SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                            Tower Semiconductor Ltd.
             (Exact Name of Registrant as Specified in Its Charter)

                                     Israel
         (State or Other Jurisdiction of Incorporation or Organization)

                                 Not Applicable
                      (I.R.S. Employer Identification No.)

                          Ramat Gavriel Industrial Park
                           Migdal Haemek, Israel 23105
                    (Address of Principal Executive Offices)

                         Employee Share Option Plan 2004
                              (Full Title of Plan)

                             Tower Semiconductor USA
                       4300 Stevens Creek Blvd., Suite 175
                           San Jose, California 95129
                                Tel: 408-551-6500
                             Facsimile: 408-551-6509
            (Name, address and telephone number of agent for service)


                        Copies of all Correspondence to:

     DAVID H. SCHAPIRO, ESQ.                         SHELDON KRAUSE, ESQ.
        Yigal Arnon & Co.                     Ehrenreich Eilenberg & Krause LLP
        1 Azrieli Center                              11 East 44th Street
     Tel Aviv, 67021 Israel                           New York, NY 10017
       Tel: 972-3-608-7856                            Tel: 212-986-9700


<TABLE>
<CAPTION>
                                 CALCULATION OF REGISTRATION FEE
-------------------------------- --------------------- ------------- ---------------------- ----------------
Title  of   Securities   to  be  Amount to be          Proposed      Proposed  Maximum      Amount of
Registered                       Registered            Maximum       Aggregate Offering     Registration
--------------------------       ----------------      Offering      Price(1)               Fee
                                                       Price Per     ---------------        ------------------
                                                       Share(1)
-------------------------------- --------------------- ------------- ---------------------- ----------------
<S>                              <C>                   <C>           <C>                    <C>
Ordinary    Shares,    par         2,071,578 (2)(3)         $5.29    $10,958,648            $1388.46
value  NIS 1.00 per  share
("Ordinary        Shares")
(relating to 2004 Plan)
-------------------------------- --------------------- ------------- ---------------------- ----------------
</TABLE>

                                       1
<PAGE>


(1)   Calculated  solely for the purpose of  determining  the  registration  fee
      based upon the assumed offering prices of the shares  determined  pursuant
      to Rule 457(h) under the Securities  Act of 1933,  based upon the weighted
      average per share exercise price of the options assumed by the Registrant.
      With respect to 323,500  shares  purchasable  upon exercise of outstanding
      options granted to date under the Registrant's  Employee Share Option Plan
      2004,  the  Proposed  Maximum  Offering  Price  Per  Share is $ 6.35,  the
      weighted average exercise price per share of such options. With respect to
      the shares that may be issued  pursuant to options which may be granted in
      the future pursuant to such Plan, the Proposed  Maximum Offering Price Per
      Share is $5.09,  which  represents  the  average of the high and low sales
      prices of the Ordinary Shares as quoted through the Nasdaq National Market
      on July 20, 2004.

(2)   Represents  shares that may be issued  pursuant to options which have been
      or may be granted pursuant to the Registrant's  Employee Share Option Plan
      2004.

(3)   This  Registration  Statement  also registers an  indeterminate  number of
      Ordinary  Shares which may become issuable  pursuant to the  anti-dilution
      provisions of the plans and options to which this  Registration  Statement
      relates.



                                       2
<PAGE>

                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

                                EXPLANATORY NOTE

      As permitted by the rules of the Securities and Exchange Commission,  this
Registration Statement omits the information specified in Part I of Form S-8.

THE COMPANY HAS APPLIED TO THE  SECURITIES  AUTHORITY OF THE STATE OF ISRAEL FOR
AN  EXEMPTION  FROM THE  OBLIGATION  TO PUBLISH  THIS  PROSPECTUS  IN THE MANNER
REQUIRED PURSUANT TO THE PREVAILING LAWS OF THE STATE OF ISRAEL. NOTHING IN SUCH
EXEMPTION OF THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL, IF RECEIVED, SHALL
BE CONSTRUED AS AUTHENTICATING THE MATTERS CONTAINED IN THIS PROSPECTUS OR AS AN
APPROVAL OF THEIR  RELIABILITY  OR ADEQUACY OR AS AN EXPRESSION OF OPINION AS TO
THE QUALITY OF THE SECURITIES OFFERED HEREBY.


