Southwall Europe GmbH Quality Management System Certified For DIN EN ISO 9001:2000

    PALO ALTO, Calif.--Jan. 24, 2002--Southwall Technologies Inc. announced today that its new manufacturing plant's Quality Management System has passed the Certification Audit in compliance with the International Standard DIN EN ISO 9001:2000. The formal Certificate acknowledging this accomplishment is expected by the end of this month. Southwall Europe GmbH's (SEG) plant was commissioned in July of 2000 and currently has two production machines shipping product to automotive glass laminators in Europe. Southwall's press release, dated January 16, 2002, stated that it has entered into a contract to purchase the third production machine for this facility.
    "This quality audit and the certification that follows are especially rewarding for our SEG management team," explained Wolfgang Heinze, Vice President and General Manager for Southwall Europe GmbH. "It recognizes our successful effort to develop and implement our Quality Management System concurrent with the installation, approval and startup of the first two production machines in the second half of 2000 and 2001.
    "I couldn't be more pleased with the way the team met this challenge during a period of great pressure to also meet our production goals. The ever-growing customer demand for the highest level of quality is the engine for continuous improvement of our Quality Management System," added Heinze.
    The new DIN EN ISO 9000:2000 is comprised of three basic documents -- ISO 9000, ISO 9001, and ISO 9004 -- which were approved by a 90% vote in November, 2000. At that time, the 176 committee member countries voted in favor of adopting the Final Draft International Standard (FDIS). The old ISO 9000:1994 standards had 20 elements, which have been folded into the new structure with four main sections:

    --  Management responsibility
    --  Resource Management
    --  Product and/or service realization
    --  Measurement, analysis and improvement.

    "These four sections define a Process Model that emphasizes a continuous improvement process popularized by W. Edwards Deming in the 1980s," said Dr. Heidrun Krautz, Director of Quality at SEG. "Continual Improvement and a heightened emphasis on Customer Satisfaction are the two fundamental themes carried forward in this relatively new set of Quality Standards. We plan to use this system to further improve our process for installing PM 10, our third sputtering machine, which is expected to begin commercial production in early 2003. It is a great way to focus on what's important during times of intense change," she added.
    TUV Rheinland Berlin Brandenburg has been selected as SEG's partner in this auditing and certification process. TUV is an independent Certification organization providing Quality auditing services to clients like Harley Davidson and Freightliner.

    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, and Mitsubishi Electric.

    About TUV Rheinland Berlin Bradenburg

    TUV (www.tuv.com) has 80 subsidiaries in 40 countries with 7,500 employees worldwide providing comprehensive services from one source. With 125 years of experience, the five fields of Industrial Services, Mobility & Transport, Product Safety and Quality, Education and Services, and New Business Development bring in annual revenues of 700 million Euros.
    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 Southwall's expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements in this press release are based on information available to Southwall on the date hereof, and Southwall 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 that customer demand for Southwall's products will not grow or will decline or that Southwall will experience manufacturing or quality problems in the future despite being ISO 9001 compliant, as well as, that PM10 will not be fabricated, installed, and/or commissioned on the expected schedule. Further risks are detailed in Southwall's filings with the Securities and Exchange Commission, including those set forth in Southwall's most recent Form 10-K and Form 10-Q.