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Exhibit 4.90

PLEDGE AGREEMENT

THIS
PLEDGE AGREEMENT (as amended, restated, supplemented or otherwise modified from time to
time, this Agreement) dated as of September 25, 2008, is by and among
TOWER SEMICONDUCTOR LTD., a company incorporated under the laws of Israel (company no.
52-004199-7) (the Borrower), BANK HAPOALIM B.M. and BANK LEUMI
LE-ISRAEL B.M., as the Security Banks (as defined below), and BANK HAPOALIM, NEW YORK
BRANCH, on behalf of the Security Banks (as defined below), as Collateral Trustee (in such
capacity, the Collateral Trustee).

W
I T N E S S E T H:

WHEREAS,
the Borrower and the Banks are parties to that certain Restated Facility Agreement
Originally Made On 18 January 2001 dated as of August 24, 2006 by and between the Borrower
and the Banks, as amended by that certain Amendment No. 1 thereto on September 10, 2007
and by that certain Amending Agreement dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the Amending
Agreement) by and between the Borrower and the Banks (as so amended and as the
same may be further amended, restated, supplemented or otherwise modified and in effect,
the Facility Agreement);

WHEREAS,
in accordance with Section 1.5 of that certain Agreement and Plan of Merger dated as of
May 19, 2008 (as amended, restated, supplemented or otherwise modified from time to time,
the Merger Agreement) by and among the Borrower, Armstrong Acquisition
Corp., a Delaware corporation (Acquisition Sub), and Jazz Technologies,
Inc., a Delaware corporation (Jazz), at the Effective Time (as defined
in the Merger Agreement), all of the issued and outstanding stock of Acquisition Sub,
represented by stock certificate no. CS-1 certifying as to ownership by the Borrower of
one hundred (100) shares of the common stock of Acquisition Sub (the Share
Certificate), was converted into 100% of the then issued and outstanding stock
of Jazz; and

WHEREAS,
it is a condition precedent to the effectiveness of the Amending Agreement that the
Borrower execute and deliver this Agreement;

NOW,
THEREFORE, for and in consideration of any loan, advance or other financial accommodation
heretofore or hereafter made to the Borrower under or in connection with the Facility
Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

1.        Definitions.
When used herein, (a) capitalized terms which are not           otherwise defined have
the meanings assigned thereto in the Facility Agreement,           (b) all terms in this
Agreement that are not capitalized shall have the meanings           provided by the UCC
to the extent the same are used or defined therein and (c)           the following terms
have the following meanings (such meanings to be applicable           to both the
singular and plural forms of such terms):

| | Additional
Shares shall have the meaning assigned to such term in Section 2.
| | ------------------------------------------------------------------------------

| | Collateral shall
have the meaning assigned to such term in Section 2.
| | -----------------------------------------------------------------------



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| | Debenture
 means the Debenture between the Borrower and the Security Banks, dated 18 January 2001, as
amended and supplemented and as may be further amended, restated, supplemented or
otherwise modified from time to time.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Initial
Shares shall have the meaning assigned to such term in Section 2.
| | ---------------------------------------------------------------------------

| | Issuer
 means the issuer of any of the Shares (as defined below) constituting all or any part of
the Collateral.
| | ------------------------------------------------------------------------------------------------------------------

| | Lien
means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without limitation,
the interest of a vendor or lessor under any conditional sale, capitalized lease or other
title retention agreement).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Secured
Obligations shall have the meaning assigned to such term in Section 2.
| | --------------------------------------------------------------------------------

| | Security
Banks means Bank Hapoalim B.M. and Bank Leumi le-Israel B.M. in their respective
own capacities or, in the event that there shall be additional Banks, in their capacities
as security trustees on behalf of all the Banks (including Bank Hapoalim B.M. and Bank
Leumi le-Israel B.M.).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Shares shall
have the meaning assigned to such term in Section 2.
| | -------------------------------------------------------------------

| | UCC means
the Uniform Commercial Code as in effect from time to time in the State of New York.
| | ------------------------------------------------------------------------------------------------