                                       3
<PAGE>


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The following  documents filed with the Securities and Exchange Commission
(the  "Commission")  by the  Registrant,  Tower  Semiconductor  Ltd.,  a company
organized under the laws of the State of Israel (the "Company"), pursuant to the
Securities   Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act"),  are
incorporated by reference in this registration statement:

o     Annual Report on Form 20-F for the year ended  December 31, 2003 (filed on
      March 2, 2004).

o     Report on Form 6-K dated March 2004 (filed on March 16, 2004).

o     Report on Form 6-K dated April 2004 (filed on April 30, 2004).

o     Report on Form 6-K dated June 2004 (filed on June 28, 2004).

o     Report on Form 6-K dated July 2004 No.1 (filed on July 13, 2004).

o     Report on Form 6-K dated July 2004 No.2 (filed on July 22, 2004).

o     The description of the Company's Ordinary Shares which is contained in its
      Registration Statement on Form 8-A declared effective on October 25, 1994.

      All  documents  subsequently  filed by the  Company  pursuant  to Sections
13(a),  13(c),  14 and  15(d) of the  Exchange  Act,  prior to the  filing  of a
post-effective  amendment  which  indicates  that all shares offered hereby have
been sold or which deregisters all then remaining unsold,  shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or  superseded  for purposes of this  registration  statement to the
extent  that a statement  contained  herein or in any other  subsequently  filed
document which also is  incorporated  or deemed to be  incorporated by reference
herein modifies or supersedes such statement.  Any such statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute a part of this registration statement.

ITEM 4. DESCRIPTION OF SECURITIES.

      Not Applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.

      Not Applicable

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

      The Israeli  Companies Law, or the Companies Law,  provides that a company
may include in its articles of association provisions allowing it to:

1.    partially or fully  exempt,  in advance,  an office  holder of the company
      from his  responsibility  for damages  caused by the breach of his duty of
      care to the company;


                                       4
<PAGE>

2.    enter into a contract to insure the  liability of an office  holder of the
      company by reason of acts or  omissions  committed  in his  capacity as an
      office holder of the company with respect to the following:

(a)   the breach of his duty of care to the company or any other person;

(b)   the breach of his duty of loyalty to the company to the extent he acted in
      good faith and had a reasonable  basis to believe that the act or omission
      would not prejudice the interests of the company; and

(c)   monetary liabilities or obligations which may be imposed upon him in favor
      of other persons;

3.    indemnify an office holder of the company for:

(a)   monetary  liabilities  or  obligations  imposed upon him in favor of other
      persons pursuant to a court judgment,  including a compromise  judgment or
      an  arbitrator's  decision  approved  by a  court,  by  reason  of acts or
      omissions  of such  person  in his  capacity  as an  office  holder of the
      company; and

(b)   reasonable  litigation  expenses,   including  attorney's  fees,  actually
      incurred  by such  office  holder or  imposed  upon him by a court,  in an
      action,  suit or  proceeding  brought  against  him by or on behalf of the
      company or by other persons,  or in connection with a criminal action from
      which he was acquitted, or in connection with a criminal action which does
      not require  criminal  intent in which he was  convicted,  in each case by
      reason of acts or  omissions  of such person in his  capacity as an office
      holder.

            The Companies Law provides that a company's  articles of association
      may provide for  indemnification  of an office holder  post-factum and may
      also provide that a company may undertake to indemnify an office holder in
      advance,  provided such  undertaking  is limited to types of  occurrences,
      which,  in the opinion of the company's  board of  directors,  are, at the
      time  of the  undertaking,  foreseeable  and to an  amount  the  board  of
      directors has determined is reasonable in the circumstances.

            The  Companies  Law  provides  that a company may not  indemnify  or
      exempt the  liabilities  of an office  holder or enter  into an  insurance
      contract  which would  provide  coverage  for the  liability  of an office
      holder with respect to the following:

o     a breach of his duty of loyalty, except to the extent described above;

o     a breach  of his  duty of care,  if such  breach  was done  intentionally,
      recklessly  or with  disregard of the  circumstances  of the breach or its
      consequences;

o     an act or omission  done with the intent to  unlawfully  realize  personal
      gain; or

o     a fine or monetary settlement imposed upon him.

