zk1009230.htm
   
Filed Pursuant to Rule 424(b)(2)
       Registration Nos. 333-169491 and 333-163196
Pricing Supplement No. 1
    
(to Prospectus Supplement dated Decembert 15, 2010 and
    
 Prospectus dated September 27, 2010)
    
     

TOWER SEMICONDUCTOR LTD.

6,072,779 Ordinary Shares
 
Pursuant to this prospectus supplement, the accompanying Prospectus Supplement No. 4 and the accompanying base prospectus, we are offering 5,940,014 ordinary shares to YA Global Master SPV Ltd., or YA Global for a total consideration of $8 million, pursuant to an advance made to us by YA Global under our previously announced Standby Equity Purchase Agreement, or SEPA, dated August 11, 2009 as amended to date. This prospectus supplement also covers the issuance of 132,765 shares to YA Global in payment of $187,500 of the commitment fee payable to YA Global under the SEPA.  We expect to issue the shares to YA Global against payment therefor and in satisfaction of the commitment fee on or about December 29, 2010.
 
         In addition to our issuance of ordinary shares to YA Global pursuant to the SEPA, this prospectus supplement, the accompanying Prospectus Supplement No. 1 and the accompanying base prospectus also cover the resale of those shares by YA Global to the public. YA Global may be deemed to be an “underwriter” within the meaning of the Securities Act of 1933, as amended.
 
        Our ordinary shares are quoted on the NASDAQ Global Market and the Tel-Aviv Stock Exchange under the symbol “TSEM.” On December 27, 2010, the last reported sales price of our ordinary shares on the Tel-Aviv Stock Exchange was NIS 492.9 per share. On December 24, 2010 the last reported sale price for our ordinary shares on the NASDAQ Global Market was $1.36 per share.
 
The shares are being issued as part of the commitment by YA Global to purchase from time to time, at our option, our ordinary shares pursuant to the SEPA.  After giving effect to the issuance of the shares and payment therefor as described in this prospectus supplement, a maximum of $27 million is available for future advances under the SEPA.
 
Investing in our securities involves a high degree of risk. See “Risk Factors” referred to and included beginning on page S-2 of the accompanying Prospectus Supplement dated December 15, 2010.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying base prospectus. Any representation to the contrary is a criminal offense.
 
The date of this prospectus supplement is December 27, 2010
 
 
 
 
 
THE OFFERING
 
     
Securities offered
  
6,072,779 ordinary shares of Tower Semiconductor Ltd.
     
Purchaser
  
YA Global Master SPV Ltd., pursuant to the Standby Equity Purchase Agreement dated August 11, 2009, as ameneded to date.
     
Purchase price; other consideration
  
$8,000,000; 187,500 in payment of commitment fees.
     
Settlement date
  
On or about December 29, 2010.
     
Use of proceeds
  
We intend to use the net proceeds from this offering for working capital and other general corporate purposes. See “Use of Proceeds” in the accompanying Prospectus Supplement dated Decemmber 15, 2010.
     
Symbol for Ordinary Shares on Nasdaq Global Market and Tel-Aviv Stock Exchange
  
TSEM
     
Resale
  
This prospectus supplement and the accompanying Prospectus Supplement and the accompanying base prospectus referred to on the also cover the resale of the ordinary shares by YA Global to the public. See “Plan of Distribution” in the accompanying Prospectus Supplement dated Decemmber 15, 2010.


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