2.        Pledge.
As security for the payment and performance of all present and           future
obligations and liabilities (whether actual or contingent, whether owed           jointly
or severally, as principal, guarantor or in any other capacity), of the
          Borrower to the Banks (or any of them), including under those Finance Documents
          (including the Facility Agreement, the Debenture and this Agreement) to which
          the Borrower is and will, from time to time, become a party, whether or not
          evidenced by any note, guaranty or other instrument, whether direct or
indirect,           due or to become due, now existing or hereafter arising
(collectively, the           Secured Obligations), the Borrower hereby
pledges,           hypothecates, charges and mortgages jointly to the Security Banks, for
their           respective benefit and the benefit of the Banks, and grants jointly to
the           Security Banks, for their respective benefit and the benefit of the Banks,
a           continuing lien on and security interest in, all of its right, title and
          interest in all of the following personal property, whether now existing or
          hereafter arising or acquired:

(a)        All
of the shares of stock and other securities described in Schedule I          hereto
(collectively, the Initial Shares), all of the           certificates
and/or instruments representing such Initial Shares, and all cash,           securities,
dividends, rights and other property at any time and from time to           time
received, receivable or otherwise distributed in respect of or in exchange           for
any or all of such Initial Shares;

(b)        All
additional shares of stock of the Issuer (collectively, the           Additional
Shares, and, together with the Initial Shares, the           Shares)
at any time and from time to time acquired by the           Borrower in any manner, all
of the certificates representing such Additional           Shares, and all cash,
securities, dividends, rights and other property at any           time and from time to
time received, receivable or otherwise distributed in           respect of or in exchange
for any or all of such Additional Shares;



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(c)        All
other property hereafter delivered to any of the Security Banks in           substitution
for or in addition to any of the foregoing, all certificates and           instruments
representing or evidencing such property, and all cash, securities,           interest,
dividends, rights and other property at any time and from time to time
          received, receivable or otherwise distributed in respect of or in exchange for
          any or all thereof; and

(d)        All
products and proceeds of all of the foregoing.

All of the foregoing in clauses
(a)  (d) above are herein collectively called the
Collateral.

All
Collateral comprised of certificated Shares shall be delivered to and held by the Security
Banks or by or on behalf of the Collateral Trustee on behalf of the Security Banks
pursuant hereto, shall be in suitable form for transfer by delivery and shall be
accompanied by all necessary instruments of transfer or assignment, duly executed in
blank. Each Security Bank hereby appoints the Collateral Trustee as such Security
Banks agent and bailee to possess, hold in custody and/or control as agent and
bailee all such certificated Shares and related instruments of transfer or assignment. The
Collateral Trustee agrees that it shall act under this Agreement only in accordance with
written instructions signed by both of the Security Banks.

The
Borrower agrees to deliver to the Security Banks (or, in the case of certificated Shares
and related instruments of transfer or assignment (collectively, Certificated
Share Documents), the Collateral Trustee), promptly upon receipt and in due form
for transfer (i.e., endorsed in blank or accompanied by stock or bond powers
executed in blank), any Collateral (other than payments which the Borrower is entitled to
receive and retain pursuant to Section 7) which may at any time or from time to
time be in or come into the possession or control of the Borrower; and prior to the
delivery thereof to the Security Banks or the Collateral Trustee (as applicable), such
Collateral shall be held by the Borrower separate and apart from its other property. The
Collateral Trustee agrees that any and all money and other property paid over to or
received by the Collateral Trustee that does not constitute Certificated Share Documents
shall be delivered by the Collateral Trustee to the Security Banks to be held by the
Security Banks as collateral under the applicable Finance Documents.

