SecProbe.io

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Mail Stop 6010

      August 22, 2005

Tower Semiconductor USA
4300 Stevens Creek Blvd., Suite 175
San Jose, CA 95129
As Agent for Service of Tower Semiconductor Ltd.

      Re:	Tower Semiconductor Ltd.
	Registration Statement on Form F-2
      Filed July 27, 2005
	File No. 333-126909
	Form 20-F for the Year Ended
      December 31, 2004
	Forms 6-K
      Filed May 26, 2005 and August 3, 2005
      File No. 0-24790

Dear Sir/Madam:

      We have limited our review of your filing to those issues we
have addressed in our comments.  Where indicated, we think you
should
revise your document in response to these comments.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure.  After reviewing this information, we may raise
additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form F-2

Fee Tale
1. It appears that the rights should be registered and included in
the fee table.  Please revise or advise.
2. We note you are registering $25.5 million in securities to be
issued upon exercise of the rights, yet the cover page of the
prospectus states that you are distributing transferable rights to
purchase up to $50 million of debentures.  Please reconcile.

Prospectus Cover Page
3. We note the fourth paragraph, where you disclose that Israel
Corp., SanDisk Corporation, and Alliance Semiconductor Corporation
have already committed to exercise rights to be issued to them.
We
also note that "certain of our shareholders" have agreed to
transfer
their unexercised rights to Israel Corp.  Provide a thorough legal
analysis of why you believe the simultaneous public and private
offerings and the communications related thereto are consistent
with
Section 5 of the 1933 Act.  We will have further comments.

Questions and Answers About the Rights Offering, page 2
4. Explain the business reasons for structuring this as a rights
offering for convertible debentures in the principal amount of $1
per
share.  If your intent was to reduce the dilution of your existing
shareholders, why are they not given rights to purchase additional
shares?

How will principal and interest be paid, page 2
5. Explain in more detail the last sentence regarding the non-
payment
of accrued interest.
6. Expand to describe the possible postponement of payments under
the
debentures, and supplementally explain why you believe this
provision
is consistent with the requirements of the Trust Indenture Act of
1939.
7. Add a separate Q & A to discuss the current and future
subordination of the debentures and the dollar amount of
indebtedness
outstanding to which they are subordinated.
8. Add a separate Q & A to disclose whether the debentures will be
listed for trading.

Must I convert the debentures I hold into ordinary shares, page 3
9. Please specifically state under this heading that accrued
interest
will not be paid if mandatory conversion of the debentures occurs.
We refer you to your disclosure in the last sentence on page 35.
Why are we engaging in the rights offering, page 3
10. Revise the answer to this question to explain more concisely
why
you are engaging in this offering.  The current disclosure is
confusing.
11. We note your disclosure in the penultimate sentence that you
are
raising the financing required by the credit facility amendment
from
Israel Corp. and SanDisk "through this rights offering in order to
allow other shareholders to participate."  Please explain this in
more detail since your cover page states that Israel and SanDisk
are
not receiving securities pursuant to this registered rights
offering.
Discuss supplementally the integration issues that arise with this
transaction, which you appear to have structured as a combined
public/private offering, and why you believe it is consistent with
Section 5 of the 1933 Act, as we noted in our previous comment.
We
may have further comments.

How do you transfer your rights, page 4
12. Explain in more detail the very unusual one-day NASDAQ listing
of
the rights.  Are you aware of other registered offerings that have
done this?

Can you sell or give away your rights, page 5
13. Because there are no dates filled in, we are unable to
determine
the order in which these events will take place.  For example,
when
will the trading day be relative to the expiration date?  Revise
the
disclosure here to clearly explain the sequence of this offering.
Also tell us how a new investor who purchases the unexercised
rights
on NASDAQ will have enough information to decide whether or not to
exercise the right.  We may have further comments when the
disclosure
is revised.

What are the federal income tax and Israeli income tax
consequences,
page 5
14. You state under this heading that rights received under
employee
share option plans "may be" taxable.  However, on page 6, you
disclose that the transfer and exercise of rights granted under
the
employee option plans "are" taxable.  Please clarify your
disclosure.
15. Please note you will need to file an opinion of counsel which
describes the material federal income tax consequences as an
exhibit.
You should also revise the disclosure here and elsewhere in the
prospectus to clearly describe counsel`s opinion regarding the
material federal income tax consequences.