            Under  the  Companies  Law,  the term  "office  holder"  includes  a
      director,  managing  director,  general manager,  chief executive officer,
      executive  vice  president,   vice  president,   other  managers  directly
      subordinate  to the managing  director and any other person  fulfilling or
      assuming  any such  position  or  responsibility  without  regard  to such
      person's title.

            The  grant  of  an  exemption,   an   undertaking  to  indemnify  or
      indemnification  of, and procurement of insurance  coverage for, an office
      holder of a company requires,  pursuant to the Companies Law, the approval
      of the company's audit  committee and board of directors,  and, in certain
      circumstances,  including if the office holder is a director, the approval
      of the company's shareholders.


                                       5
<PAGE>

            Our  Articles  of  Association   have  been  amended  to  allow  for
      indemnification of, and procurement of insurance coverage for our officers
      and directors to the maximum extent provided for by the Companies Law.

            We have  entered  into  an  insurance  contract  for  directors  and
      officers  and  have  procured  indemnification  insurance  for our  office
      holders to the extent  permitted by our Articles of  Association.  We have
      approved the  indemnification  of our office holders up to 25% of our then
      current  fully paid up equity (in  addition to any  amounts  paid under an
      insurance   coverage)  with  respect  to  each  case  of   indemnification
      (including all matters connected therewith), by authorizing and empowering
      us to enter into Exemption and Indemnification  Agreements with our office
      holders.  We have never had the  occasion to  indemnify  any of our office
      holders.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.

      Not Applicable

ITEM 8. EXHIBITS.

4.2.           Articles  of  Association  of  the  Registrant  (incorporated  by
               reference  to Exhibit 1.1 to the  Registrant's  Annual  Report on
               Form 20-F for the year ended  December 31, 2000) and Amendment to
               the  Articles  of  Association  of the  Registrant  (approved  by
               shareholders on December 7, 2003) filed herewith

4.3.           Employee Share Option Plan 2004

4.4.           Form of Grant Letter to Israeli Employees

4.5.           Form of Grant Letter to U.S. Employees

5.1.           Opinion of Yigal Arnon & Co.

15.1.          Awareness letter of Brightman Almagor & Co.

23.1.          Consent of Yigal Arnon & Co.  (included  in the opinion  filed as
               Exhibit 5.1)

23.2.          Consent of Brightman Almagor & Co.

24.1.          Power of Attorney (included on signature page)


                                       6
<PAGE>

ITEM 9. UNDERTAKINGS

(a)   The undersigned Registrant hereby undertakes:

(1)   To file,  during any  period in which  offers or sales are being  made,  a
      post-effective amendment to this Registration Statement:

      (i)   To  include  any  prospectus  required  by Section  10(a)(3)  of the
            Securities Act of 1933;

      (ii)  To reflect in the  prospectus  any facts or events arising after the
            effective  date of the  Registration  Statement  (or the most recent
            post-effective  amendment  thereof)  which,  individually  or in the
            aggregate,  represent a fundamental  change in the  information  set
            forth in the Registration Statement;

      (iii) To include  any  material  information  with  respect to the plan of
            distribution not previously disclosed in the Registration  Statement
            or any  material  change  to such  information  in the  Registration
            Statement;   provided,   however,   that  paragraphs  (a)(1)(i)  and
            (a)(1)(ii) do not apply if the  information  required to be included
            in a  post-effective  amendment by those  paragraphs is contained in
            periodic  reports filed by the Registrant  pursuant to Section 13 or
            15(d) of the Securities  Exchange Act of 1934 that are  incorporated
            by reference in the Registration Statement.

(2)   That,  for the purpose of determining  any liability  under the Securities
      Act of 1933,  each such  post-effective  amendment shall be deemed to be a
      new Registration Statement relating to the securities offered therein, and
      the  offering  of such  securities  at that time shall be deemed to be the
      initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective  amendment any of
      the securities  being registered which remain unsold at the termination of
      the offering.

(b)   The  undersigned  Registrant  hereby  undertakes  that,  for  purposes  of
      determining any liability under the Securities Act of 1933, each filing of
      the  Registrant's  annual report pursuant to Section 13(a) or 15(d) of the
      Securities Exchange Act of 1934 (and, where applicable,  each filing of an
      employee  benefit  plan's annual  report  pursuant to Section 15(d) of the
      Securities and Exchange Act of 1934) that is  incorporated by reference in
      the  Registration  Statement  shall  be  deemed  to be a new  Registration
      Statement relating to the securities offered therein,  and the offering of
      such  securities  at that time shall be deemed to be the initial bona fide
      offering thereof.

