Tower Semiconductor to Manufacture Next-Generation MRAM from Crocus
Technology

Poised to be First Foundry with MRAM Capability, Tower will hold an equity position
in Crocus

SUNNYVALE, Calif., and MIGDAL HA’EMEK, Israel, June 18, 2009 – Crocus Technology, a premier developer of Magnetic Random Access Memory (MRAM) and Tower Semiconductor, Ltd. (Nasdaq: TSEM, TASE: TSEM), a leading global specialty foundry, today announced an agreement to port Crocus’ MRAM process technology into Tower’s manufacturing environment. As part of the exclusive agreement, Tower will perform all manufacturing steps required for Crocus’ next-generation MRAM technology in its state-of-the-art 200mm Fab2 facility. In addition to collaborating on the process port, Tower further reaffirmed the value it sees in Crocus’ unique MRAM technology by taking an equity position valued at $1.25 million.

Today’s announcement completes the establishment of Crocus’ wafer manufacturing capability and sets up a volume supply chain for its customer base. As part of the deal, Tower and Crocus will each dedicate specific equipment in Tower’s factory to the manufacture of Crocus’ MRAMs.

“Transitioning from an incubation setting to a commercial production environment is a major leap forward for Crocus,” said Jean-Pierre Braun, co-founder and CEO of Crocus Technology. “Tower is known as a leading foundry in Non-Volatile Memory (NVM) solutions and is an ideal partner to make this a very successful high margin business for both companies. Their strong focus on differentiated specialty process technologies will enable us to fully realize the remarkable promise of our proprietary technology and to very quickly bring leading-edge commercial chip products to an eager marketplace.”

Crocus has developed a robust, reliable and scalable MRAM process based on its patented technology. It has seen improving yield and performance on its full-functionality 130nm MRAM test vehicle and is ready for the transition to commercial manufacturing.

“We are pleased to take part in Crocus’ success through the productization of its breakthrough MRAM technology,” said Dr. Avi Strum, vice president & general manager, Specialty Business Unit at Tower. “The combination of Crocus’ magnetic know-how with our own proven CMOS expertise will produce a differentiated and superior technology. At Tower, we are convinced of the industry-changing potential of MRAM, and we are partnering with the company best able to capitalize on this potential. We view this as a high volume market with a long life on Tower’s platform.”

MRAM has broad applicability both as standalone and embedded memory. The integration into Tower’s copper 130nm logic process sets the stage for bringing to market leading edge single chip memory products as well as for embedding MRAM into complex SOCs for market segments such as microcontrollers, automotive and communications.

“Although the MRAM market was in its commercial infancy in 2008, Crocus’ TAS MRAM can easily capture a sizable portion of the $700 million NOR (<256Mbit) cellular and networking market by 2011, among others,” claims Alan Niebel, CEO at Web-Feet Research, a leading market research firm specializing in memory and storage. “In addition, embedded MRAM effectively targets the integrated memory components of the SOC and ASIC markets, which together constitute over $10 billion in semiconductor revenues.”

Crocus’ proprietary MRAM technology solves all the known problems encountered in earlier MRAM developments. The company’s technology has demonstrated its stability, reliability, data retention, endurance, and scalability, while exhibiting high speed, low power dissipation, and excellent resistance to external perturbation.