3.        Warranties.
The Borrower warrants that: (a) this Agreement constitutes           the legal, valid and
binding obligation of the Borrower, enforceable against the           Borrower in
accordance with its terms; (b) there are no existing options,           convertible
securities, warrants, calls, pledges, transfer restrictions (except
          restrictions imposed by federal and state securities laws), liens, rights of
          first offer, rights of first refusal, antidilution provisions or commitments of
          any character relating to any of the Collateral; (c) the Borrower is (or at the
          time of any future delivery, pledge, assignment or transfer thereof will be)
the           legal, beneficial and equitable owner of the Collateral; (d) all of the
          Collateral is and will be free and clear of (i) any Lien thereon or affecting
          title thereto and (ii) any condition to or restriction on the ability of the
          holder of the Collateral to sell, assign, transfer or otherwise dispose of such
          Collateral or to enforce any provision thereof or of any document related
          thereto, in each case, except for the security interest granted to the Security
          Banks hereunder and for restrictions imposed by federal and state securities
          laws; (e) this Agreement creates a valid Lien in favor of the Security Banks,
          for the benefit of the Banks; (f) (i) the delivery of the Share Certificate and
          the stock power related to the Share Certificate, each of which the Borrower
          warrants was duly and validly executed and delivered to the Security Banks on
          the date hereof, and (ii) the filing of the UCC-1 financing statement attached
          as Schedule III hereto with the Recorder of Deeds of the District of
          Columbia, creates a valid and perfected first priority Lien in favor of the
          Security Banks, for the benefit of the Banks, in the Collateral securing the
          Secured Obligations, and no filings, registrations, recordings or actions of
the           Shares are necessary or appropriate in order to maintain the perfection and
          priority of such Lien, save for maintenance of possession of the Collateral by
          the Security Banks or the Collateral Trustee on behalf of the Security Banks;
          (g) all of the Shares are duly authorized, validly issued, fully paid and
          non-assessable and have been issued in compliance with all applicable
securities           laws; (h) the Collateral represents, on the date hereof, 100% of the
total           shares of capital stock issued and outstanding of the Issuer; (i) the
          information contained in Schedules I and II hereto is true and
          accurate in all respects; (j) the Borrower is duly qualified to do business in
          each jurisdiction where the nature of its business requires such qualification;
          and (k) in accordance with Section 1.5 of the Merger Agreement, the Share
          Certificate represents 100% of the total shares of capital stock issued and
          outstanding of Jazz on the date hereof.



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4.        Continuing
Security Interest; Transfer of Note. This Agreement shall           create a
continuing security interest in the Collateral and shall

(a)        remain
in full force and effect until the Security Banks, for their respective           benefit
and the benefit of the Banks, are satisfied that (i) irrevocable payment           and
discharge in full of all Secured Obligations has been made and (ii) none of           the
Banks is under any commitment, obligation or liability (whether actual or
          continuing) under the Finance Documents,

(b)        be
binding upon the Borrower and its successors, transferees and assigns, and

(c)        inure,
together with the rights and remedies of the Security Banks hereunder, to           the
benefit of the Security Banks and each Bank and their respective successors           and
assigns.

5.        Covenants.
So long as any of the Secured Obligations shall be outstanding           or any
commitment shall exist on the part of any Security Bank or any Bank with
          respect to the creation of any Secured Obligations, the Borrower (a) shall not,
          without the express prior written consent of each Security Bank, sell, lease,
          assign, exchange, pledge or otherwise transfer or dispose of, permit to exist
          any Lien on, or grant any option, warrant or other right to purchase with
          respect to, any of the Collateral, or otherwise diminish or impair any of such
          Security Banks rights in, to or under any of the Collateral; (b) will
          execute and deliver to the Security Banks or the Collateral Trustee (as
          applicable) such stock powers and similar documents relating to the Collateral,
          satisfactory in form and substance to such Security Bank, as any Security Bank
          may request; (c) will furnish any Security Bank or any Bank such information
          concerning the Collateral as such Security Bank or Bank may from time to time
          request, and will permit any Security Bank or any designee of any Security
Bank,           from time to time, at reasonable times and on reasonable notice (or at
any time           without notice at any time that an Event of Default has occurred and
is           continuing), to inspect, audit and make copies of and extracts from all
records           and all other papers in the possession of the Borrower which pertain to
the           Collateral, and will, upon request of any Security Bank at any time when an
          Event of Default has occurred and is continuing, deliver to the Security Banks
          all of such records and papers; (d) if any restrictive legend appears on any
          certificate evidencing any of the Collateral, at the request of any Security
          Bank, will cause such restrictive legend to be promptly removed, unless the
          removal of such legend is prohibited by applicable law, provided that
the           Borrower is not required to register the Shares under United States
securities           laws; (e) shall not (i) change its name, identity or corporate
structure,           (ii) change its chief executive office from the location
thereof listed on Schedule II hereto or (iii) change the jurisdiction of its
          organization from the jurisdiction listed on Schedule II hereto (whether
          by merger or otherwise), unless the Borrower has (1) given twenty (20)
          days prior written notice to each Security Bank of its intention to do
so,           together with information regarding any such new location and such other
          information in connection with such proposed action as any Security Bank may
          reasonably request, and (2) delivered to each Security Bank ten (10) days
          prior to any such change such documents, instruments and financing statements
as           may be required by such Security Bank, all in form and substance
satisfactory to           such Security Bank, and taken all other actions reasonably
requested by each           Security Bank, in each case in order to perfect and maintain
the security           interest granted hereunder; (f) shall maintain at all times a
valid and           perfected first priority Lien in favor of the Security Banks, for the
benefit of           the Banks, in the Collateral securing the Secured Obligations, save
for           maintenance of possession of the Collateral by the Security Banks or by the
          Collateral Trustee on behalf of the Security Banks; and (g) will, within 14
days           after the date hereof, provide to the Security Banks a share certificate
in           substitution for the Share Certificate naming Jazz as the Issuer, which
share           certificate shall be in form and substance satisfactory to the Security
Banks.           The Security Banks shall, promptly after receipt of such share
certificate,           cause the Share Certificate to be surrendered to the Borrower.
Immediately upon           such surrender of the Share Certificate to the Borrower, the
Borrower shall, or           shall cause, the Share Certificate to be immediately
cancelled and be of no           further force and effect.