(c)   Insofar as  indemnification  for liabilities  arising under the Securities
      Act of 1933  may be  permitted  to  directors,  officers  and  controlling
      persons  of the  Registrant  pursuant  to  the  foregoing  provisions,  or
      otherwise,  the  Registrant  has been  advised  that in the opinion of the
      Securities and Exchange Commission such  indemnification is against public
      policy as expressed in the Act and is,  therefore,  unenforceable.  In the
      event that a claim for  indemnification  against such  liabilities  (other
      than the  payment by the  Registrant  of  expenses  incurred  or paid by a
      director,   officer  or  controlling  person  of  the  Registrant  in  the
      successful defense of any action,  suit or proceeding) is asserted by such
      director,  officer or controlling person in connection with the securities
      being  registered,  the  Registrant  will,  unless in the  opinion  of its
      counsel the matter has been settled by controlling precedent,  submit to a
      court   of   appropriate    jurisdiction   the   question   whether   such
      indemnification by it is against public policy as expressed in the Act and
      will be governed by the final adjudication of such issue.


                                       7
<PAGE>


                                   SIGNATURES

      Pursuant to the  requirements  of Securities  Act of 1933,  the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing on Form S-8,  and has duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Migdal Haemek, Israel, on the 21st day of July, 2004.


                                Tower Semiconductor Ltd.

                                By: /s/Carmel Vernia
                                --------------------------------------
                                Carmel Vernia
                                Chairman of the Board of Directors and
                                Chief Executive Officer

      Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by the  following  persons  in their
respective  capacities and on the respective dates indicated.  Each person whose
signature  appears  below  hereby  authorizes  Carmel  Vernia with full power of
substitution,  to execute in the name and on behalf of such person any amendment
or any post-effective  amendment to this Registration  Statement and to file the
same, with exhibits thereto, and other documents in connection therewith, making
such changes in this Registration Statement as the Registrant deems appropriate,
and appoints Carmel Vernia, with full power of substitution, attorney-in-fact to
sign  any  amendment  and any  post-effective  amendment  to  this  Registration
Statement and to file the same,  with exhibits  thereto,  and other documents in
connection therewith.


/s/ Carmel Vernia
-----------------
Carmel Vernia, Chairman and Chief Executive Officer
July 21, 2004

/s/ Amir Harel
--------------
Amir Harel, Vice President and Chief Financial Officer (principal  financial and
accounting officer) July 21, 2004

/s/ Idan Ofer
-------------
Idan Ofer, Director
July 21, 2004


                                       8
<PAGE>



--------------------------
Ehud Hillman, Director
July 21, 2004


/s/ Eli Harari
--------------
Eli Harari, Director
July 21, 2004


--------------------------
Miin Wu, Director
July 21, 2004


/s/ N.D. Reddy
--------------
N.D. Reddy, Director
July 21, 2004


--------------------------
Zehava Simon, Director
July 21, 2004


/s/ Hans Rohrer
---------------
Hans Rohrer, Director
July 21, 2004


AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Tower Semiconductor USA

/s/ Doron Simon
---------------
Doron Simon
President
July 21, 2004


                                       9

<PAGE>


                                  Exhibit Index

Exhibit No.    Exhibit

4.2            Amendment  to the  Articles  of  Association  of  the  Registrant
               (approved by shareholders on December 7, 2003)

4.3            Employee Share Option Plan 2004

4.4            Form of Grant Letter to Israeli Employees

4.5            Form of Grant Letter to U.S. Employees

5.1            Opinion of Yigal Arnon & Co.

15.1           Awareness letter of Brightman Almagor & Co.

23.1           Consent of Yigal Arnon & Co.  (included  in the opinion  filed as
               Exhibit 5.1)

23.2           Consent of Brightman Almagor & Co.

24.1           Power of Attorney (included on signature page)
[{"type": "S-8", "sequence": "1", "filename": "v04684_s8.txt", "secsgml_size_bytes": 21284}]
{"company-data": {"conformed-name": "TOWER SEMICONDUCTOR LTD", "cik": "0000928876", "assigned-sic": "3674", "irs-number": "000000000", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-117565", "film-number": "04925710"}, "business-address": {"street1": "RAMAT GAVRIEL", "street2": "P O BOX 619", "city": "MIGDAL HAEMEK 23105", "state": "L3", "phone": "97246506611"}, "mail-address": {"street1": "RAMAT GAVRIEL", "street2": "P O BOX 619", "city": "MIGDAL HAEMEK 23105", "state": "L3", "zip": "N-A"}}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                            Tower Semiconductor Ltd.
             (Exact Name of Registrant as Specified in Its Charter)