What happens if you choose not to exercise your rights, page 5
16. Expand to disclose the extent to which current shareholders
will
be diluted, assuming all rights are exercised and all debentures
are
converted.  Also disclose the percentage of shares SanDisk,
Alliance,
and Israel Corp. will hold if they convert their debentures and
whether they have expressed their intent to do so.

Risks Affecting Our Business, page 8

If the amendment to our credit facility . . ., page 8
17. We note the reference to "other things" for which the
amendment
provides.  Please describe all material terms of the amendment.
Describe the "certain financial ratios and covenants" to which you
refer and any material risk to your satisfying the amended terms
with
regard to them.  Revise the narrative to explain any known
impediments to the consummation of the amendment to your credit
facility agreement.  The revised narrative should also state the
date
by which the amendment must be consummated to avoid the threat to
your operations.  Include a reference to more detailed disclosure
of
the amended credit facility elsewhere in the prospectus.

If we do not meet conditions to receive the Israeli government
grants
. . ., page 9
18. Explain the specific reasons for which you do not expect to
satisfy the requirement that you complete your Fab 2 investment.
Give
the time frame by which you will learn whether the Investment
Center
will approve your new expansion program.  Describe concretely the
"adverse effect on [your] operations" as referenced in the last
sentence.  Describe any external political, economic or other
considerations that may impact your receipt of grants and benefits
from the Israeli government.

If we are considered to be a passive foreign investment company .
.
., page 22
19. State whether you have been found to be a PFIC in past years
or
other reasons why you believe there to be a material risk that you
may be found to be a PFIC presently or in the future.

Effect of This Rights Offering on Our Convertible Securities, page
25
20. Please disclose the approximate number of shares that will be
sold to employees assuming all rights offered pursuant to the
Employee Share Option Plans are exercised and all debentures
issued
in the rights offering are converted into your ordinary shares.
21. Please explain in greater detail the calculation of the
"economic
benefit" component of your employee share options, convertible
debentures and Series 1 Options and how the share conversion will
be
adjusted to reflect this benefit.  We refer you to your disclosure
in
the last paragraph on page 25 and the first full paragraph on page
26.

The Rights Offering, page 26

No Recommendation to Rights Holders, page 27
22. Please disclose the aggregate percentage of your outstanding
common stock currently held by your officers and directors, and
quantify the approximate number of shares that will be sold to
these
parties assuming all rights are exercised and all debentures
issued
in the rights offering are converted into your ordinary shares.
Please include options granted to your executive officers and
directors that entitle their holders to receive rights in this
offering.

Our Decision Will Be Binding on You, page 28
23. We note your disclosure that you, in your sole discretion, may
waive any defect or irregularity regarding the exercise of the
rights.  Please disclose the factors you may consider in
determining
whether to waive any such defect or irregularity.

Method of Exercise of Rights for Record Holders, page 28
24. State, if true, that the rights offering will not be extended
beyond the subscription period.

Material Income Tax Considerations, page 43

United States Tax Considerations, page 46
25. Please file a tax opinion as an exhibit, and revise the
disclosure to describe counsel`s opinion regarding the material
federal income tax consequences.  Counsel should clearly opine on
each material issue.  If counsel is unable to opine on any issue,
so
state, and explain why counsel cannot opine.  We may have further
comments after the disclosure is revised.
26. Remove the "No Reliance" bold paragraph on page 47, or explain
why you believe it is appropriate to include it.  What is the
second
sentence supposed to mean?
27. We note your statement at the bottom of page 47 that you
expect
the fair market value of the rights to be zero.  How is this
consistent with your intent to list unexercised rights on NASDAQ
to
give holders a chance to sell them?

Experts, page 55
28. We note your reference to the limited procedures performed in
accordance with those prescribed by the Institute of Certified
Public
Accountants in Israel by Brightman Almagor & Co. for the interim
financial statements for the periods ended March 31, 2004 and
2005.
In Exhibit 15.1, the letter from Brightman Almagor & Co. also
refers
to these periods.  We note that you incorporate by reference your
Form 6-K filed on May 26, 2005.  That Form 6-K includes the review
report of Brightman Almagor & Co. dated May 26, 2005 for the March
31, 2005 financial statements, but not the review report dated
April
28, 2004 on the March 31, 2004 financial statements.  If you
continue
to include these references, please also include, or incorporate
by
reference, each of the review reports.  Please also refer to our
comment below with respect to your presentation of Israeli GAAS
review reports.