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6.        Holding
in Name of Security Banks, etc. Each Security Bank may from time           to time
after the occurrence and during the continuance of an Event of Default,           without
notice to the Borrower, take all or any of the following actions: (a)           transfer
all or any part of the Collateral into the name of such Security Bank           or both
Security Banks or any nominee or agent for any Security Bank, with or           without
disclosing that such Collateral is subject to the Lien granted           hereunder, (b)
appoint one or more agents or nominees for the purpose of           retaining physical
possession of the Collateral, (c) notify the parties           obligated on any of the
Collateral to make payment to one or both of the           Security Banks of any amounts
due or to become due thereunder, (d) endorse any           checks, drafts or other
writings in the name of the Borrower to allow collection           of the Collateral, (e)
enforce collection of any of the Collateral by suit or           otherwise, and
surrender, release or exchange all or any part thereof, or           compromise or renew
for any period (whether or not longer than the original           period) any obligations
of any nature of any party with respect thereto and (f)           take control of any
proceeds of the Collateral.

7.        Voting
Rights, Dividends, etc.

(a)        (i)
So long as no Event of Default exists and is continuing, or is created           thereby,
the Borrower shall be entitled to exercise any and all voting or           consensual
rights and powers relating or pertaining to the Collateral or any           part thereof
for any purpose.

(ii)       
          So long as no Event of Default exists and is continuing, or is created thereby,
          the Borrower shall be entitled to receive and retain any and all lawful
          dividends payable in respect of the Collateral which are paid in cash by the
          Issuer.

(b)        All
dividends and distributions in respect of the Collateral or any part thereof
          made in shares of stock or other property or representing any return of
capital,           whether resulting from a subdivision, combination or reclassification
of           Collateral or any part thereof or received in exchange for Collateral or any
          part thereof or as a result of any merger, consolidation, acquisition or other
          exchange of assets to which the Issuer may be a party or otherwise or as a
          result of any exercise of any stock purchase or subscription right, shall be
and           become part of the Collateral hereunder and, if received by the Borrower,
shall           be forthwith delivered to the Security Banks (or, in the case of
Certificated           Share Documents, the Collateral Trustee) in due form for transfer (i.e.,
          endorsed in blank or accompanied by stock or bond powers executed in blank) to
          be held for the purposes of this Agreement.

(c)        The
Security Banks shall execute and deliver, or cause to be executed and
          delivered, to the Borrower all such proxies, powers of attorney, dividend
orders           and other instruments as the Borrower may request for the purpose of
enabling           the Borrower to exercise the rights and powers which it is entitled to
exercise           pursuant to Section 7(a)(i) and to receive the dividends which
it is           authorized to retain pursuant to Section 7(a)(ii).