                                     Israel
         (State or Other Jurisdiction of Incorporation or Organization)

                                 Not Applicable
                      (I.R.S. Employer Identification No.)

                          Ramat Gavriel Industrial Park
                           Migdal Haemek, Israel 23105
                    (Address of Principal Executive Offices)

                         Employee Share Option Plan 2004
                              (Full Title of Plan)

                             Tower Semiconductor USA
                       4300 Stevens Creek Blvd., Suite 175
                           San Jose, California 95129
                                Tel: 408-551-6500
                             Facsimile: 408-551-6509
            (Name, address and telephone number of agent for service)

                        Copies of all Correspondence to:

     DAVID H. SCHAPIRO, ESQ.                         SHELDON KRAUSE, ESQ.
        Yigal Arnon & Co.                     Ehrenreich Eilenberg & Krause LLP
        1 Azrieli Center                              11 East 44th Street
     Tel Aviv, 67021 Israel                           New York, NY 10017
       Tel: 972-3-608-7856                            Tel: 212-986-9700
CALCULATION OF REGISTRATION FEE
-------------------------------- --------------------- ------------- ---------------------- ----------------
Title  of   Securities   to  be  Amount to be          Proposed      Proposed  Maximum      Amount of
Registered                       Registered            Maximum       Aggregate Offering     Registration
--------------------------       ----------------      Offering      Price(1)               Fee
                                                       Price Per     ---------------        ------------------
                                                       Share(1)
-------------------------------- --------------------- ------------- ---------------------- ----------------
Ordinary    Shares,    par         2,071,578 (2)(3)         $5.29    $10,958,648            $1388.46
value  NIS 1.00 per  share
("Ordinary        Shares")
(relating to 2004 Plan)
-------------------------------- --------------------- ------------- ---------------------- ----------------
1
(1)   Calculated  solely for the purpose of  determining  the  registration  fee
      based upon the assumed offering prices of the shares  determined  pursuant
      to Rule 457(h) under the Securities  Act of 1933,  based upon the weighted
      average per share exercise price of the options assumed by the Registrant.
      With respect to 323,500  shares  purchasable  upon exercise of outstanding
      options granted to date under the Registrant's  Employee Share Option Plan
      2004,  the  Proposed  Maximum  Offering  Price  Per  Share is $ 6.35,  the
      weighted average exercise price per share of such options. With respect to
      the shares that may be issued  pursuant to options which may be granted in
      the future pursuant to such Plan, the Proposed  Maximum Offering Price Per
      Share is $5.09,  which  represents  the  average of the high and low sales
      prices of the Ordinary Shares as quoted through the Nasdaq National Market
      on July 20, 2004.

(2)   Represents  shares that may be issued  pursuant to options which have been
      or may be granted pursuant to the Registrant's  Employee Share Option Plan
      2004.

(3)   This  Registration  Statement  also registers an  indeterminate  number of
      Ordinary  Shares which may become issuable  pursuant to the  anti-dilution
      provisions of the plans and options to which this  Registration  Statement
      relates.

                                       2
PART I

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

                                EXPLANATORY NOTE

      As permitted by the rules of the Securities and Exchange Commission,  this
Registration Statement omits the information specified in Part I of Form S-8.

THE COMPANY HAS APPLIED TO THE  SECURITIES  AUTHORITY OF THE STATE OF ISRAEL FOR
AN  EXEMPTION  FROM THE  OBLIGATION  TO PUBLISH  THIS  PROSPECTUS  IN THE MANNER
REQUIRED PURSUANT TO THE PREVAILING LAWS OF THE STATE OF ISRAEL. NOTHING IN SUCH
EXEMPTION OF THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL, IF RECEIVED, SHALL
BE CONSTRUED AS AUTHENTICATING THE MATTERS CONTAINED IN THIS PROSPECTUS OR AS AN
APPROVAL OF THEIR  RELIABILITY  OR ADEQUACY OR AS AN EXPRESSION OF OPINION AS TO
THE QUALITY OF THE SECURITIES OFFERED HEREBY.

