Tower Semiconductor Begins Production of a Notebook Embedded Controller developed by Winbond Israel

MIGDAL HAEMEK, Israel—June 15, 2006—Tower Semiconductor Ltd. (NASDAQ: TSEM; TASE: TSEM), a pure-play independent specialty foundry, today announced production start of an Embedded Controller for Winbond Electronics Corporation (TSEC: WEC), a leading Integrated Device Manufacturer (IDM) in Taiwan’s IC industry. The product was redesigned by Winbond’s Israeli subsidiary (National Semiconductor’s former Advanced PC Division unit acquired by Winbond in May 2005) for Tower’s manufacturing process.

This Embedded Controller, used in Notebook PC's applications, is compatible to Winbond's existing embedded controller which has become a "de-facto standard" solution in many brand name PC's.

Market analysts estimate growth of the notebook market from about 72 million units in 2005 to more than 100 million units in 2009.

Designed to provide full backward compatibility with its existing device, the product is manufactured in 0.18-micron technology, at Tower’s Fab2, and is expected to start volume shipment in Q3 of this year.

“Working with Tower on this project gave us an opportunity to recognize and utilize the advantage of being close to the silicon manufacturer”, said Jonathan Levy, President of Winbond Israel, and General Manager of the Advanced PC Product Center. “Tower’s excellent support in CAD, process integration, engineering samples and quality manufacturing helped us to meet and exceed the project goals.”

“This design win demonstrates Tower’s advantages in working with designers in the Israeli semiconductor community“, said Dani Ashkenazi, general manager of CMOS product line at Tower. “Close interaction with a local manufacturing facility is a key enabler for companies seeking advanced CMOS technology coupled with high quality customer service.”

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/.

About Winbond Electronics Corporation

Winbond Electronics Corporation, a global corporation based in Hsinchu, Taiwan is a leading manufacturer of semiconductor solutions. Winbond designs, develops, markets and sells IC solutions to the global electronics marketplace. Winbond’s primary mission is to serve the growing needs of manufacturers of computers, consumer and communication electronics. In May 2005, Winbond Electronics acquired National Semiconductor’s Advanced PC (APC) Division, the pioneer in providing many of the PC Logic solutions. Winbond Electronics has about 5000 employees worldwide with design centers in Hsinchu, Taiwan; San Jose, California and Herzelia, Israel. For more information about Winbond visit http://www.winbond-usa.com.