Southwall Announces $1 Million Investment

    PALO ALTO, Calif.--April 25, 2001--Southwall Technologies Inc. announced today an initial investment in the form of a purchase of 422,119 shares of Southwall's common stock by GMX Associates Pte Ltd. GMX is a privately held company based in Singapore with several subsidiaries, including joint ventures with overseas companies as well as a Singapore Government investment entity. The purchase price per share was based on a 15% premium over a trailing stock price average.
    GMX, a Southwall customer since 1993, holds the exclusive worldwide rights to promote and sell solar control window film products based on Southwall's patented XIR(R) coatings as well as patented ceramic QX(TM) coatings co-owned by Southwall and GMX. These window film products are sold under the trademarks V-KOOL(R) and Huper Optik(R) in 22 countries. GMX maintains a distribution and franchise/dealer network with principal business locations in key geographic areas such as: Asia Pacific, Middle East, Europe and the United States.
    "This is an important vote of confidence from a strategic customer and partner for the future of Southwall. GMX has been highly successful at marketing and distributing our XIR(R) window films," said Thomas G. Hood, Southwall's President and CEO. "We have been impressed since the mid `90's when GMX first brought our products to the South East Asian markets and created a new, high-end market segment based on our XIR(R) technology. They have been able, through high quality marketing and promotional programs combined with exclusive distribution and dealership strategies, to introduce and establish Southwall's window films as the products of choice in several key markets. Furthermore, Southwall and GMX have formed a business and technical partnership, in conjunction with national laboratories in Singapore, to ensure ongoing technical developments that we believe will help sustain our product leadership in the future. This synergistic partnership has already delivered several patent-pending inventions including a proprietary series of product offerings which have been successfully introduced into the domestic and international markets in the past year under the Huper Optik(R) brand. Although Southwall has been unable in the past to meet GMX's rapidly growing demand for these products, our new production capacity in Arizona and Germany will begin to allow Southwall to meet their requirements in 2001. Their desire to invest in Southwall is an important financial event, as well as an important symbolic gesture in strengthening this very successful relationship," added Hood.
    Andrew Kwan, director of GMX, said, "We are very pleased to be able to make this investment in Southwall at this time. We are firm believers in the unparalleled performance and quality of Southwall's products and are very keen to invest in a technology and a company that has received many international and domestic accolades, including one of the `Top 100 Inventions of the Millennium Award.' Today's rapidly escalating energy crisis in California is a perfect example of why V-KOOL(R) and Huper Optik(R) window films which are representative of the energy savings products of the future, are now the order of the day! We will continue to work closely with Southwall in the future to ensure a continuity and quantity of supply adequate to meet our rapidly growing demand. This includes making additional, substantive investments in Southwall if it makes sense for both Companies."

    About Southwall Technologies Inc.

    Southwall Technologies (www.southwall.com) designs and produces technologically advanced thin film coatings that selectively absorb, reflect or transmit electromagnetic radiation. Southwall products are used in a number of architectural, automotive and electronic products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs. Southwall exports advanced thin film coatings to over 25 countries around the world for use in products manufactured by such companies as Audi, BMW, DaimlerChrysler, Renault, Peugeot-Citroen, Volvo, Saint-Gobain Sekurit, Pilkington, Mitsubishi Electric, and Samsung.

    This press release may contain forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995), including, without limitation, statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presented. These risks include the possibility that shipments to customers will be materially less than anticipated, that GMX will make no additional investments in the Company, that the schedule for the commencement of production on new machines will be materially longer than described above, that yields and throughputs will not be improved and production targets may not be met, or that the customers discussed above will continue to purchase product from the Company, as well as risks associated with its failure to meet covenants under credit facilities and strains on the Company's liquidity. Further risks are detailed in the Company's filing with the Securities and Exchange Commission, including those set forth in the Company's most recent Form 10K.