                                       3
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The following  documents filed with the Securities and Exchange Commission
(the  "Commission")  by the  Registrant,  Tower  Semiconductor  Ltd.,  a company
organized under the laws of the State of Israel (the "Company"), pursuant to the
Securities   Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act"),  are
incorporated by reference in this registration statement:

o     Annual Report on Form 20-F for the year ended  December 31, 2003 (filed on
      March 2, 2004).

o     Report on Form 6-K dated March 2004 (filed on March 16, 2004).

o     Report on Form 6-K dated April 2004 (filed on April 30, 2004).

o     Report on Form 6-K dated June 2004 (filed on June 28, 2004).

o     Report on Form 6-K dated July 2004 No.1 (filed on July 13, 2004).

o     Report on Form 6-K dated July 2004 No.2 (filed on July 22, 2004).

o     The description of the Company's Ordinary Shares which is contained in its
      Registration Statement on Form 8-A declared effective on October 25, 1994.

      All  documents  subsequently  filed by the  Company  pursuant  to Sections
13(a),  13(c),  14 and  15(d) of the  Exchange  Act,  prior to the  filing  of a
post-effective  amendment  which  indicates  that all shares offered hereby have
been sold or which deregisters all then remaining unsold,  shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or  superseded  for purposes of this  registration  statement to the
extent  that a statement  contained  herein or in any other  subsequently  filed
document which also is  incorporated  or deemed to be  incorporated by reference
herein modifies or supersedes such statement.  Any such statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute a part of this registration statement.

ITEM 4. DESCRIPTION OF SECURITIES.

      Not Applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.

      Not Applicable

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

      The Israeli  Companies Law, or the Companies Law,  provides that a company
may include in its articles of association provisions allowing it to:

1.    partially or fully  exempt,  in advance,  an office  holder of the company
      from his  responsibility  for damages  caused by the breach of his duty of
      care to the company;

                                       4
2.    enter into a contract to insure the  liability of an office  holder of the
      company by reason of acts or  omissions  committed  in his  capacity as an
      office holder of the company with respect to the following:

(a)   the breach of his duty of care to the company or any other person;

(b)   the breach of his duty of loyalty to the company to the extent he acted in
      good faith and had a reasonable  basis to believe that the act or omission
      would not prejudice the interests of the company; and

(c)   monetary liabilities or obligations which may be imposed upon him in favor
      of other persons;

3.    indemnify an office holder of the company for:

(a)   monetary  liabilities  or  obligations  imposed upon him in favor of other
      persons pursuant to a court judgment,  including a compromise  judgment or
      an  arbitrator's  decision  approved  by a  court,  by  reason  of acts or
      omissions  of such  person  in his  capacity  as an  office  holder of the
      company; and

(b)   reasonable  litigation  expenses,   including  attorney's  fees,  actually
      incurred  by such  office  holder or  imposed  upon him by a court,  in an
      action,  suit or  proceeding  brought  against  him by or on behalf of the
      company or by other persons,  or in connection with a criminal action from
      which he was acquitted, or in connection with a criminal action which does
      not require  criminal  intent in which he was  convicted,  in each case by
      reason of acts or  omissions  of such person in his  capacity as an office
      holder.

            The Companies Law provides that a company's  articles of association
      may provide for  indemnification  of an office holder  post-factum and may
      also provide that a company may undertake to indemnify an office holder in
      advance,  provided such  undertaking  is limited to types of  occurrences,
      which,  in the opinion of the company's  board of  directors,  are, at the
      time  of the  undertaking,  foreseeable  and to an  amount  the  board  of
      directors has determined is reasonable in the circumstances.

            The  Companies  Law  provides  that a company may not  indemnify  or
      exempt the  liabilities  of an office  holder or enter  into an  insurance
      contract  which would  provide  coverage  for the  liability  of an office
      holder with respect to the following:

o     a breach of his duty of loyalty, except to the extent described above;

o     a breach  of his  duty of care,  if such  breach  was done  intentionally,
      recklessly  or with  disregard of the  circumstances  of the breach or its
      consequences;

o     an act or omission  done with the intent to  unlawfully  realize  personal
      gain; or

o     a fine or monetary settlement imposed upon him.