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(d)        During
the existence of an Event of Default, and so long as the same shall be
          continuing, all rights and powers which the Borrower is entitled to exercise
          pursuant to Section 7(a)(i) shall forthwith cease, and all such rights
          and powers shall thereupon become vested in the Security Banks which shall
have,           during the continuance of such Event of Default, the sole and exclusive
          authority to exercise such rights and powers. During the existence of an Event
          of Default, and so long as the same shall be continuing, all rights of the
          Borrower to receive and retain dividends pursuant to Section 7(a)(ii)          shall
forthwith cease, and all such rights shall thereupon become vested in the
          Security Banks which shall have, during the continuance of such Default or
Event           of Default, the sole and exclusive authority to receive such dividends.
Any and           all money and other property paid over to or received by the Security
Banks           pursuant to this Section 7(d) shall be retained by the Security
Banks as           additional Collateral hereunder and applied in accordance with the
provisions           hereof.

8.        Remedies.
Upon the occurrence and during the continuation of an Event of           Default, each
Security Bank may exercise from time to time any rights and           remedies available
to it under the UCC or otherwise available to it. Without           limiting the
foregoing, whenever an Event of Default shall have occurred and be           continuing,
each Security Bank (a) may, to the fullest extent permitted by           applicable law,
without notice, advertisement, hearing or process of law of any           kind, (i) sell
(or cause or direct to be sold) any or all of the Collateral,           free of all
rights and claims of the Borrower therein and thereto, at any public           or private
sale or brokers board and (ii) bid for and purchase any or all           of the
Collateral at any such public sale and (b) shall have the right, for and           in the
name, place and stead of the Borrower, to execute endorsements,           assignments,
stock powers and other instruments of conveyance or transfer with           respect to
all or any of the Collateral. The Borrower hereby expressly waives,           to the
fullest extent permitted by applicable law, any and all notices,
          advertisements, hearings or process of law in connection with the exercise by
          the Security Banks of any of its rights and remedies during the continuance of
          an Event of Default. Any notification of intended disposition of any of the
          Collateral shall be deemed reasonably and properly given if given at least ten
          (10) days before such disposition. Any proceeds of any of the Collateral may be
          applied by the Security Banks to the payment of expenses in connection with the
          Collateral, including, without limitation, attorneys fees and legal
          expenses, and any balance of such proceeds may be applied by the Security Banks
          toward the payment of such of the Secured Obligations, and in such order of
          application, as the Security Banks may from time to time elect (and, after
          payment in full of all Secured Obligations, any excess shall be delivered to
the           Borrower or as a court of competent jurisdiction shall direct).

Each
Security Bank is hereby authorized to comply with any limitation or restriction in
connection with any sale of Collateral as it may be advised by counsel is necessary in
order to (a) avoid any violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of prospective bidders or
purchasers and/or further restrict such prospective bidders or purchasers to persons or
entities who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Collateral) or (b)
obtain any required approval of the sale or of the purchase by any governmental regulatory
authority or official, and the Borrower agrees that such compliance shall not result in
such sale being considered or deemed not to have been made in a commercially reasonable
manner and that no Security Bank shall be liable or accountable to the Borrower for any
discount allowed by reason of the fact that such Collateral is sold in compliance with any
such limitation or restriction.

9.        Further
Assurances; Power of Attorney.

(a)       
          To perfect the security interest granted by the Borrower to the Security Banks
          in the Collateral hereunder, (i) the Borrower shall make such filings and take
          such measures as may be requested by any Security Bank and (ii) the Borrower
          hereby irrevocably authorizes each Security Bank, at the Borrowers
          expense, at any time and from time to time, to file in any filing office in any
          jurisdiction any UCC financing statement and amendment thereto, and continuation
          statements, in respect of the Borrower in respect of such security interest. The
          Borrower will cause to be done, executed, acknowledged and delivered all such
          further acts, conveyances and assurances as any Security Bank shall require for
          accomplishing the purposes of this Agreement, and which are necessary or
          desirable to continue the perfection and priority of the lien and security
          interest granted under this Agreement. The Borrower agrees for the benefit of
          the Security Banks, at no expense to any Security Bank, to defend the Security
          Banks security interest in and to the Collateral against the claims of any
          other person or entity and to ensure that the Security Banks shall have at all
          times pursuant to this Agreement a first priority perfected lien on and security
          interest in the Collateral, subject to no prior or equal lien whatsoever.



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(b)       
          The Borrower hereby irrevocably appoints each of the Security Banks as its
          lawful attorney-in-fact, with full authority in the place and stead of the
          Borrower and in the name of the Borrower, such Security Bank or otherwise, and
          with full power of substitution in the premises, from time to time in such
          Security Banks discretion, after the occurrence and during the continuance
          of a Default or an Event of Default, to take any action and to execute any
          instruments that such Security Bank may deem necessary or advisable to
          accomplish the purposes of this Agreement.