Where You Can Find More Information; Incorporation of Information
by
Reference, page 56
29. Please correct the reference to a Form 6-K filed on July 24,
2005
at the top of page 57.

Exhibits
30. Note that when you file all exhibits relating to this
transaction, we may have further comments after we have had a
chance
to review them.

Form 20-F for the Year Ended December 31, 2004

Item 15. Controls and Procedures, page 81
31. Under Item 15(a) of Form 20-F, your officers should disclose
their conclusions regarding the effectiveness of your disclosure
controls and procedures (as defined in Rules 13a-15(e) or 15d-
15(e))
as of the end of the period covered by the report.  Please give us
your conclusion as of that date and based upon the applicable
definition and provide the conclusion required by Item 15(a) of
Form
20-F in future filings.
32. Please provide, and include in future filings, the disclosures
required by Item 15(d) of Form 20-F.  Please note that the
disclosure
relates to any changes in your internal control over financial
reporting identified in connection with the evaluation required by
paragraph (d) of Rule 13a-15 or 15d-15 that occurred during the
period covered by the annual report that has materially affected,
or
is reasonably likely to materially affect, your internal control
over
financial reporting.  Your current disclosure appears to only
address
significant changes in disclosure controls that could
significantly
affect those controls subsequent to the date of your evaluation.

Consolidated Financial Statements, page F-1

Report of Independent Registered Public Accounting Firm, page F-1
33. Please tell us why the audit opinion refers only to a U.S.
GAAP
reconciliation with respect to your financial position and results
of
operations for the period presented and does not include your
statements of cash flows.  Please explain how you complied with
Item
17(c)(2)(iii) of Form 20-F.
34. Please tell us about any evaluations and conclusions with
respect
to your ability to continue as a going concern as of December 31,
2004.  Please see AU Section 341.

Note 12. Commitments and Contingencies, page F-18

A. Commitments and Contingencies Relating to FAB 2, page F-18

(6) Facility Agreement, page F-22
35. Please tell us how you will account for the indemnification
agreement with TIC discussed in the last paragraph on page F-24
under
U.S. GAAP.  Please cite the accounting literature upon which you
will
rely and explain how you will apply that literature to your
situation.

Forms 6-K filed May 26, 2005 and August 3, 2005
36. We note that you have incorporated by reference into all
effective registration statements your financial statements for
the
periods ended March 31, and June 30, 2005.  In addition, the
financial statements for the period ended March 31, 2005 were
incorporated by reference into your Form F-2 filed on July 27,
2005.
It appears that these statements were included under Item 8.A.5 of
Form 20-F.  Please update your Form F-2 to include the June 30,
2005
financial statements required by Item 8.5.A of Form 20-F.  Please
also amend to include in the registration statements, or
incorporate
by reference, an MD&A discussion of the most recent comparative
interim periods in your registration statements.
37. Under Item 8.A.5 of Form 20-F, you are encouraged, but not
required, to have your interim financial statements reviewed by an
independent auditor in accordance with the standards of the PCAOB
(U.S.).  We note that you include review reports of Brightman
Almagor
& Co. in accordance with standards prescribed by the Institute of
Certified Public Accountants in Israel for interim financial
statements.  Since the review was not conducted in accordance with
the standards of the PCAOB (U.S.), you should remove the
references
to those review reports in your Form F-2 and not include or
incorporate by reference those review reports from your Forms 6-K.
Alternatively, if you believe that inclusion of those review
reports
is required or necessary, then we believe that you should include
cautionary language where you refer to those reports and
immediately
prior to the reports to inform investors that the reviews were not
conducted in accordance with the standards of the PCAOB (U.S.) and
describe the differences between a review conducted in accordance
with the standards of the PCAOB (U.S.) and the standards of the
Institute of Certified Public Accountants in Israel.

Form 6-K Filed August 3, 2005
38. In future filings please provide all of the disclosures
required
by Item 10(e) of Regulation S-K with respect to each non-GAAP
financial measure you disclose.

*     *     *
      As appropriate, please ame