            Under  the  Companies  Law,  the term  "office  holder"  includes  a
      director,  managing  director,  general manager,  chief executive officer,
      executive  vice  president,   vice  president,   other  managers  directly
      subordinate  to the managing  director and any other person  fulfilling or
      assuming  any such  position  or  responsibility  without  regard  to such
      person's title.

            The  grant  of  an  exemption,   an   undertaking  to  indemnify  or
      indemnification  of, and procurement of insurance  coverage for, an office
      holder of a company requires,  pursuant to the Companies Law, the approval
      of the company's audit  committee and board of directors,  and, in certain
      circumstances,  including if the office holder is a director, the approval
      of the company's shareholders.

                                       5
Our  Articles  of  Association   have  been  amended  to  allow  for
      indemnification of, and procurement of insurance coverage for our officers
      and directors to the maximum extent provided for by the Companies Law.

            We have  entered  into  an  insurance  contract  for  directors  and
      officers  and  have  procured  indemnification  insurance  for our  office
      holders to the extent  permitted by our Articles of  Association.  We have
      approved the  indemnification  of our office holders up to 25% of our then
      current  fully paid up equity (in  addition to any  amounts  paid under an
      insurance   coverage)  with  respect  to  each  case  of   indemnification
      (including all matters connected therewith), by authorizing and empowering
      us to enter into Exemption and Indemnification  Agreements with our office
      holders.  We have never had the  occasion to  indemnify  any of our office
      holders.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.

      Not Applicable

ITEM 8. EXHIBITS.

4.2.           Articles  of  Association  of  the  Registrant  (incorporated  by
               reference  to Exhibit 1.1 to the  Registrant's  Annual  Report on
               Form 20-F for the year ended  December 31, 2000) and Amendment to
               the  Articles  of  Association  of the  Registrant  (approved  by
               shareholders on December 7, 2003) filed herewith

4.3.           Employee Share Option Plan 2004

4.4.           Form of Grant Letter to Israeli Employees

4.5.           Form of Grant Letter to U.S. Employees

5.1.           Opinion of Yigal Arnon & Co.

15.1.          Awareness letter of Brightman Almagor & Co.

23.1.          Consent of Yigal Arnon & Co.  (included  in the opinion  filed as
               Exhibit 5.1)

23.2.          Consent of Brightman Almagor & Co.

24.1.          Power of Attorney (included on signature page)

                                       6
ITEM 9. UNDERTAKINGS

(a)   The undersigned Registrant hereby undertakes:

(1)   To file,  during any  period in which  offers or sales are being  made,  a
      post-effective amendment to this Registration Statement:

      (i)   To  include  any  prospectus  required  by Section  10(a)(3)  of the
            Securities Act of 1933;

      (ii)  To reflect in the  prospectus  any facts or events arising after the
            effective  date of the  Registration  Statement  (or the most recent
            post-effective  amendment  thereof)  which,  individually  or in the
            aggregate,  represent a fundamental  change in the  information  set
            forth in the Registration Statement;

      (iii) To include  any  material  information  with  respect to the plan of
            distribution not previously disclosed in the Registration  Statement
            or any  material  change  to such  information  in the  Registration
            Statement;   provided,   however,   that  paragraphs  (a)(1)(i)  and
            (a)(1)(ii) do not apply if the  information  required to be included
            in a  post-effective  amendment by those  paragraphs is contained in
            periodic  reports filed by the Registrant  pursuant to Section 13 or
            15(d) of the Securities  Exchange Act of 1934 that are  incorporated
            by reference in the Registration Statement.

(2)   That,  for the purpose of determining  any liability  under the Securities
      Act of 1933,  each such  post-effective  amendment shall be deemed to be a
      new Registration Statement relating to the securities offered therein, and
      the  offering  of such  securities  at that time shall be deemed to be the
      initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective  amendment any of
      the securities  being registered which remain unsold at the termination of
      the offering.

