Tower Semiconductor Licenses 0.13-micron CMOS Technology from Motorola

Tower Moves Forward with Next-Generation Technology for Fab 2

MIGDAL HAEMEK, Israel, and AUSTIN, Texas, Sept. 23 - /PRNewswire-FirstCall/ -- Tower Semiconductor (Nasdaq: TSEM; TASE: TOWER) and Motorola's Semiconductor Products Sector (SPS) have entered into an agreement for the technology transfer and licensing of 0.13-micron CMOS process technology. Motorola will transfer its all-copper, 0.13-micron HiPerMOS7 (HiP7) technology to Tower's Fab 2 facility. Product prototyping by Tower customers could begin on HiP7-based technology as early as first quarter 2003.

"Through this agreement, Tower has advanced its Fab 2 technology offerings another generation," said Dr. Yoav Nissan-Cohen, co-CEO of Tower Semiconductor. "We now have access to industry-leading 0.13-micron process technology, as well as the benefit of Motorola's extensive experience with copper interconnect technology. This will enable us to accelerate our support of new and existing customers at the 0.13-micron technology node, while extending an already productive relationship with longtime partner and customer Motorola."

Tower intends to use HiP7 as the 0.13-micron technology platform for its analog, digital and mixed-signal processes, as well as for its proprietary CMOS Image Sensor and microFLASH technologies. The transfer of HiP7-based technology to Fab 2 is slated for completion in fourth quarter 2003.

"This agreement is a win-win situation for Motorola and Tower," said Alex Pepe, vice president and director of strategy for SPS Technology & Manufacturing at Motorola. "It benefits our customers by making our technology more broadly available and ensuring capacity in the industry. This agreement also creates additional intellectual property licensing revenue for Motorola per our 'asset-light' strategy."

Pepe added, "Tower has proven itself to be one of our most effective foundry services providers. We anticipate that this latest phase of our relationship will benefit from the knowledge and trust established between us over the years of our association."

The agreement also calls for the two companies to further enhance the technology to provide compatibility with the widest range of industry-standard design tools and services. The technology is expected to be developed at a Motorola facility concurrent with the HiP7 transfer. By using Motorola's existing base line technology process, Tower expects to expedite the development of this critical technology.

The relationship between Tower and Motorola dates back to 1994. In 1998, Motorola transferred its 0.6 micron and 0.8 micron analog and mixed-signal processes to Tower's Fab 1. This occurred in record time and with excellent performance results. Motorola named Tower its Gold Supplier of the Year in 2001 and 2000, and Foundry of the Year in 1999.

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 0.18 microns; it also provides complementary manufacturing 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 microns and can produce up to 20,000 150mm wafers per month. Fab 2 features 0.18-micron and below process technologies, including foundry-standard technology, and will offer full production capacity of 33,000 200mm wafers per month. The Tower Web site is located at http://www.towersemi.com/

About Motorola
As the world's #1 producer of embedded processors, Motorola's Semiconductor Products Sector creates DigitalDNA(TM) system-on-chip solutions for a connected world. Our strong focus on wireless communications and networking enables customers to develop smarter, simpler, faster and synchronized products for the person, work team, home and automobile. Motorola's worldwide semiconductor sales were $4.9 billion (USD) in 2001. http://www.motorola.com/semiconductors

Motorola, Inc.  is a global leader in providing integrated communications and embedded electronic solutions. Sales in 2001 were $30 billion. http://www.motorola.com/

MOTOROLA and the Stylized M Logo are trademarks of Motorola, Inc. registered in the U.S. Patent and Trademark Office. All other product or service names are the property of their respective owners.

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