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 2003/1

                              (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: 972-3-608-7855                            Tel: 212-986-9700


                         CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
<S>                              <C>                   <C>           <C>                    <C>
-------------------------------- --------------------- ------------- ---------------------- ----------------
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               2,780,420 (2)(3)         $3.965   $ 11,025,217           $891.94
value NIS 1.00 per share
("Ordinary Shares")
-------------------------------- --------------------- ------------- ---------------------- ----------------
</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 offering price per share of the options granted
         and available for grant under Registrant's Employee Share Option Plan
         2003/1. With respect to the 1,043,000 shares purchasable upon exercise
         of outstanding options granted to date under such Plan , the Proposed
         Maximum Offering Price Per Share is $2.983, the exercise price per
         share of such options. With respect to the 1,0737,420 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
         $4.555, which represents the average of the high and low sales prices
         of the Ordinary Shares as quoted through the Nasdaq National Market on
         August 5, 2003.

(2)      Represents shares that may be issued pursuant to which may be granted
         pursuant to the Registrant's Employee Share Option Plan 2003/1.

(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 RECEIVED FROM THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL AN
EXEMPTION PURSUANT TO THE RELEVANT PREVAILING LAWS OF THE STATE OF ISRAEL, WITH
RESPECT TO OFFERING OF THE SECURITIES DESCRIBED IN THIS PROSPECTUS TO THE
EMPLOYEES OF THE COMPANY.




                                       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, 2002 (filed
         on April 14, 2003).

o        Report on Form 6-K dated December 2002 (filed on January 7, 2003).

o        Report on Form 6-K dated February 2003 (filed on February 25, 2003).

o        Report on Form 6-K dated March 2003 (filed on March 4, 2003).

o        Report on Form 6-K dated March 2003 No. 2 (filed on March 11, 2003).

o        Report on Form 6-K dated April 2003 (filed on May 2, 2003).

o        Report on Form 6-K dated May 2003 (filed on May 6, 2003).

o        Report on Form 6-K dated May 2003 No. 2 (filed on May 22, 2003).

o        Report on Form 6-K dated July 2003 (filed on July 23, 2003).

o        Report on Form 6-K dated August 2003 (filed on August 12, 2003).

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.

                                       4
<PAGE>

         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;

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 fiduciary duty 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 fiduciary duty, 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.


                                       5
<PAGE>

         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.

         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


<TABLE>
<CAPTION>

ITEM 8. EXHIBITS.

<S>                    <C>
4.1.............       Memorandum of the Registrant (incorporated by reference to exhibit
                       3.1 to the Registrant's Registration Statement on Form S-1,
                       33-83126)
4.2.............       Articles of Association of the Registrant (incorporated by
                       reference to exhibit 1.1 to the Registrant's Report on Form 20-F
                       for the year ended December 31, 2000)
4.3.............       Employee Share Option Plan 2003/1 (with form of grant letter to
                       Israeli employees)
4.4.............       Form of Grant Letter to U.S. Employees
5.1.............       Opinion of Yigal Arnon & 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)
</TABLE>

                                       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

                                       7
<PAGE>

         (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.

                                       8
<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 ___th day of August, 2003.



                                Tower Semiconductor Ltd.



                                By: /S/CARMEL VERNIA
                                Carmel Vernia
                                Chairman of the Board of Directors and

                                Acting 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 Director and Acting Chief Executive Officer
August___, 2003

/S/ AMIR HAREL
--------------------------
Amir Harel, Vice President and Chief Financial Officer (principal financial and
accounting officer)
August___, 2003

/S/ IDAN OFFER
--------------------------
Idan Offer, Director
August ___, 2003


                                       9
<PAGE>

/S/ EHUD HILLMAN
--------------------------
Ehud Hillman, Director
August ___, 2003

/S/ ELI HARARI
--------------------------
Eli Harari, Director
August ___, 2003

/S/ MIIN WU
--------------------------
Miin Wu, Director
August ___, 2003

/S/ N.D. REDDY
--------------------------
N.D. Reddy, Director
August ___, 2003

/S/ ZEHAVA SIMON
--------------------------
Zehava Simon, Director
August___, 2003

/S/ HANS ROHRER
--------------------------
Hans Rohrer, Director
August_____, 2003

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Tower Semiconductor USA
By: /S/ HAROLD BLOMQUIST
----------------------------------------
Harold Blomquist
Chief Executive Officer


                                       10
<PAGE>







                                                    EXHIBIT INDEX

<TABLE>
<CAPTION>

<S>                      <C>                                                               <C>
Exhibit No.              Exhibit                                                           Sequentially
                                                                                           Numbered Page
4.1                      Memorandum of the Registrant (incorporated by
                         reference to exhibit 3.1 to the Registrant's
                         Registration Statement on Form S-1, 33-83126)

4.2                      Articles of Association of the Registrant
                         (incorporated by reference to exhibit 1.1 to
                         the Registrant's Report on Form 20-F for the
                         year ended December 31, 2000)

4.3                      Employee Share Option Plan 2003/1 (with form
                         of grant letter to Israeli employees)

