FORM 6-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                     For the month of September 2006, No. 2

                            TOWER SEMICONDUCTOR LTD.
                 (Translation of registrant's name into English)

                          RAMAT GAVRIEL INDUSTRIAL PARK
                    P.O. BOX 619, MIGDAL HAEMEK, ISRAEL 23105
                    (Address of principal executive offices)

     Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.

                         Form 20-F [X]     Form 40-F [_]

     Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


                               Yes [_]     No [X]




     On September 12, 2006, the Registrant announced that Saifun and Tower Sign
Expanded Licensing Agreement attached hereto is a copy of the press release.

     This Form 6-K is being incorporated by reference into all effective
registration statements filed by us under the Securities Act of 1933.




                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                                     TOWER SEMICONDUCTOR LTD.



Date: September 12, 2006                             By: /s/ Nati Somekh Gilboa
                                                     --------------------------
                                                     Nati Somekh Gilboa
                                                     Corporate Secretary




               SAIFUN AND TOWER SIGN EXPANDED LICENSING AGREEMENT

NETANYA AND MIDGAL HAEMEK, ISRAEL, SEPTEMBER 12, 2006 - Saifun Semiconductors
Ltd. (Nasdaq: SFUN) and Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM)
today announced that the two companies have signed a new agreement whereby
Saifun extends the license of the Saifun NROM(R) technology to Tower for the
manufacture of Embedded Flash and Embedded EEPROM products.

Tower is currently offering its customers a wide variety of qualified NROM-based
embedded-Flash modules under the microFLASH(R) brand name. The microFLASH(R)
embedded modules are manufactured on Tower's 0.18 micron process in various
densities and speeds and optimized for integration into various embedded
microcontroller applications, as well as wireless connectivity, smart card and
security applications. Under the terms of the new agreement, Tower may also
offer NROM-based embedded-Flash modules on further advanced process generations.

Commenting on the agreement, Russell Ellwanger, Chief Executive Officer of Tower
said, "Saifun's NROM technology has a proven track record with Tower and other
leading manufacturers in a broad span of process geometries. It enables us to
produce high-density embedded products with a favorable cost/performance ratio.
These and other inherent advantages enable Tower to keep bringing competitive
memory modules to the market while further expanding our position in the NVM
space."

"We are pleased to extend our ten-year relationship with Tower," added Dr. Boaz
Eitan, Chief Executive Officer of Saifun. "Tower was the first licensee of NROM
in 1997, and the first to introduce NROM-based products into the Code Flash
market. Since that time, other manufacturers have licensed our NROM technology
for embedded applications, including global technology leaders such as Sony and
Panasonic. With the embedded-memory market expected to grow substantially in the
coming years, from a $3.3B in 2005 to a projected $6.3B in 2010, Tower's
customers will continue to benefit from the embedded microFLASH(R) modules
offered."

ABOUT SAIFUN SEMICONDUCTORS LTD.

Saifun is a provider of intellectual property (IP) solutions for the
non-volatile memory (NVM) market. The company's innovative Saifun NROM(R)
technology allows semiconductor manufacturers to deliver high performance,
reliable products at a lower cost per megabit, with greater storage capacity,
using a single process for all NVM applications. Saifun licenses its IP to
semiconductor manufacturers who use this technology to develop and manufacture a
variety of stand-alone and embedded NVM products. These include Flash memory for
the telecommunications, consumer electronic, networking and automotive markets.
The companies currently licensing Saifun NROM technology are Infineon
Technologies, Macronix International, Matsushita Electric Industrial,
Semiconductor Manufacturing International Corporation, Sony Corporation,
Spansion, and Tower Semiconductors.




ABOUT TOWER SEMICONDUCTOR LTD.

Tower Semiconductor Ltd. is a pure-play independent wafer foundry established in
1993. The company manufactures integrated circuits with geometries ranging from
1.0 to 0.13 micron; it also provides complementary technical services and design
support. In addition to digital CMOS process technology, Tower offers advanced
embedded non-volatile memory solutions, mixed-signal & RF-CMOS and CMOS
image-sensor technologies. To provide world-class customer service, the company
maintains two manufacturing facilities: Fab 1 has process technologies from 1.0
to 0.35 micron and can produce up to 16,000 150mm wafers per month. Fab 2
features 0.18 and 0.13-micron, standard and specialized process technologies,
and has the current capacity of up to 15,000 200mm wafers per month. Tower's Web
site is located at www.towersemi.com.

SAFE HARBOR STATEMENT

INFORMATION PROVIDED IN THIS PRESS RELEASE MAY CONTAIN STATEMENTS RELATING TO
CURRENT EXPECTATIONS, ESTIMATES, FORECASTS AND PROJECTIONS ABOUT FUTURE EVENTS
THAT ARE "FORWARD-LOOKING STATEMENTS" AS DEFINED IN THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THESE FORWARD-LOOKING STATEMENTS GENERALLY RELATE
TO EACH OF THE COMPANY'S PLANS, OBJECTIVES AND EXPECTATIONS FOR FUTURE
OPERATIONS AND ARE BASED UPON MANAGEMENT'S CURRENT ESTIMATES AND PROJECTIONS OF
FUTURE RESULTS OR TRENDS. ACTUAL FUTURE RESULTS MAY DIFFER MATERIALLY FROM THOSE
PROJECTED AS A RESULT OF CERTAIN RISKS AND UNCERTAINTIES. WE URGE INVESTORS TO
REVIEW IN DETAIL THE RISKS AND UNCERTAINTIES (I) WITH RESPECT TO SAIFUN - IN
SAIFUN'S SECURITIES AND EXCHANGE COMMISSION FILINGS, INCLUDING BUT NOT LIMITED
TO THE "RISK FACTORS" AS DESCRIBED IN SAIFUN'S FORM 20-F FILED ON APRIL 11, 2006
AND FORM F-1 FILED ON MARCH 31, 2006 WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION; AND (II) WITH RESPECT TO TOWER - IN TOWER'S SECURITIES AND EXCHANGE
COMMISSION FILINGS, INCLUDING BUT NOT LIMITED TO THE "RISK FACTORS" AS DESCRIBED
IN TOWER'S FORMS 20-F, F-1, F-3 AND 6-K WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION. THESE FORWARD-LOOKING STATEMENTS ARE MADE ONLY AS OF THE DATE
HEREOF, AND WE UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE THE FORWARD-LOOKING
STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.


SAIFUN SEMICONDUCTORS CONTACT:              SAIFUN INVESTOR RELATIONS CONTACT:
Marsha Shalvi                               Lee Roth/Todd Fromer
Investor Relations                          KCSA Worldwide
Tel: +972-9-892-8450                        212-896-1209/212-896-1215
Email: marshas@saifun.com                   lroth@kcsa.com/tfromer@kcsa.com

TOWER SEMICONDUCTOR PR CONTACT:             TOWER SEMICONDUCTOR IR CONTACT:
MICHAEL AXELROD                             ILANIT VUDINSKY
TEL: +1-408-330-6871                        +972-4-650-6434
EMAIL: pr@towersemi.com                     EMAIL: ilanitvu@towersemi.com