Kilopass to Provide Tower Semiconductor Silicon-Proven Field-Programmable Non-Volatile Memory for 0.18-Micron CMOS Process.

SANTA CLARA, Calif. & MIGDAL HAEMEK, Israel -- XPM Technology Offers complementary NVM Capability to Tower's Customers for Code Storage, Analog Trimming and Security Applications

Kilopass Technology Inc., a leading provider of semiconductor non-volatile memory (NVM) intellectual property (IP) for standard CMOS logic, today announced a foundry technology agreement with Tower Semiconductor Ltd. (Nasdaq:TSEM)(TASE:TSEM). Kilopass' XPM(TM) technology enables System-on-Chip (SoC) designers to use low-cost non-volatile code and data storage, while significantly shortening an SoC's time-to-market. Based on Tower's 0.18-micron CMOS process technology, Kilopass' embedded non-volatile XPM memory technology is designed to enhance manufacturability through 100% compliance with Tower's standard CMOS rules.

"Kilopass' silicon-proven NVM technology, is an important extension to the wide NVM functionality already offered by Tower to its customers," said Ishai Naveh, vice president of non-volatile memory marketing, Tower Semiconductor USA, Inc. "The addition of this NVM capability is vital for Tower's customers in the broad consumer, security, and communications markets. By combining Kilopass' embedded non-volatile memory IP with Tower's 0.18-micron process technology, we've been able to provide our customers with the increased functionality and security that their applications require. This was achieved with no additional masking steps, low power consumption, and shortened time to market."

"We are committed to providing our customers with best-in-class field-programmable NVM solutions that enables them to meet their permanent code and data storage needs at standard CMOS process," said Charles Ng, vice-president of sales and marketing, Kilopass Technology. "By leveraging Tower's advanced 0.18-micron process platform with our XPM technology, we can deliver the cost-effective, high-density non-volatile storage requirements that customers need to build their next-generation designs."

Proven Security

Kilopass' XPM memory technology has unique security characteristics that make it effectively impossible to reverse-engineer. Because the memory block is embedded, information is secured internal to the SoC's design. There is no floating charge as with Flash technology, so low-cost passive reverse-engineering methods are not possible. In addition, an XPM memory cell has no visible indicators that would reveal its state, if the chip were to be de-layered.

About Kilopass

Kilopass Technology, Inc. was founded with the mission of becoming the industry leader in embedded non-volatile memory (NVM) technology. The Company's super-permanent memory technology is manufactured using standard commercial CMOS process, and is used for storage of firmware and security codes.

The company is headquartered at 3333 Octavius Dr. Suite 101, Santa Clara, CA 95054, USA. For more information, please visit http://www.kilopass.com, call [phone] or email [e-mail].

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 process technologies, including foundry-standard technology. When complete, Fab 2 is expected to offer full production capacity of 33,000 200mm wafers per month. The Tower Web site is located at www.towersemi.com.

Safe Harbor for Tower Semiconductor Ltd.

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.

XPM is a trademark of Kilopass Technology, Inc. (www.kilopass.com). All other trademarks and tradenames are the property of their respective owners.

Technical information is available on request ([e-mail]