4.4                      Form of Grant Letter to U.S. Employees

5.1                      Opinion of Yigal Arnon & 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)

</TABLE>
[{"type": "S-8", "sequence": "1", "filename": "tower_s8.txt", "secsgml_size_bytes": 22044}]
{"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": "333-107943", "film-number": "03842176"}, "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 2003/1

                              (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: 972-3-608-7855                            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               2,780,420 (2)(3)         $3.965   $ 11,025,217           $891.94
value NIS 1.00 per share
("Ordinary Shares")
-------------------------------- --------------------- ------------- ---------------------- ----------------
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 offering price per share of the options granted
         and available for grant under Registrant's Employee Share Option Plan
         2003/1. With respect to the 1,043,000 shares purchasable upon exercise
         of outstanding options granted to date under such Plan , the Proposed
         Maximum Offering Price Per Share is $2.983, the exercise price per
         share of such options. With respect to the 1,0737,420 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
         $4.555, which represents the average of the high and low sales prices
         of the Ordinary Shares as quoted through the Nasdaq National Market on
         August 5, 2003.

(2)      Represents shares that may be issued pursuant to which may be granted
         pursuant to the Registrant's Employee Share Option Plan 2003/1.

(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 RECEIVED FROM THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL AN
EXEMPTION PURSUANT TO THE RELEVANT PREVAILING LAWS OF THE STATE OF ISRAEL, WITH
RESPECT TO OFFERING OF THE SECURITIES DESCRIBED IN THIS PROSPECTUS TO THE
EMPLOYEES OF THE COMPANY.

                                       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, 2002 (filed
         on April 14, 2003).

o        Report on Form 6-K dated December 2002 (filed on January 7, 2003).

o        Report on Form 6-K dated February 2003 (filed on February 25, 2003).

o        Report on Form 6-K dated March 2003 (filed on March 4, 2003).

o        Report on Form 6-K dated March 2003 No. 2 (filed on March 11, 2003).

o        Report on Form 6-K dated April 2003 (filed on May 2, 2003).

o        Report on Form 6-K dated May 2003 (filed on May 6, 2003).

o        Report on Form 6-K dated May 2003 No. 2 (filed on May 22, 2003).

o        Report on Form 6-K dated July 2003 (filed on July 23, 2003).

o        Report on Form 6-K dated August 2003 (filed on August 12, 2003).

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.

                                       4
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;

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 fiduciary duty 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 fiduciary duty, 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.

                                       5
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.

         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.
4.1.............       Memorandum of the Registrant (incorporated by reference to exhibit
                       3.1 to the Registrant's Registration Statement on Form S-1,
                       33-83126)
4.2.............       Articles of Association of the Registrant (incorporated by
                       reference to exhibit 1.1 to the Registrant's Report on Form 20-F
                       for the year ended December 31, 2000)
4.3.............       Employee Share Option Plan 2003/1 (with form of grant letter to
                       Israeli employees)
4.4.............       Form of Grant Letter to U.S. Employees
5.1.............       Opinion of Yigal Arnon & 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

                                       7
(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.

                                       8
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 ___th day of August, 2003.

                                Tower Semiconductor Ltd.

                                By: /S/CARMEL VERNIA
                                Carmel Vernia
                                Chairman of the Board of Directors and

                                Acting 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 Director and Acting Chief Executive Officer
August___, 2003

/S/ AMIR HAREL
--------------------------
Amir Harel, Vice President and Chief Financial Officer (principal financial and
accounting officer)
August___, 2003

/S/ IDAN OFFER
--------------------------
Idan Offer, Director
August ___, 2003

                                       9
/S/ EHUD HILLMAN
--------------------------
Ehud Hillman, Director
August ___, 2003

/S/ ELI HARARI
--------------------------
Eli Harari, Director
August ___, 2003

/S/ MIIN WU
--------------------------
Miin Wu, Director
August ___, 2003

/S/ N.D. REDDY
--------------------------
N.D. Reddy, Director
August ___, 2003

/S/ ZEHAVA SIMON
--------------------------
Zehava Simon, Director
August___, 2003

/S/ HANS ROHRER
--------------------------
Hans Rohrer, Director
August_____, 2003

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Tower Semiconductor USA
By: /S/ HAROLD BLOMQUIST
----------------------------------------
Harold Blomquist
Chief Executive Officer

                                       10
EXHIBIT INDEX
Exhibit No.              Exhibit                                                           Sequentially
                                                                                           Numbered Page
4.1                      Memorandum of the Registrant (incorporated by
                         reference to exhibit 3.1 to the Registrant's
                         Registration Statement on Form S-1, 33-83126)

4.2                      Articles of Association of the Registrant
                         (incorporated by reference to exhibit 1.1 to
                         the Registrant's Report on Form 20-F for the
                         year ended December 31, 2000)

4.3                      Employee Share Option Plan 2003/1 (with form
                         of grant letter to Israeli employees)

4.4                      Form of Grant Letter to U.S. Employees

5.1                      Opinion of Yigal Arnon & 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)