(c)       
          If the Borrower fails to perform any covenant or agreement contained in this
          Agreement after written request to do so by any Security Bank (provided
          that no such request shall be necessary at any time after the occurrence and
          during the continuance of an Event of Default), any Security Bank may itself
          perform, or cause the performance of, such covenant or agreement and may take
          any other action that it deems necessary and appropriate for the maintenance and
          preservation of the Collateral or the Security Banks security interest
          therein, and the costs, internal charges and out-of-pocket expenses (including
          attorneys fees and out-of-pocket expenses incurred by the Security Banks
          and the Banks (or any of them) in connection therewith shall be payable by the
          Borrower, together with Interest at the rate referred to in clause 18 of the
          Facility Agreement from date on which the payment of such expenses was demanded
          by any Security Bank or by any of the Banks until the date of payment (after, as
          well as before, judgment).

10.        Waivers.
The Borrower, to the greatest extent not prohibited by           applicable law, hereby
(i) agrees that it will not invoke, claim or assert           the benefit of any
rule of law or statute now or hereafter in effect (including,           without
limitation, any right to prior notice or judicial hearing in connection           with
any Security Banks or the Collateral Trustees possession,           custody
or disposition of any Collateral or any appraisal, valuation, stay,           extension,
moratorium or redemption law), or take or omit to take any other           action, that
could reasonably be expected to have the effect of delaying,           impeding or
preventing the exercise of any rights and remedies in respect of the
          Collateral, the absolute sale of any of the Collateral or the possession
thereof           by any purchaser at any sale thereof, and waives the benefit of all
such laws           and further agrees that it will not hinder, delay or impede the
execution of any           power granted hereunder to any Security Bank, but that it will
permit the           execution of every such power as though no such laws were in effect,
          (ii) waives all rights that it has or may have under any rule of law or
          statute now existing or hereafter adopted to require either or both of the
          Security Banks to marshal any Collateral or other assets in favor of the
          Borrower or any other person or entity or against or in payment of any or all
of           the Secured Obligations and (iii) waives all rights that it has or may
have           under any rule of law or statute now existing or hereafter adopted to
demand,           presentment, protest, advertisement or notice of any kind.

11.        Miscellaneous.

| | 11.1.        Captions.
Section captions used in this Agreement are for convenience           only and shall not
affect the construction of this Agreement.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.2.        Governing
Law; Severability. THIS AGREEMENT SHALL BE DEEMED TO BE A           CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK           (INCLUDING FOR
SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL           OBLIGATIONS LAW OF THE
STATE OF NEW YORK). Any provision in this Agreement           that is held to be
inoperative, unenforceable, or invalid in any jurisdiction           shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid           without affecting the
remaining provisions in that jurisdiction or the           operation, enforceability, or
validity of that provision in any other           jurisdiction.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 11.3.        Counterparts.
This Agreement may be executed in any number of           counterparts, and by the
parties hereto on the same or separate counterparts,           and each such counterpart,
when executed and delivered, shall be deemed to be an           original, but all such
counterparts shall together constitute but one and the           same Agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.4.        Successors
and Assigns. This Agreement shall be binding upon the parties           hereto and
their successors and assigns, and shall inure to the sole benefit of           the
parties hereto and the respective successors and assigns of the Banks.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.5.        Amendments,
etc. No amendment to or waiver of any provision of this           Agreement nor
consent to any departure by the Borrower herefrom shall in any           event be
effective unless the same shall be in writing and signed by the           Security Banks,
the Collateral Trustee and the Borrower, and then such waiver or           consent shall
be effective only in the specific instance and for the specific           purpose for
which it is given.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.6.        Addresses
for Notices. Any notices to be given hereunder shall be served           on a party
by prepaid express registered letter (or nearest equivalent) to its           address
given below or such other address as may from time to time be notified           for this
purpose.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                               |                                                 
| | ----------------------------- | ------------------------------------------------
|
|
|
|
| | to the Borrower at:           | Tower Semiconductor Ltd.                        
| |                               | P.O. Box 619                                    
| |                               | Migdal Haemek, Israel                           
| |                               | Facsimile: (04) 604 7242                        
| |                               | Attention: Oren Shirazi                         
| |                              
| | with a copy to:               | Yigal Arnon & Co.                               
| |                               | 1 Azrieli Center, 46th Floor, The Round Tower   
| |                               | Tel-Aviv, Israel 67021                          
| |                               | Facsimile: (03) 608 7714                        
| |                               | Attention: David H. Schapiro, Adv.              
| |                              
| | to Bank Hapoalim at:          | Bank Hapoalim B.M.                              
| |                               | Corporate Division                              
| |                               | Migdal Levenstein                               
| |                               | 23 Menachem Begin Road                          
| |                               | Tel-Aviv, Israel                                
| |                               | Facsimile: (03) 567 2995                        
| |                               | Attention: Head of Corporate Division           
| |                              
| | To Bank Leumi le-Israel at:   | Bank Leumi le-Israel B.M.                       
| |                               | Corporate Division                              
| |                               | 34 Yehuda Halevi Street                         
| |                               | Tel-Aviv, Israel                                
| |                               | Facsimile: (03) 514 9278                        
| |                               | Attention: Manager of Hi-Tech Industries Section
| |                              
| | to the Collateral Trustee at: | Bank Hapoalim, New York Branch                  
| |                               | Avenue of the America 1177                      
| |                               | New York 10036                                  
| |                               | Tel.: (212) 782-2000                            
| |                               | Facsimile: (212) 782-2222                       



