FORM 6-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                          For the month of August 2004

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


                    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 August 22, 2004, the Registrant announced that the class action against
it, its directors and controlling shareholders has been dismissed. A copy of the
press release is attached hereto.

     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: August 22, 2004                                By: s/ Tamar Cohen
                                                     ------------------
                                                     Tamar Cohen
                                                     Corporate Secretary









                          TOWER SEMICONDUCTOR ANNOUNCES
                 THE CLASS ACTION AGAINST IT, ITS DIRECTORS AND
                  CONTROLLING SHAREHOLDERS HAS BEEN DISMISSED


MIGDAL HAEMEK, ISRAEL -- AUGUST 22, 2004 -- Tower Semiconductor Ltd. (NASDAQ:
TSEM; TASE: TSEM) today announced that the class action filed in the United
States District Court for the Southern District of New York on behalf of the
shareholders of Tower Semiconductor Ltd., against Tower and certain of its
directors and shareholders, asserting claims arising under Sections 14(a) and
20(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated
thereunder has been dismissed in its entirety. The Court accepted the motion to
dismiss filed on behalf of the Tower defendants and noted that Tower's status as
a foreign private issuer exempts it, its directors and controlling from
liability under the proxy rules of Section 14(a) of the Securities Exchange Act

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 0.18 micron; it also provides complementary technical services and design
support. In addition to digital CMOS process technology, Tower offers advanced
non-volatile memory solutions, mixed-signal 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-micron and
below process technologies, including foundry-standard technology. When
complete, Fab 2 is expected to offer full production capacity of 33,000 200mm
wafers per month. The Tower Web site is located at www.towersemi.com.

SAFE HARBOR

THIS PRESS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT TO
RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY FROM THOSE PROJECTED OR IMPLIED
BY SUCH FORWARD-LOOKING STATEMENTS. POTENTIAL RISKS AND UNCERTAINTIES INCLUDE,
WITHOUT LIMITATION, RISKS AND UNCERTAINTIES ASSOCIATED WITH: (I) THE COMPLETION
OF THE EQUIPMENT INSTALLATION, TECHNOLOGY TRANSFER AND RAMP-UP OF PRODUCTION IN
FAB 2, (II) HAVING SUFFICIENT FUNDS TO COMPLETE THE FAB 2 PROJECT, (III) THE
CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY AND THE RESULTING PERIODIC
OVERCAPACITY, (IV) OPERATING OUR FACILITIES AT SATISFACTORY UTILIZATION RATES,
(V) OUR ABILITY TO CAPITALIZE ON INCREASES IN DEMAND FOR FOUNDRY SERVICES, (VI)
MEETING THE CONDITIONS TO RECEIVE ISRAELI GOVERNMENT GRANTS AND TAX BENEFITS
APPROVED FOR FAB 2 AND OBTAINING THE APPROVAL OF THE ISRAELI INVESTMENT CENTER
TO EXTEND THE FIVE-YEAR INVESTMENT PERIOD UNDER OUR FAB 2 APPROVED ENTERPRISE
PROGRAM, (VII) ATTRACTING ADDITIONAL CUSTOMERS, (VIII) NOT RECEIVING ORDERS FROM
OUR WAFER PARTNERS AND TECHNOLOGY PROVIDERS, (IX) FAILING TO MAINTAIN AND
DEVELOP OUR TECHNOLOGY PROCESSES AND SERVICES, (X) COMPETING EFFECTIVELY, (XI)
OUR LARGE AMOUNT OF DEBT AND OUR SATISFYING THE COVENANTS SET FORTH IN OUR
AMENDED FACILITY AGREEMENT, AND (XII) ACHIEVING ACCEPTABLE DEVICE YIELDS,
PRODUCT PERFORMANCE AND DELIVERY TIMES. A MORE COMPLETE DISCUSSION OF RISKS AND
UNCERTAINTIES THAT MAY AFFECT THE ACCURACY OF FORWARD-LOOKING STATEMENTS
INCLUDED IN THIS PRESS RELEASE OR WHICH MAY OTHERWISE AFFECT OUR BUSINESS IS
INCLUDED UNDER THE HEADING "RISK FACTORS" IN OUR MOST RECENT ANNUAL REPORT ON
FORM 20-F AND IN OUR FORM F-3, AS AMENDED, AS WERE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND THE ISRAEL SECURITIES AUTHORITY.




                                      # # #

Investor Relations Contact          Corporate Contact
Sheldon Lutch                       Michael Axelrod
IR & Communications                 Tower Semiconductor USA
+1 (212) 268 1816                   +1 (408) 330 6871
sheldon@fusionir.com                pr@towersemi.com