(b)   The  undersigned  Registrant  hereby  undertakes  that,  for  purposes  of
      determining any liability under the Securities Act of 1933, each filing of
      the  Registrant's  annual report pursuant to Section 13(a) or 15(d) of the
      Securities Exchange Act of 1934 (and, where applicable,  each filing of an
      employee  benefit  plan's annual  report  pursuant to Section 15(d) of the
      Securities and Exchange Act of 1934) that is  incorporated by reference in
      the  Registration  Statement  shall  be  deemed  to be a new  Registration
      Statement relating to the securities offered therein,  and the offering of
      such  securities  at that time shall be deemed to be the initial bona fide
      offering thereof.

(c)   Insofar as  indemnification  for liabilities  arising under the Securities
      Act of 1933  may be  permitted  to  directors,  officers  and  controlling
      persons  of the  Registrant  pursuant  to  the  foregoing  provisions,  or
      otherwise,  the  Registrant  has been  advised  that in the opinion of the
      Securities and Exchange Commission such  indemnification is against public
      policy as expressed in the Act and is,  therefore,  unenforceable.  In the
      event that a claim for  indemnification  against such  liabilities  (other
      than the  payment by the  Registrant  of  expenses  incurred  or paid by a
      director,   officer  or  controlling  person  of  the  Registrant  in  the
      successful defense of any action,  suit or proceeding) is asserted by such
      director,  officer or controlling person in connection with the securities
      being  registered,  the  Registrant  will,  unless in the  opinion  of its
      counsel the matter has been settled by controlling precedent,  submit to a
      court   of   appropriate    jurisdiction   the   question   whether   such
      indemnification by it is against public policy as expressed in the Act and
      will be governed by the final adjudication of such issue.

                                       7
SIGNATURES

      Pursuant to the  requirements  of Securities  Act of 1933,  the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing on Form S-8,  and has duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Migdal Haemek, Israel, on the 21st day of July, 2004.

                                Tower Semiconductor Ltd.

                                By: /s/Carmel Vernia
                                --------------------------------------
                                Carmel Vernia
                                Chairman of the Board of Directors and
                                Chief Executive Officer

      Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by the  following  persons  in their
respective  capacities and on the respective dates indicated.  Each person whose
signature  appears  below  hereby  authorizes  Carmel  Vernia with full power of
substitution,  to execute in the name and on behalf of such person any amendment
or any post-effective  amendment to this Registration  Statement and to file the
same, with exhibits thereto, and other documents in connection therewith, making
such changes in this Registration Statement as the Registrant deems appropriate,
and appoints Carmel Vernia, with full power of substitution, attorney-in-fact to
sign  any  amendment  and any  post-effective  amendment  to  this  Registration
Statement and to file the same,  with exhibits  thereto,  and other documents in
connection therewith.

/s/ Carmel Vernia
-----------------
Carmel Vernia, Chairman and Chief Executive Officer
July 21, 2004

/s/ Amir Harel
--------------
Amir Harel, Vice President and Chief Financial Officer (principal  financial and
accounting officer) July 21, 2004

/s/ Idan Ofer
-------------
Idan Ofer, Director
July 21, 2004

                                       8
--------------------------
Ehud Hillman, Director
July 21, 2004

/s/ Eli Harari
--------------
Eli Harari, Director
July 21, 2004

--------------------------
Miin Wu, Director
July 21, 2004

/s/ N.D. Reddy
--------------
N.D. Reddy, Director
July 21, 2004

--------------------------
Zehava Simon, Director
July 21, 2004

/s/ Hans Rohrer
---------------
Hans Rohrer, Director
July 21, 2004

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Tower Semiconductor USA

/s/ Doron Simon
---------------
Doron Simon
President
July 21, 2004

                                       9
Exhibit Index

Exhibit No.    Exhibit

4.2            Amendment  to the  Articles  of  Association  of  the  Registrant
               (approved by shareholders on December 7, 2003)

4.3            Employee Share Option Plan 2004

4.4            Form of Grant Letter to Israeli Employees

4.5            Form of Grant Letter to U.S. Employees

5.1            Opinion of Yigal Arnon & Co.

15.1           Awareness letter of Brightman Almagor & Co.

23.1           Consent of Yigal Arnon & Co.  (included  in the opinion  filed as
               Exhibit 5.1)

23.2           Consent of Brightman Almagor & Co.

24.1           Power of Attorney (included on signature page)