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Any notice to be given to a Security
Bank or the Collateral Trustee or by a Security Bank or the Collateral Trustee must be
given during the normal banking hours of such Security Bank or Collateral Trustee to the
person and at the address or facsimile number (as applicable) stated above (or such other
address or facsimile number as may from time to time be specified by such Security Bank or
Collateral Trustee). If notice is sent by facsimile during normal business hours as
aforesaid, it shall be deemed to have been sent when confirmation of receipt by the
intended recipient has been received. All notices given by facsimile shall be confirmed by
letter dispatched in the manner provided for above within 24 hours of transmission. Any
notice given by prepaid express registered letter (or nearest equivalent) so sent shall be
deemed to have been sent within five days after the time at which such notice was sent,
and, in proving such service, it shall be sufficient to prove that the noticed was
properly addressed and posted.

| | 11.7.        Cumulative
Remedies. No remedy herein is intended to be exclusive of any           other remedy,
but every such remedy shall be cumulative and shall be in addition           to every
other remedy herein conferred or now or hereafter existing at law or in           equity
or by statute. No delay or omission of any Security Bank to exercise any           right
or remedy arising hereunder shall impair any right or remedy or shall be
          construed to be a waiver of the Secured Obligations or an acquiescence in the
          failure or omission to pay or perform the Secured Obligations; and every right
          and remedy given by this Agreement to the Security Banks may be exercised from
          time to time and as often as may be deemed expedient by any Security Bank.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.8.        Care
of Collateral. Beyond the exercise of reasonable care to assure the           safe
custody of the Collateral in the physical possession of the Security Banks           or
the Collateral Trustee pursuant hereto, neither any Security Bank nor the
          Collateral Trustee shall have any duty or liability to collect any sums due in
          respect thereof or to ascertain or take action with respect to calls,
          conversions, exchanges, maturities, tenders or other matters relative to the
          Collateral, whether or not such Security Bank or Collateral Trustee (as
          applicable) has or is deemed to have knowledge of such matters, or to protect,
          preserve or exercise any rights pertaining to the Collateral, and shall be
          relieved of all responsibility for the Collateral upon surrendering it to the
          Borrower. Each of the Security Banks and the Collateral Trustee shall be deemed
          to have exercised reasonable care in the custody and preservation of the
          Collateral if it takes such action for that purpose as the Borrower shall
          request in writing, but the failure of such Security Bank or the Collateral
          Trustee (as applicable) to comply with any such request shall not of itself be
          deemed a failure to exercise reasonable care, and no failure of any Security
          Bank or the Collateral Trustee to preserve or protect any rights with respect
to           the Collateral against prior parties, or to do any act with respect to
          preservation of the Collateral not so requested by the Borrower, shall be
deemed           a failure to exercise reasonable care in the custody or preservation of
any           Collateral.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.9        CONSENT
TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN, CITY OF NEW YORK, STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE SECURITY BANKS TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST ANY SECURITY BANK OR THE COLLATERAL TRUSTEE OR ANY
AFFILIATE OF ANY OF THEM INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN
THE BOROUGH OF MANHATTAN, CITY OF NEW YORK, STATE OF NEW YORK.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | 11.10        WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.11        Survival.
All representations, warranties, covenants and agreements herein shall survive the
execution and delivery of this Agreement and any amendment, restated, supplement,
modification or accession hereto.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.12        Non-U.S.
Security Documents. Without limiting any of the rights, remedies, privileges or
benefits provided hereunder to the Security Banks for their respective benefit and the
