industry ranking,
execution of integration plans and management and organizational structure
are all 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 expected customer benefits, synergies and
costs savings will not be achieved or that the companies are unable to
successfully execute their integration strategies, 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 document as a result of new information, future
events or otherwise.

A more 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 Tower's business is included under the heading
"Risk Factors" in Tower's most recent filings on Forms 20-F, F-3 and 6-K, as
were filed with the SEC and the Israel Securities Authority. Future results
may differ materially from those previously reported. Tower does not intend
to update, and expressly disclaims any obligation to update, the information
contained in this release.

Additional Information about the Proposed Merger and Where to Find It

In connection with the proposed merger, Tower intends to file with the
SEC a Registration Statement on Form F-4 that will contain a Proxy
Statement/Prospectus and related materials and Jazz expects to mail to its
stockholders the final Proxy Statement/Prospectus containing information
about Tower, Jazz and the proposed merger. INVESTORS AND SECURITY HOLDERS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT
MATERIALS, CAREFULLY AND IN THEIR ENTIRETY, WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT TOWER, JAZZ AND THE
PROPOSED MERGER. Investors and security holders will be able to obtain free
copies of the Registration Statement on Form F-4, the Proxy
Statement/Prospectus and other relevant materials and documents filed by
Tower or Jazz with the SEC, when they become available, through the web site
maintained by the SEC at www.sec.gov. In addition, investors and security
holders may obtain free copies of the documents relating to the proposed
merger filed with the SEC by Tower by directing a request by mail to Tower
Semiconductor Ltd, P.O. BOX 619, Migdal Haemek, Israel 23105, Attn: Investor
Relations or by telephone at +972-4-650-6936. Investors and security holders
may obtain free copies of the documents relating to the proposed merger filed
with the SEC by Jazz by directing a request by mail to Jazz Technologies,
Inc., 4321 Jamboree Road, Newport Beach, California 92660, Attn: Investor
Relations or by telephone at 949-435-8181.

Tower, Jazz and their respective executive officers and directors, under
SEC rules, may be deemed to be participants in the solicitation of proxies
from the stockholders of Jazz in connection with the proposed merger.
Investors and security holders may obtain information regarding the special
interests of these executive officers and directors in the proposed merger by
reading the Proxy Statement/Prospectus filed with the SEC when it becomes
available. Additional information regarding Tower's executive officers and
directors is included in Tower's Form 20-F for the year ended December 31,
2006, which was filed with the SEC on June 25, 2007. Additional information
regarding the executive officers and directors of Jazz is included in Jazz's
Proxy Statement for its 2008 Annual Meeting of Stockholders, which was filed
with the SEC on April 7, 2008. These documents are available free of charge
at the SEC's web site at http://www.sec.gov and are also available free of
charge from Investor Relations at Tower and Jazz by contacting Tower and
Jazz as described above.

Tower Semiconductor: Jazz Technologies:
Limor Asif Melinda Jarrell
+972-4-650-6936 +1-949-435-8181
limoras@towersemi.com melinda.jarrell@jazzsemi.com

Tower Investor Relations Contact: Jazz Investor Relations Contact:
Ryan Bright Linda Rothemund
+972-239-5119 ext. 159 +1-415-445-3236
rbright@sheltongroup.com linda@marketstreetpartners.com

Source: Tower Semiconductor Ltd

Tower Semiconductor: Limor Asif, +972-4-650-6936, limoras@towersemi.com; Tower Investor Relations Contact: Ryan Bright, +972-239-5119 ext. 159, rbright@sheltongroup.com; Jazz Technologies: Melinda Jarrell, +1-949-435-8181, melinda.jarrell@jazzsemi.com; Jazz Investor Relations Contact: Linda Rothemund, +1-415-445-3236, linda@marketstreetpartners.com

2008-05-19 19:05:45 0365768 PRNEWSWIRE