Southwall Technologies Appoints New Chairman of the Board

PALO ALTO, Calif.--Dec. 29, 2003--Southwall Technologies Inc. , a global developer, manufacturer and marketer of thin-film coatings for the electronic display, automotive glass and architectural markets, today announced that on Dec. 1, 20039, 2003, the Southwall board of directors appointed George Boyadjieff as its new chairman. The appointment was a condition of the recently announced bank guarantee and equity financing package led by Needham & Company, Inc.

Boyadjieff succeeds Joseph P. Reagan, who will continue as a Southwall director. As the chairman emeritus and recently retired chief executive officer of Varco International, Inc. , Boyadjieff led the diversified oilfield equipment manufacturer and service provider to over $1.3 billion in fiscal 2002 revenues. After joining Varco in 1969, he served as CEO from 1991 through 2002 and chairman of the board from 1998 to 2003.

"I'm very pleased to have the opportunity to help guide Southwall in restructuring the business," said Boyadjieff. "We have a solid management team in place and exciting potential growth opportunities in front of us, particularly in the flat panel display market."

"George brings a wealth of business experience and knowledge to Southwall," commented Thomas G. Hood, president and chief executive officer. "We are fortunate to have someone with George's background on board and are looking forward to his contributions as our business gains momentum during 2004."

About Southwall Technologies Inc.

Southwall Technologies Inc., designs and produces thin film coatings that selectively absorb, reflect or transmit light. Southwall products are used in a number of automotive, electronic display and architectural glass products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs. Southwall is an ISO 9001:2000-certified manufacturer and exports advanced thin film coatings to over 25 countries around the world. Southwall's customers include Audi, BMW, DaimlerChrysler, Hewlett-Packard, Mitsubishi Electric, Mitsui Chemicals, Peugeot-Citroen, Pilkington, Renault, Saint-Gobain SEKURIT, and Volvo.

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. Further risks are detailed in the company's filings with the Securities and Exchange Commission, including those set forth in the company's most recent Annual Report on Form 10-K for the year ended December 31, 2002, filed on March 31, 2003; its Quarterly Report on Form 10-Q for the quarter ended September 28, 2003, filed on November 17, 2003, as amended by its Quarterly Report Form 10-Q/A, filed on November 19, 2003; its Current Reports on Form 8-K, filed on December 9, 2003, December 16, 2003, and December 23, 2003, respectively.