ratable benefit of the Banks, notwithstanding anything to the contrary contained herein,
the Borrower and the Security Banks hereby agree that the terms and provisions of this
Agreement in respect of any Collateral subject to the pledge or other Lien granted under
a pledge or security agreement (or other substantially similar agreement) in respect of
the Collateral that is stated therein to be governed by the laws of a jurisdiction other
than United States or any state thereof, including, without limitation, the Debenture
(collectively, the Non-U.S. Security Documents) are, and shall be
deemed to be, supplemental and in addition to the rights, remedies, privileges and
benefits provided to the Security Banks and the Banks under such Non-U.S. Security
Documents and under applicable law to the extent consistent with applicable law; provided,
that, in the event that the terms of this Pledge Agreement conflict or are inconsistent
with the applicable Non-U.S. Security Documents or applicable law governing such Non-U.S.
Security Documents, (i) to the extent that the provisions of such Non-U.S. Security
Documents or applicable foreign law are, under applicable foreign law, necessary for the
creation, perfection or priority of the security interests in the Collateral subject to
such Non-U.S. Security Documents, the terms of such Non-U.S. Security Documents or such
applicable law shall be controlling and (ii) otherwise, the terms hereof shall be
controlling.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11.13        Release.
On the date on which the Banks are satisfied that: (i) no Bank is under any
commitment, obligation or liability (whether actual or contingent) under the Finance
Documents or the Fab 1 Finance Documents and (ii) all the Secured Obligations
have been irrevocably paid and discharged in full, the security interest granted hereby
shall terminate and all rights to the Collateral shall revert to the Borrower. Upon any
such termination, the Security Banks or the Collateral Trustee, on behalf of the Security
Banks, will, at the Borrowers expense, execute and deliver to the Borrower such
documents as the Borrower shall reasonably request to evidence such termination.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[Remainder of page intentionally left blank]



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IN
WITNESS WHEREOF, the Borrower, the Security Banks and the Collateral Trustee have executed
this Agreement as of the date first above written.

| |  | TOWER SEMICONDUCTOR LTD.By: 
Name:
Title:
| |  | -----------------------------------------------------------------------------------

| |  | BANK HAPOALIM B.M.By: 
Name:
Title:
| |  | -----------------------------------------------------------------------------

| |  | BANK LEUMI LE-ISRAEL B.M.By: 
Name:
Title:
| |  | ------------------------------------------------------------------------------------

| |  | BANK HAPOALIM, NEW YORK BRANCHBy: 
Name:
Title:
| |  | -----------------------------------------------------------------------------------------

# [Pledge Agreement
Signature Page]



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# SCHEDULE I

# STOCK

|Issuer                                                  | Class of Security
and Certificate
Number | Number of Shares
Pledged | Pledged Shares as %
of Total Issued and
Outstanding
Securities
|------------------------------------------------------- | ---------------------------------------- | ------------------------ | --------------------------------------------------------------
|
|
|
|
|Jazz Technologies, Inc.                                 | Common Stock                             | 100                      | 100%                                                          
|(as successor by merger to Armstrong Acquisition Corp.) | Certificate No. CS-1                     |                          |                                                               



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SCHEDULE II

JURISDICTION OF ORGANIZATION/
LOCATION OF CHIEF EXECUTIVE OFFICE

|                              |                              
|----------------------------- | -----------------------------
|
|
|
|
|Jurisdiction of organization: | Israel                       
|                             
|Chief executive office:       | Ramat Gavriel Industrial Park
|                              | P.O. Box 619                 
|                              | Migdal Haemek                
|                              | Israel 23105                 



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# SCHEDULE III

# UCC-1 FINANCING
STATEMENT

(attached).



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