Tower Semiconductor Hires Senior-Level Executive to Broaden Global Position

Tuesday February 25, 8:03 am ET MIGDAL HAEMEK, Israel & SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 25, 2003-- Tower Semiconductor Ltd. (NASDAQ: TSEM; TASE: TSEM) has hired Harold A. Blomquist as senior vice president of Tower Semiconductor Ltd. and chief executive officer of Tower Semiconductor USA, the company's U.S. subsidiary Blomquist has been given a broad mandate to enhance Tower's global market presence and marketing and sales activities. To fulfill this mission, he will direct the company's business development activities on a global basis from the company's headquarters in Israel and from the headquarters of its American subsidiary in San Jose, Calif.

Dr. Yoav Nissan-Cohen, co-CEO of Tower, said, "Tower has stepped up its efforts to build a leadership position in the global semiconductor industry. This includes more fully utilizing Fab 2's capacity and planning for a third fab to keep Tower on the leading edge of technology and innovation. Having led emerging and established semiconductor companies to success, Harold brings the capabilities and expertise that will help Tower to attain these goals, and we welcome him to the team."

"Tower is embarking on a new phase of growth with the introduction of advanced technologies in Fab 2," said Blomquist. "As an industry leader in CMOS image sensors and embedded flash memory, Tower is committed to providing customers all over the world with exceptional, specialty foundry services, a wide range of intellectual property and other differentiated processes and services. With this outstanding foundation, we have the opportunity to increase our global market share. I am excited about my role in this strategy, and look forward to bringing a new level of achievement and excellence to the company. Tower has talented and dedicated people, and I am confident the team can make it happen."

Blomquist has more than 16 years of executive-level experience in the semiconductor industry. Most recently, he served as president and CEO of ZMD America, Inc. Previous to that, Blomquist held various executive positions over an 11-year period at AMI Semiconductor, a global supplier of digital and mixed-signal application specific integrated circuits (ASICs) and silicon foundry services. After forming AMI subsidiaries in Germany and Japan, Blomquist served as senior vice president of AMI. In that position, he was responsible for AMI's worldwide business operations, leading all six P&L units of the company. Concurrently, he held the positions of chairman and CEO of AMI GmbH in Dresden, Germany and president and representative director of AMI Japan Co. Ltd. in Tokyo. During his tenure at AMI, Blomquist helped to shape the company's global business development strategy, achieving growth in annual revenue from less than $85 million in 1990 to more than $385 million in 2000.

Before joining AMI, Blomquist held positions of increasing responsibility at several semiconductor firms, including Texas Instruments, Inmos and General Semiconductor. Blomquist received a bachelor's degree in electrical engineering from the University of Utah, where he also majored in business management.

About Tower Semiconductor USA
Tower Semiconductor USA, a wholly owned subsidiary of Tower Semiconductor Ltd., handles marketing, sales and technical support for Tower's customers in the United States. Tower USA maintains headquarters in San Jose, Calif.

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 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. Potential risks and uncertainties include, without limitation, risks and uncertainties associated with (i) obtaining required approvals of the shareholders of the Company and regulatory authorities, to the amendment to the Fab 2 investment agreements, (ii) raising $22 million before the end of 2003, which is a condition to our major shareholders payment of the remaining portion of the fifth milestone, (iii) conditions in the market for foundry manufacturing services and in the market for semiconductor products generally, (iv) obtaining additional business from new and existing customers, (v) obtaining additional financing for the Fab 2 project from wafer partners and/or equity partners and/or other sources, (vi) any failure by Tower to raise additional funding by the deadlines set forth in its agreement with its banks and/or a failure by Tower to reach an agreement with its banks to extend the deadlines to raise additional financing in 2003 and/or failure by Tower to get the approval of its banks to the amendment to the investment agreements, which would result in an event of default of Tower's loan agreement, in which event the banks would have the right to call the loans and exercise its liens against Tower's assets, (vii) a declaration of default by Tower's wafer partners, financial investors and the Investment Center of the State of Israel should Tower's banks call the loans, (viii) satisfaction of all other conditions under the agreements with the Fab 2 equity and wafer partners, the Israeli Investment Center and Tower's banks, (ix) completing the construction of a new wafer manufacturing facility, (x) successful completion of the development and/or transfer of advanced CMOS process technologies to be utilized in Tower's existing facility and in Fab 2, (xi) market acceptance and competitiveness of the products to be manufactured by Tower for customers using these technologies, (xii) ramp-up of production at Fab 2 and (xiii) if we fail to meet certain sales levels and other conditions, we may lose our exclusive foundry license with Saifun.A more complete discussion of risks and uncertainties that may affect the accuracy of these statements, and Tower's business generally, is included in our most recent Registration Statement on Form F-2, as filed with the Securities and Exchange Commission.